NPD

#1: Idea generation

• Internal
• External

Now days businesses use open innovation or crowd

sourcing techniques and Intrapreneurial efforts to
generate new product/service ideas

Besides company R&D new product ideas come from

Customer, Company Heads, employees, sales force.
 #2: Idea screening (R,W,W)

Real: is there a real need and desire for the product

Win: Does it offer a sustainable competitive advantage
Worth doing: Does it fit the company’s overall growth strategy
#3: Concept development &
Testing
• Product idea: a possible product that a
company feels it can offer
• Product concept: detailed, meaningful
statement of the idea
• Product Image: way customers perceive
an actual or potential product
Example:
Product Idea: Healthy Food Place
Product Concept: Organic, Vegan snacks
served in a Self-service format, mornings
and evenings.
Concept testing
Presenting the concept symbolically or physically – words,
image/picture, physical and virtual models, etc. to the customer and
getting feedback
 #4: Marketing strategy development

1: TG, value proposition, sales market share and profit goals

for the initial few years
2: Planned price, distribution and marketing budget for the
1st year
3: Planned long run sales, profit goals, and marketing mix
strategy
 #5: Business analysis

Review the projected sales, profit, costs etc. to see if it

satisfies company objectives.
 #6: Product development
• Product concept gets translated into a physical real product or
offering.
• It shows whether a product idea can be converted into a real
offering.
• Product is developed and tested rigorously to be sure it can
perform safely and effectively. If customers will find value in the
offering.

• Alpha testing: done inhouse, Gillette

• Beta testing: done with users, Google
 #7: Test marketing
The product and the marketing program are introduced in a
realistic market setting.
Standard, controlled and simulated test markets

Factors affecting TM decisions:

• Cost of R&D
• Company’s confidence in the new product
• Competitor’s ability to copy and launch
 #8: Commercialization

Introduce the new product into the market.

High-cost activity.

Important questions to be answered – Where i.e., Place &

When i.e., Time
Connect & Develop