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We often take it for granted when new products appear in advertising or on the shelves of our local store. But they must come from somewhere; did elves make them? Who knows? However, whoever made these new products must have followed a process called new product development or NPDP; in this content, I will answer the question, what exactly is new product development? Before, I will tell you what new product development is. I must address a simple question: why do we need to know about new product development?
Whoever is reading this article is the project manager. You will sometimes be called upon as a project manager to manage a new product development project.
What Is NPDP
It’s one of the main areas of project management in certain types of organizations. Therefore, if you want a rounded project management education, you need to know just a little bit about it, and of course, in the end, you need to become an expert in NPDP.
I will give you a broad outline to understand whether it’s a field you want to pursue further. By the way, the relationship between project management and new product development is an important one. We often think of scrum as an agile project management methodology, but the origins of scrum are in new product development.
Why NPDP is Important:
New product development is a process that takes a product or a service from a broad idea or concept to delivery to the market and is on sale and available. An NPDP needs to follow a strict process that is well documented, and it needs to do. So, for two reasons. Firstly, following a robust process is more efficient; we aren’t likely to miss out on steps, make mistakes, or repeat ourselves. A complete process means we can get our new product to market more quickly, less expensively, and with fewer risks. And the second reason for a rigorous and well-documented process is accountability. New products carry a lot of trouble for organizations, but they also have hope for the future. These new products will enable the organization to continue competing against its market competitors and hopefully thrive. But if we get it wrong, we’re throwing a lot of money, a lot of reputation, and a lot of potentials down the drain. New product development failings often set companies back a long way and sometimes kill them. And therefore, we need to do it properly.
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What Does NPDP look like?
There are many new product development processes. Each large organization will have its custom process, which is tailored partly to the kind of products. These custom processes partially breed from the organization’s culture and partly in the historical context of the process. However, there are many common characteristics of these new product development processes. And therefore, the outline process I will give you should reconcile well with the techniques you’ll encounter in the organizations you work with.
Steps of NPDP development:
To capture the key features, we need seven steps.
Step one is that the organization needs a new product strategy. It requires a series of goals and an idea of the direction the organization wants to move in, and therefore it needs to create a portfolio of new product ideas. And opportunities from which it can draw down the product ideas it wishes to pursue.
Second, we need a concept creation step. This is the process by which the organization generates new ideas for new products. It may do so by observing the market, copying its competitors, or listening to the voice of the customer. The components of this step are creating new ideas, screening them for viability, desirability, and profitability, and crafting those ideas into a rigorous concept that we can take forward to a good business case.
The Third step is Design, we need to develop a design for this new product, and often Design is a critical differentiator between our products and our competitor’s products sometimes because we have a distinct design ethic of our own. Sometimes because we choose to make design choices that are different from those available in the marketplace, Design is all about how people interact with and experience products and services. And therefore, it links directly to the value proposition that your new product will offer the market.
Step four is the inevitable business analysis. We must look at the investment opportunity and appraise it against other ways of spending our money. We must look at how much we will need to invest, how much return (ROI) we’ll likely get, and the risks involved. Business analysis within new product development is as rigorous as the business case process or the investment appraisal process in other areas of project management. If we decide that the new product idea has a solid commercial future, it exposes the organization to no more than an acceptable level of risk, and then we’re likely to proceed to step five.
Step five is Development. This is where the engineers develop solutions that enable the product to work. We’re problem-solving; we’re creating pilots and prototypes of things we can test out with samples from the market. These samples will depend heavily on the type of product it is. If it’s an electronic device, it will be very different from a financial services product. At this point, it’s worth drawing your attention to the broad similarity between this process and design thinking, which is in one way. An alternative new product development process. But one way it differs is that the new product development process is a whole life process for the new product. And therefore, after the Development, we need to think about marketing the product.
Step Six is Market Strategy. Product managers overseeing the whole new product development process will now focus on how we will take this product to market and enthuse potential customers and buyers with excitement about what this product is and what it can do for them. Early-stage marketing involves market testing using prototypes. In the software industry, beta editions are utilized to test out with potential users to get good-quality feedback and build a buzz around the forthcoming product. From this, the new product team will develop a strategy usually based on traditional marketing, four P’s: product, place, price, and promotion.
Finally, step seven is commercialization, we need to take this product to market, and we need to sell it, and we don’t only need to sell it; we need to support it with customer service and long-term customer support. This means we must find a way for the product to generate a sustainable and profitable cash flow for the organization. As a result, we need pricing plans, sales plans, and briefings for the salespeople. We need launch promotions ready and the back office, the support team, and maintenance teams adequately briefed and prepared to provide the support that customers expect for the new product or service.
Fuzzy Front End and Fuzzy Back End:
Finally, before we finish looking at new product development, if you come from an engineering background, you may have come across the terms fuzzy front end and fuzzy back end. These terms originate with engineers’ discomfort with the process’s less rigorous early and end stages. Engineers are often very comfortable with new product development’s design, Development, and testing stages. But the fuzzy front end is about getting ideas and determining which ones will be commercial, which needs more scientific. The fuzzy back end is all around marketing and commercialization, which, again, engineers feel less comfortable with. So, you’ll hear the terms fuzzy front end and fuzzy back end from engineers as quasi-derogatory terms for the early and end stages of new product development. But, we do need new product development. We need new product development to meet customer demands, address new market opportunities, stay ahead of the market, and even sometimes create whole new product categories. And very often, new product development needs project managers. And if this sounds interesting, then the project management role is for you.