NEW PRODUCT DEVOLOPEMENT:New product development (NPD) is the process of bringing a new product to the marketplace.

Your business may need to engage in this process due to changes in consumer preferences, increasing competition and advances in technology. Innovative businesses thrive by understanding what their market wants, making smart product improvements, and developing new products that meet and exceed their customers' expectations. 'New products' can be: products that your business has never made or sold before but have been taken to market by others product innovations created and brought to the market for the first time. They may be completely original products, or existing products that you have modified and improved. NPD is not limited to existing businesses. New businesses, sole traders or even freelancers can forge a place in the market by researching, developing and introducing new or even one-off products. Similarly, you don't need to be an inventor to master NPD. You can also consider purchasing new products through licensing or copyright acquisition. This guide explains the importance of NPD and describes the steps involved. Carefully plan the steps involved in testing your new product development (NPD) ideas. For every 7 new product ideas developed, 1 becomes successful. Defining your new product concept and testing it with your market will help you determine whether your new product idea will be a success. The concept development and testing stage of NPD can be time-intensive, but it will help you avoid unnecessary costs later by ensuring you pursue the best new product concept in your market.

Create a product concept
A product concept is a detailed description of an idea, which you describe from the perspective of your customer. Taking your customers' viewpoint when describing your product concept will help you test and evaluate how responsive your market will be to your product.

Do your sums carefully
Make sure your idea can be designed, manufactured and delivered within your financial, resource and time constraints?

Talk to the people who will buy it
Take your idea to your target audience to determine what they think and where any gaps might lie. Market researchers can help you run focus groups and surveys to determine how customers will respond to your product.

Refine your target market
Detail your customer targets as accurately as you can. Your focus groups or conversations with your target audiences will help you determine whether you're targeting the right market segments.

Examine intellectual property (IP) issues
Find out whether another business or individual has already patented your idea. If your idea was the combined result of several members of your team, consider how you will recognise their contributions to the intellectual property.

Identify the features
Based on the information you have gathered to date, list the features and benefits of your proposed product from highest market importance to least.

Take your time
Define your product concept clearly, test it with your audience and don´t make any assumptions. Many NPD ventures fail because businesses rush through concept development and testing.

Developing New Products
By its nature marketing requires new ideas. Unlike some organizational functions, where basic processes follow a fairly consistent routine (e.g., accounting), successful marketers are constantly making adjustments to their marketing efforts. New ideas are essential for responding to changing demand by the target market and by pressure exerted by competitors. These changes are manifested in decisions in all marketing areas including the development of new products. In addition to being responsive to changing customer tastes and competitive forces, there are many other reasons why new product development is vital. These include:

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Many new products earn higher profits than older products. This is often the case for products considered innovative or unique which, for a period of time, may enjoy success and initially face little or no competition. New products can help reposition the company in customer’s minds. For instance, a company that traditionally sold low priced products with few features may shift customers’ perceptions about the company by introducing products with more features and slightly higher pricing. Fierce global competition and technological developments make it much easier for competitors to learn about products and replicate them. To stay ahead of competitors marketers must innovate and often create and introduce new products on a consistent schedule. Companies with limited depth in a product line may miss out on more sales unless they can add new products to fill out the line. Some firms market seasonal products that garner their highest sales during a certain time of the year or sell cyclical products whose sales fluctuate depending on economic or market factors. Expanding the firm’s product mix into new areas may help offset these fluctuations. For manufacturing firms an additional benefit is realized as new products utilize existing production capacity that is under-used when seasonal or cyclical products are not being produced.

Failure of New Products:Many new products with satisfactory potential have failed to make the grade. Many of the reasons for new product failure relate to execution and control problems. The following is a brief list of some important causes of new product failures after they have been carefully screened, developed and marketed. 1. No competitive point of difference, unexpected reactions from competitors, or both. 2. Poor positioning. 3. Poor quality of product. 4. Nondelivery of promised benefits of product. 5. Too little marketing support. 6. Poor perceived prices/quality (value) relationship. 7. Faulty estimates of market potential and other marketing research mistakes. 8. Faulty estimates of production and marketing costs. 9. Improper channels of distribution selected. 10. Rapid change in the market (economy) after the product was introduced. Some of these problems are beyond the control of management; but it is clear that successful new product planning requires large amounts of reliable information in diverse areas. Each department assigned functional responsibility for product development automatically becomes an input to the information system needed by the new product decision maker. For example, when a firm is developing a new product, it is wise for both engineers and marketers to consider both the kind of market to be entered (e.g., consumer, organizational, international) and specific target segments. These decisions will be of paramount influence on the design and cost of the finished goods, which will, of course, directly influence, price, sales, and profits. EXAMPLES:(1) Sony Betamax The 1979 Betamax was a real breakthrough for its time and for the video recording business. It’s a shame it didn't catch on. Grandma must be pretty ticked off that all of her memories are trapped in a dead format.

Why it failed:
Despite having higher quality (and a cooler name), Betamax was defeated by VHS when over 40 companies decided to run with the VCR-compatible format instead. The lower price of VHS-C camcorders probably helped a little too. (2) Coca Cola- New Coke Bill Cosby, a soda can, and a crystal ball. Nope, nothing odd there. Is Bill Cosby really trying to be believable?

Why it failed:
There was nothing wrong with old coke. Life lesson: If it ain’t broke, don’t fizz it.

(3) Pepsi - Crystal Pepsi Who knew that 15 years later Van Halen would be done with Sammy Hagar and bring back David Lee Roth? Also, who knew we would live in a world without Crystal Pepsi? We were pretty sure it was here to stay.

Why it failed:
Similar to New Coke, there was no real need for Crystal Pepsi. Despite the shifting tides in early 90’s marketing towards healthiness and purity, people just didn’t get excited about a clear caffeine-free Pepsi. Not really a surprise- those who were that concerned with the health and color of their beverage probably would not be Pepsi drinkers to begin with. (4) McDonalds - Arch Deluxe Burger. Anytime you think the best way to market your product is by standing in an elevator in a chef's outfit and begging the people on that elevator to eat that might want to go back to the drawing board.

Why it failed:
The goal of the Deluxe line was to market McDonald’s fine cuisine to the adult demographic. Unfortunately, adults weren’t interested in paying significantly more for slightly different burgers.