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

2. 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

3. 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?

4. 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

5. 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

6. 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

7. 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