New Product Development Process and Strategies
Introduction
The design of new products is crucial to the survival of most companies. In rapidly changing industries, the introduction of new products is a way of life. Product design is rarely the sole responsibility of operations; however, it is highly affected by the introduction of new products and vice versa. Operations is the “receiver” of new product introductions. Decisions about the product affect each area of operational decision-making. The product is the result of the development of corporate strategy. Product design is a prerequisite for production, as is forecast volume.
Theoretical Framework
1.1 Concept of a Product
You can define a product from a psychosocial aspect, where the person is improving their image, status, exclusivity, and vanity.
1.2 Elements Characterizing Product Customization
The personality of the product is the ability to give everyone what they want. The elements that characterize it are:
- Design: This is what makes it appealing to consumers.
- Assortment: This has to do with marketing. For each market segment, a specific product should be developed, mainly focusing on the consumer’s purchasing power.
- Quality: This characteristic involves changing the product design.
1.3 Factors of Success and Failure of a Product
- Lowest Cost of Production: This induces us to have a better market price.
- Uniqueness of the Product: It must be new and not an imitation.
- Complexity of Making the Product: This can be a factor in both success and failure.
- Flexibility of the Production Process: This allows us to make an assortment of products.
1.4 Life Cycle of a Product
This is a concept developed and discussed extensively by Theodore Levitt, George Schwartz, Stanley Shapiro, and other marketing legends. The theory suggests that every product or service has a finite life. If one monitors sales during a given period, they will discover that the pattern of sales of most products is a curve consisting of growth, maturity, and decline.
Strategies for the Introduction of New Products
There are three basic ways to approach the process of introducing new products: It can be considered as market momentum, a technology push, or an inter-functional nature.
2.1 Market Momentum
According to this approach, “one should make what can be sold.” In this case, new products are determined by the market, giving little consideration to existing technology and operations processes.
2.2 Technology Push
This approach suggests that “you must sell what you can do.” Accordingly, new products must be derived from production technology, with little regard to the market.
2.3 Inter-Functional
With this approach, the introduction of new products has an inter-functional nature and requires cooperation between marketing, operations, engineering, and other functions. The process of developing new products does not receive momentum from the market nor technology but is determined by a coordinated effort between functions.
Process for New Product Development
3.1 Idea Generation
Ideas can be generated from the market or technology. Ideas from the market are the result of consumer needs.
3.1.1 Techniques for Idea Generation
- Attribute Value: This technique requires listing the main attributes of an existing product and then modifying each of them in pursuit of an improved product.
- Forced Relationships: Here, several objects are considered in relation to the rest.
- Morphological Analysis: This method seeks to identify the structural dimensions of a problem and, by examining the relationships between them, hopes to find a novel combination.
- Identifying Needs and Problems: The above creative techniques do not require the consumer to generate ideas. Consumers receive a list of problems and say which ones come to mind when mentioning these problems.
- Brainstorming: The problem must be specific and common to the group, as this technique consists of six to ten people encouraging creativity through group brainstorming. The ideas start flowing; one idea follows another in an hour, and you’ll probably save a hundred or more ideas. It identifies four principles for a discussion to reach maximum efficiency: No criticism allowed, spontaneity is welcome, encourage quantity, and encourage the combination and improvement of ideas.
3.2 Product Selection
Not all new ideas must be developed to convert them into new products. Ideas for new products must undergo at least three tests: 1) market potential, 2) financial feasibility, and 3) operations support.
3.3 Preliminary Product Design
This stage of the product design process is related to developing the best design for the new product idea. When approving a preliminary design, you can build a prototype or prototypes for additional testing and analysis. The preliminary design takes into account a large number of tradeoffs between cost, quality, and product performance. The result should be a product design that is competitive in the market and transactions that may occur. The design goals are, of course, difficult to satisfy. As a result of product selection, only the skeleton is defined. The preliminary design of the product completely identifies the product. During the preliminary design, all compensation decisions should be based on the design goal: a radio with a price whose performance is superior.
3.4 Prototype Construction
The construction of the prototype can take several different forms. First, it can produce by hand several prototypes that resemble the final product. Once the prototype has been tested successfully, you can complete the final design, provide the service free of duty, and develop it on a large scale.
3.5 Tests
Tests on prototypes aim to check the technical and commercial performance. The purpose of a market test is to obtain quantitative information on the product’s acceptance among consumers. Also, test the technical performance of the product prototypes. Engineering changes initiated as a result of tests on prototypes are then incorporated into the final design package.
3.6 Final Product Design
During the final design phase, drawings and specifications for this product are developed. As a result of tests on the prototype, certain changes can be incorporated into the final design. When changes are made, the product may undergo additional testing to ensure final product performance. Attention is then focused on completing design specifications so that production can proceed.
Study of the Process of Development of New Products
Initially, a large number of ideas are generated, but few are successfully introduced to the market as products.
4.1 Filtering Ideas
By filtering ideas, the company should avoid two types of errors. An error of exclusion occurs when the company eliminates a good idea. The easiest way to do this is to eliminate the ideas of others. If a company makes too many errors of exclusion, its rules are very conservative.
4.2 Development and Proof of Concept
An attractive idea must be developed and converted into a product concept. It is important to distinguish between the idea, concept, and image of a product. The product idea is the suggestion of a possible product to offer the market. The product concept is a detailed version of the idea expressed in meaningful consumer terms. The product image is how consumers perceive an actual or potential product. The proof of concept involves subjecting the concepts of new products to target consumer groups. The concepts can be presented simply.
4.3 Business Analysis
This implies a revision of sales, costs, and profit projections for a new product to ascertain whether they meet the company’s objectives. If the product can do so, it can advance to the product development stage.
4.4 Product Development
After research and development have been done, the product concept is turned into a finished product or a physical product. Prototypes must undergo several tests to observe the product’s behavior safely and effectively. Developing a product requires great risk and investment; this will reveal whether the product idea can become a viable product.
4.5 Test Market
At this stage, the product and marketing program are introduced in more realistic scenarios. This allows the company to test the product and its entire marketing program in reality, including its positioning strategy, advertising, distribution, pricing, branding, and packaging, as well as budget levels.
4.6 Marketing
Commercialization is the introduction of a new product to the market. The company must decide on the appropriate time, whether to be a pioneer or a follower. The second should focus on the area where the product is launching: local, regional, district, national, or international.