The Six Steps in New Product Development Chapter 10, Section 4

Step 1: Idea Development Coming up with a new idea Need to think about customer’s needs Many companies have a group of people whose job it is to come up with new products One way to get new ideas is to identify problems that currently exist

Step 2: Idea Screening Screen (or take a closer look at) new product ideas to decide which ones are the best Some criteria include: Is there an identified market for the product? Is the competition in the market reasonable? Do we have the resources to produce the product? Is the product legal and safe?

Step 3: Strategy Development Next, the business will create and test a sample marketing strategy Research is done to identify target market Distribution, price, and promotion are discussed

Step 4: Financial Analysis Costs of production and marketing, sales projections for the target market, and resulting profits will be calculated Computer models can help as well Best and worst-case scenarios are calculated Also, make sure profit is suitable for company

Step 5: Product Development and Testing Getting materials, equipment, and labor (training) Finding a company to make the product for you Test sample/prototype Test market Small quantity is first used to see how the product does If unsuccessful, company can stop production before a large amount of money is spent

Step 6: Product Marketing Full-scale introduction into the target market Retailers, transportation companies, and advertising agencies get involved High production levels to meet the customer’s needs Adjustments need to be made as necessary