Step 1: Idea Generation
It involves sourcing of ideas for a new product (Kotler & Armstrong, 2016). A company may get ideas from internal forces that involve employees of a company to generate ideas or from the Research and Development department. A company may also opt to source ideas from external forces from suppliers, customers, business magazines, advertising agencies, and seminars. Customers have been proved to be the best external sources as they pose questions and complaints regarding a particular product hence a good source to identify a market idea.
Step 2: Idea Screening
The ideas generated are screened and evaluated (Kotler & Armstrong, 2016). It is crucial to discuss which ideas to proceed with and which to drop. Companies evaluate the ideas by analyzing the customer’s needs, the competitive ability of the product, availability of resources to invest in product ideas, and the profits to be realized.
Step 3: Concept Development and Testing
The marketer is tasked with the responsibility of developing a new product into other concepts and identify the customer’s tastes and preferences for each concept.
Many companies introduce concepts to consumers before turning them into new products. A firm may opt to present the concept product idea physically or through digit platforms through word or image description. After the customers familiarize themselves with the concept product, a test may be presented, and marketers observe the respondent’s initial reaction of the consumers towards the concept product. The responses from the consumers help to estimate the sales volume.
Step 4: Marketing Strategy and Development
It involves designing an initial market strategy for a new product based on the concept product in the market (Kotler & Armstrong, 2016). The first part of the strategy is the target market, planned value proposition, sales, and profit goals (Brands, 2014) for the initial years in the market. The second part involves the products planned price, distribution, and marketing budget for the initial years. The marketing budget will entail media campaigns, product marketing through advertising, and website to familiarize consumers with the product. The final step describes the planned long term sales to be run and the profit goals and marketing mix strategy (Brands, 2014). It will be crucial to realize an after-tax Return on Investments. Achieving this requires the prices to be hiked depending on the economy and competition in the following years, the market budget raised, and market research reduced.
Step 5: Business Analysis
It involves studying the business and statistical data if the sales, costs, and profits of the new product increased and the suit the business objectives set to move to the next stage (Kotler & Armstrong, 2016).. In order to identify the possibility of a risk on the sales, an estimate of the minimum and maximum sales of a similar product is worked out. The management of the firm then analyses the expected profits and costs.
Step 6: Product Development
It calls for investment to identify if the concept product will turn to a workable product by testing (Kotler & Armstrong, 2016).. The test helps to identify if the consumers are attracted to the product. A company gets to know this by listening to their attributes after testing.
Step 7: Test Marketing
It involves the company introducing the product into an actual market set up (Kotler & Armstrong, 2016). The product undergoes, advertising, distribution, pricing, branding, and packaging takes place.
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Step 8: Commercialization
It involves introducing the new product on the market. A company chooses an area to launch the product (Kotler & Armstrong, 2016). However, if a company’s resources are inadequate, a company may delay introducing the product until the following years.
Brands, R. (2014). 8 step Process Perfects New Product Development. Huffpost.com. Retrieved 22 September 2020, from https://www.huffpost.com/entry/8-step-new-product-development_b_4556363.
Kotler, P., & Armstrong, G. (2016). Principles of Marketing. Pearson Education Limited.