New product development opportunities

New product leads to sustainability.

Opportunities arrive when you develop new product ideas

New product ideas and opportunities are everywhere like never before. In business, new product development involves a complete process of bringing a new product or service to market. However, nothing happens until you capture the new product idea or opportunity and start to take action to bring it to reality.

The objective of new product development is to cultivate, maintain and increase your market share and profitability by satisfying a consumer demand. Not every product will appeal to every customer, so defining your target market for your new product idea is critical.  This must take place early in the new product development process. Market research should be conducted during all phases of the design process. From inception, while the product is being designed and after the product has been launched.

Have you a great idea for a new product or service?

New Product creation model

Conceptual models are used in order to facilitate a smooth new product development process. Parts of your new product development model might include:

  1. Understanding and observing the market, the client, the technology, and the problem to be solved.
  2. Gather the information needed to move forward as a first step.
  3. Visualise new customers or your business using the new product.
  4. Prototype, evaluating and improving your idea, opportunity or concept.
  5. Implementation of design changes which are associated with more technologically advanced procedures.
  6. Marketing ideas for the new product along with associated services.

Take the customer experience into account

Customer experience can be defined as your customer’s perceptions, both conscious and subconscious, of their relationship with your organisation.  Perceptions resulting from all their interactions during the different stages ‘customer life cycle’.  There will always be demands for new products and services if you pay careful attention to this important aspect of business. https://goo.gl/WaJ98U.

Use a development plan

Ever wondered how your competition, or other businesses, managed to get ‘that’ new product off the ground? It’s likely they created a product development plan to help them design, create and build that product.

Use a development plan to help you get your new idea off the ground. I read somewhere that you first have to learn the rules, then, you get to break them to fit your circumstances. Understand what you want out of your business when pricing your products. A well thought-out product development plan can help you avoid wasting time, money and business resources by:

  • An accurate description of the product you are planning will help keep you focused and avoid problems and disappointments.
  • Understanding customers problems, frustrations, wants and needs so you don’t waste time and resources.
  • Avoiding poor outcomes because you accurately plan and resource each product development project.
  • Not overestimating and misreading your target market, so you organise your research.
  • Never launching a poorly designed product or a product that doesn’t meet customer requirements.
  • Incorrectly pricing products because you know you need the right margins.
  • Not spending resources you don’t have and in so doing putting the business at risk.
  • Avoid running out of resources to develop the product because you plan ahead.
  • You understand developing too many products at once can lead to chaos because you don’t have the resources.
  • Not exposing your business to unnecessary risks and threats so you can handle unexpected disruptions.

Product development process

The product development process typically consists of several activities that are part of delivering new products to the market. Every new product will pass through a series of stages from idea through design, manufacturing and eventually market introduction. The development process basically has three main phases:

  1. The idea stage is the set of activities employed before the formal and well-defined requirement specifications are completed. Requirements are about having a view of what the product should do to meet a perceived market or business need.
  2. Product design is the development of both the idea and the detailed design of the product. This turns the what of the requirements into a specific how this particular product will meet those requirements.
  3. Manufacturing is the phase of detailed engineering design so that the product can take form. Testing may be used to validate that the prototype actually meets the design specification and the requirement specifications that was previously agreed to.
  4. Market introduction or commercialisation of the product represent the action steps to be taken to launch the product into the market.

A detailed process will help to guarantee a successful new product

In today’s quickly changing business world, innovation and research and development (R&D) are crucial if you want to not only survive, but thrive. Without sticking to a basic process, you will find it difficult to stay ahead.

  1. Establish the market requirements or the problem you want to solve.
  2. Clarify the requirements of your business, e.g. to expand lines and ranges to improve competitiveness and revenue.
  3. Brainstorming and idea generation.
  4. Analysis of the ideas and opportunities presented.
  5. Consider the business ability and capacity to deliver.
  6. Product viability and final selection.
  7. Design issues including servicing requirements.
  8. Development of prototype.
  9. Market testing.
  10. Commercialisation aspects of the new product, packaging, availability, protection of Intellectual Property (IP).
  11. Customer services requirements, such as training, returns, warranty.
  12. Pricing strategy.
  13. Sourcing suppliers and materials, warehousing.
  14. Production, build of materials, technology to be used.
  15. Set up distribution channels to be used.
  16. Launch the product.
  17. Monitor and review market acceptance.
  18. Increase production and marketing or reject the product and move on to another idea.

Product components

Without breaking down all the components of a product it is very difficult to arrive at accurate costings on which to base your pricing. Modelling techniques help to cope with configurable products where changing a small part of a product can have multiple impacts.

Components are the identifiable inputs, parts, pieces, assemblies, services and systems that are required to complete or finish a new product. Each component will have an impact on the final price.

  • Raw materials.
  • Direct labour.
  • Factory overheads.
  • Business operating expenses.
  • Marketing and selling expenses.
  • Financial expense.
  • Taxes.
  • Warehousing and logistics expense.
  • Waste, losses, damage, shrinkage.
  • Discounts.
  • Product support costs, including, training and warranty costs.
  • Distribution and commission costs.
  • Profit margin required.

Unfortunately, many businesses fail simply because they forget to include a component until it is too late. Many new products are sold before the full realisation of the product components and their costs.

Product pricing strategies

One of the secrets to business success is pricing your products correctly to suit the market and your profit requirements. Get your pricing strategy wrong and you may create problems that your business may never be able to overcome. Far too many businesses price their products on a ‘gut feeling’ or, on what the competition is doing. Price your products correctly and that can improve your revenue and profit while creating foundations for your business that will prosper.

Pricing your products too low, or discounting too heavily, can have a disastrous impact on your bottom line. Even though business owners often believe this is what they ought to do in a down economy, it is to be avoided. Over-pricing a product can be just as detrimental. This is because the buyer is always going to be looking at your competitor’s pricing. You don’t want to leave too much room for them to move. What will impact your pricing strategies and what will you take into account before setting the final pricing structure:

  • The target market.
  • Your business objectives.
  • Product and service costs.
  • Prices of the competitors.
  • Demand for your product.
  • Product line pricing.
  • Loss leaders.
  • Differential pricing for different groups.
  • The marketing mix.
  • Perceived value.
  • Psychology of pricing.
  • Image pricing.
  • Market-skimming pricing.
  • Distress pricing, for when you need to quit a product or line.
  • Marketing penetration pricing.
  • Market trends should also be considered.
  • Pricing for slow moving and dead stock.

Establish time frames

You need to allow adequate time to develop and implement your new products. Your objectives for developing new products should set out your time frames and your deadlines for implementation. Be thoughtful and realistic. Some objectives might overlap but others will be mutually exclusive.

  • Your objective to race against your competition will require dedication, efficiency and discipline from your team.
  • To achieve a specific launch date will be influenced by seasonal demand and events in your business and the marketplace.
  • Be responsive to your customer’s requirements and demands will require time for research to ensure you develop the right products at the right time.
  • Your ability to stick to business as usual and maintain other schedules affects the time and resources you make available for new product development.

There are many tasks involved in developing a product that is appropriate for your customers. The nature of your business and your ideas will determine the time frames you need to set. You may be able to skip or duplicate certain stages or start some of them simultaneously. Other times you may have to allow for delays in supplies, breakdown in production and last minute adjustments to the final product.

Are you utilising your creative skills

What’s Chinese cooking have to do with anything?  This is about how you can apply the various aspects of a hobby to create a new product. One of my hobbies is Chinese cooking. It has helped me to think through the many challenges I was confronted with in my businesses and life over the last 35 years. If you are feeling low, frustrated or need an inspiration for your new product development then this post will help. https://goo.gl/fcMmpB.

Are you utilising new technologies

The currently emerging technologies contain some of the most prominent ongoing developments, advances, and innovations. The exciting part is that much of it can be inexpensively utilised by smaller businesses.

Graphene, NBN, 3D printing, solar, robotics, big data, analytics, battery storage are examples of new technology. All can create products and services enhancements and new product development ideas.

capture-your-ideas

Capture your ideas and opportunities. A picture or diagram no matter how amateurish is worth a thousand words.

 

Business sustainability might sound like it’s out of sync with technology and product development . You can find many examples of sustainability and technology being seriously considered in marketing, finance, management and operational projects. The main elements to consider include:

  • Planning, analytics, problem-solving and decision-making because they are critical to sound product development.
  • Employee and customer engagement so everything runs smoothly towards the right outcomes.
  • Improve the customer experience.
  • Warehousing and logistics management should not be overlooked so you are fast to market.
  • Product and services planning and delivery.
  • Monitoring and maintenance of product related activities ensure better outcomes.

Should you outsource new product development?

Like many other aspects of a business, outsourcing has real potential. Outsourced new product development is a practice in which you engage a third-party provider. For the development of products and services in a variety of fields and even idea generation. Often third-parties can develop product ideas quicker, cheaper and better. There is a wide range of outsourcing services available to smaller businesses, including:

  • Taking your concept and make it a reality because you don’t need to have all the resources.
  • Accelerated product development programs so you can get to market fast.
  • Superior design capabilities because the vendor has superior equipment.
  • Complex problem-solving is easier because the vendor has superior knowledge and experience.
  • Design process consulting and management becomes easier because the vendor has the right experience.
  • Technical and feasibility analysis are made easier because of improved collaboration.
  • CAD and other technologies are used, perhaps beyond your financial capacity so you can get on with your product development.
  • You should be able to look forward to receiving objectivity and perspective on your product ideas because of their experience.

Today’s businesses are highly competitive. However, a bright idea, strong strategy and in-depth marketing knowledge may not deliver the required results. Unless you pay attention to product development quality and innovative development practices. Outsourcing product development helps people interested in product development. Including helping start-ups in freeing their valuable time and resources. This allows them to concentrate on their core activities and what they like doing and are good at.

Quotable quotes

“The future of good customer relations rests on engaging with them and understanding their problems, frustrations wants and needs. While creating an appropriate new product and associated services.”. Peter Sergeant

“A lot of companies have chosen to downsize, and maybe that was the right thing for them. We chose a different path. Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets”. Steve Jobs

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