New Product Development (NPD) | Its Steps and Tips and Tricks

Definepedia avatar
The process of launching a new product onto the market can be challenging. However, it is a profitable journey for businesses. The NPD process is divided into stages and needs careful planning, performance, and control. So basically in this post, we will define New Product development, and describe the common processes involved in the NPD process.

{tocify} {$title=Table of Contents}


“A new product’s likelihood of success can be determined before its development by answering three questions: (1) Do people need the product? (2) Is it different and better than competitors’ offerings? (3) Would people be willing to pay the proposed price? (Kotler, 2003)”

New Product Development (NPD) | Its Steps and Advantages


Process of New Product Development

Step 1: Idea Generation

This stage is important because it is the foundation for the whole process. And can make or break the success of the product. Basically, Ideas can come from various sources. Such as customer feedback, market trends, and by brainstorming sessions. So in it, you have to use creativity to identify the possible product that has the potential to solve a customer’s need and also create huge profit for the company.

Step 2: Product Definition

Next is to define the product. This stage involves a deeper dip into the product concept to determine its usefulness, market fit, and technical requirements. So the product definition stage is essential as it helps to better the product concept and ensure that it is viable. This stage may also involve creating a business plan, researching the market, and conducting a competitive analysis.

Step 3: Crafting

The next step is to Crafting. This stage involves creating a physical or virtual model of the product. For testing its functionality and design. So we can say that it helps to validate the product concept and identify any potential issues that need to be fixed. And it can also be used to collect feedback from possible customers, which can be used to make other improvements to the product.

Step 4: Detailed Design

The next step is to create a detailed design of the product. This stage involves purifying the product design. To ensure that it meets all of the requirements and it can be manufactured efficiently. This includes finalizing the product specifications and creating drawings and documentation.

Step 5: Validation/Testing

This stage involves testing the product to ensure that it meets all of the performance, safety, and regulatory requirements. It may also involve conducting market research to determine the product’s market potential and customer demand so that it is a crucial part of the whole process.

Step 6: Commercialization

This stage includes developing a marketing and sales strategy, creating distribution channels, and establishing a brand for the product. So this stage’s objectives are to get the product to market and create income.

Who involves in the development of new products?

A cross-functional team of individuals from many departments is involve in the NPD process. Individuals from research and development (R&D), engineering, marketing, sales, and operations may also be include. The team collaborates to deliver the product from concept to market. And each individual brings to the table distinct skills and expertise.

Booz, Allen & Hamilton’s Different types of New Products

Booz, Allen & Hamilton gives the different types of new products and the importance of consumer perception in product success.

New-to-the-World Products

These are products that create an entirely new market. These products can be truly innovative and change the way people live. So here is an example of this type of product is the first smartphone, which created a new market for mobile computing and communication.

New-Product Lines

A new product line is a company’s entry into an establish market with a product that has not been seen before. These products can be a great way for companies to expand into new markets and reach new customers. For example, a company that mostly sells beauty products might launch a new line of organic skincare products.

Additions to Existing Product Lines

These are new products that supplement a company’s established product lines. They may be like existing products but offer new features, colors, or sizes. For example, a company that sells running shoes might release a new colorway for one of its popular models.

Improvements in / Revisions to Existing Products

Improvements in existing products provide better performance or greater sensed value than the original product. These revisions can also replace existing products in the market. For example, a company might release a new and improved version of its popular laptop, with faster processing and longer battery life.


Repositioning involves modifying existing products or brands to appeal to different market segments or widen their request. This can be a great way for companies to reach new customers and keep their existing product lines fresh and relevant. For example, a company that sells athletic wear might reposition its products to appeal to a more environmentally conscious consumer base.

Cost Reductions

These new products offer similar performance at a lower cost, making them an attractive option for cost-conscious consumers. For example, a company might release a new line of budget laptops that still offer good performance but are more affordable than their premium products.

Best Practices for Establishing an Effective New Product Development Organization

Companies must constantly bring new items to market for stay ahead in the competition. For that, they must create an efficient new product development organisation. That is capable of producing high-quality products on time.

Here are some best practices that businesses should follow to build a successful new product development organisation:

Define the Roles and Responsibilities

A clear understanding of the roles and responsibilities of each team member is essential for the success of any new product development project. This includes:

  • Product Manager,
  • The design team,
  • The engineering team,
  • And any other team members involved in the project.

Each team member should have a clear understanding of their role.

Clear Communication

Communication is essential for the success of any new product development effort. Members of the team should meet on a regular basis to discuss progress. And also to identify any obstacles, and ensure that everyone is working towards the same goal. To ensure that all communication is record. And it is available to all team members, and a project management system should be created.

Project Management System

In the new product development process, a project management system is an important tool for tracking progress and identifying problems. It is real-time project status updates, which allocates the tasks, and manage deadlines. All team members should have access to the project management system. So that they can easily keeps informed and give updates as needed.

Continuous Needed Change

The new product development process is not a onetime event. It is an ongoing process that requires continuous changes and adjustments. So regular evaluations should be conducted to determine the effectiveness of the process and to identify areas for improvement. Based on these evaluations, the process should be adjusted to ensure it continues to meet the needs of the company and its customers.

Culture of Innovation

An inventive culture is required for a successful NPD business. So companies should encourage their staff to think out of the box in order to generate innovative and creative ideas. So by giving them opportunities for team members to attend industry events, among other things.

Leave a Reply

Your email address will not be published. Required fields are marked *