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A Goal Without a Plan is Just a Wish
Many companies know they have to innovate to grow and stay competitive, but don’t have the resources or roadmap to achieve success. Having a new product development process can help guide you along the way and provide a series of tests that will ensure the best ideas are the ones that get to market. Regardless of what process you may use, it must be flexible enough to allow for revisions and needs to support long-range plans for where you want your product or brand to be 3-5 years from now.
Below is an example of a new product development process for manufactured consumer food products. It can be easily adjusted to fit any other type of product or service.
Discovery – Idea Generation
In this stage breakthrough ideas are generated for new products. Look to customers & consumers for unmet, unarticulated or under-met needs. Examine external market and competitive trends. Ask questions such as “What changes are taking place and what new needs are emerging?” Brainstorming sessions are conducted to explore out-of-the-box thinking and ways to address unmet needs and trends.
The new product team will vote on the top ideas to go into exploration. There is no official gate at this stage.
Exploration and Gate 1
In Exploration, the newly generated ideas from Discovery are filtered through consumer qualitative and quantitative research. This brings the list of ideas to a more focused and on-target list of concepts to later develop into protocepts.
The deliverables:
Ideas, written product concepts for consumer testing and lastly consumer-qualified product ideas.
Gate 1 is a yes/no measurement system for both qualitative and quantitative research results. The overall consumer responses received on product concepts from qualitative research are reviewed and rated. In quantitative research, pre-determined minimum concept scores for total likeability must be achieved to be considered for a vote. The team may overrule and give a yes or no vote even if a concept doesn’t score above the minimum – if so this must be documented.
Scoping and Gate 2
Consumer sensory research is conducted in this stage to determine if the newly developed protocepts match the written concept and if improvements need to be made. Sensory testing provides direction for flavor, size and product interest. A preliminary project investigation is begun to determine technical and market merits.
The deliverables:
1. Initial product definition
• Define the product with as much detail as possible (i.e. target market, benefits,
preliminary costs if available, how we might package, technical requirements etc.)
2. Protocept development and testing
• Bench protocepts developed from Exploration concepts
• Formulation developed
• Consumer sensory testing to determine direction, sizes and flavors for products
• Initial costs of product investigated
3. Preliminary technical assessment
• R&D, operations/manufacturing and engineering appraise the product and pinpoint possible
technical risks and issues
• Find out if the product is technically viable within reasonable costs, time, equipment availability etc.
• Discover any technical, legal and/or regulatory roadblocks
4. Preliminary business and marketing assessment
• The strategic and competitive rationale for the project/product(s) are mapped out
• Determine if the business opportunity is positive, neutral or negative
• Assess market attractiveness, size and potential
• “Size up” the competition using syndicated reports on each concept idea
• If possible, find out the pricing and product sizes for similar products
5. Partnership identification
• Expand the targeted list of partners from Exploration
• After the sensory testing, review the product ideas with potential partners to gauge interest
Gate 2 is a measurement tool for rating the product against the above criteria as above average, average or below average. If the product scores an average rating of “average” or better, proceed to the next phase.
Build the Business Case and Gate 3
In this stage a detailed investigation leading to a business case is detailed. The question of “how to develop this product” is addressed.
The deliverables:
1. Additional concept and protocept testing
• Test the product concept and the protocept with potential partners and customers
• Record all suggestions for improvement, flavors and sizes
2. Refined protocepts – implement improvements from research findings
• Determine what changes are needed for the product to succeed
• Determine one to two flavor profiles and/or size extensions
• Define processing steps
• Write specifications
• Initiate packaging ideas
• Begin shelf life testing
• Firm-up pricing
• Give consideration to regulatory compliance
3. Detailed market analysis
• Create a user needs/wants analysis using the findings from all research – define what
the consumer wants and needs from the product
• Pull together all market information from primary and secondary research
• Determine market size, trends, segmentation, and buyer behavior
• Determine who the competitors are, their product strengths and weaknesses,
anticipated future products, pricing, how they compete and perform etc.
4. Nutritional analysis
• Test the product for a nutritional profile (nutrition facts panel)
5. Detailed R&D and technical assessment
• Define the likely R&D costs, timing and resources
• Look at manufacturability and source of supply
• Detail the product route (how it is assembled),
• Determine the product costs and capital requirements (if applicable)
• Highlight the technical risks and solutions (if any)
• Review intellectual property issues and assess possible technical partners
• Create the refined product specifications
6. Legal & QA review
• Have a legal and regulatory review to spot any potential issues
7. Business plan – includes the following:
• Business objectives and goals
• Product: describe the product and its reason for being; how it is packaged,
priced and distributed; where it will be sold.
• Market analysis: target market, size of market, customer needs, demographics, how to reach them, etc.
• Product marketing and sales strategy and implementation
• Production (operations) plan (includes manufacturing, operations and supply planning)
• Web plan summary: include discussion of website, development costs,
operations, sales and marketing strategies
• Financial analysis: include at the very least the projected Profit and Loss and Cash Flow tables
8. Refined product definition - this is critical to new product success and includes the following:
• Project scope – defines the boundaries of the project (is this a single new product or a family of products)
• Target market
• Product concept –revise the product concept using insights gained from research
• Technical concept and spec sheet
• Packaging
• Positioning strategy
• Product features, attributes, and performance requirements
• Price point
9. Project plan initiated
• Tentative timeline developed from product development to launch
Gate 3 is a measurement tool for rating the product against the above criteria. If the product scores above a pre-determined threshold, proceed to the next phase.
Development and Gate 4
Detailed design and development of the new product and the production process are completed in this phase.
The deliverables:
1. Manufactured prototype of the product (pilot plant scale)
2. Development of the packaging prototype for the product
3. Additional prototype testing to gain consumer and customer feedback
4. Full marketing plan including the Go-to-Market strategy
5. Product production (and procurement) plans completed and approved
6. Sales plan
7. Updated financial analysis completed – ROI, P&L, projected 5 year forecast; determine the payback period, identify any risks, prepare capital request if needed
8. Legal & regulatory issues resolved
Gate 4 is a measurement tool for rating the product against the above criteria. If the product scores above a pre-determined threshold, proceed to the next phase.
Testing & Validation and Gate 5
The product is tested in the market (beta), and commercial plant to verify and validate the manufacturing of the new product, its marketing, and production. The consumer needs to like this product better than what they are using now – this will establish purchase intent.
The deliverables:
1. Results of in-house tests – Did the product perform as expected?
2. Trial production results – Did the timing, costs, resources, equipment planned for production pan out? Shelf life determined
3. Consumer in home usage tests – How does the product perform when used (and abused)? Conduct in-home use tests (IHUT) to measure performance, likeability, preference and purchase intent
4. Customer feedback obtained
5. Test market results – How did the product sell in the test market? What did customers think when purchasing and after purchasing?
6. Updated marketing plan – update with new information and distribution channels set
7. Updated operations plan – update with new information and all regulatory met
8. Updated business and financial analysis - update with new information
Gate 5 is a measurement tool for rating the product against the above criteria. If the product scores above a pre-determined threshold, proceed to the next phase.
Launch
In this final phase, the product enters the market and commercialization is complete but open to product revisions if necessary. It is the beginning of full production, marketing and selling and implementation of both the marketing launch plan and the production plan.
Post-Launch Review
A review of the product’s success should be made 6-9 months after launch. Compare projections to actual and perform a post-audit for lessons learned.
As you can see, the new product development process is a large task with may variable and details to acquire. However, the most important point to remember is that it is flexible and needs to work with your organization. As you proceed through the phases, make adjustments to the process so future product development projects are even more on course.
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