How Companies Develop New Products: The New Product Development Process

Following product development, market testing assesses how the target market reacts to the new product. Companies like McDonald's might test a new burger in a small town that represents their typical customer base to see if people will buy it.

Commercialization is the stage where the product is officially launched into the market. This involves deciding where and when to sell the product, and how to price and promote it, akin to the rollout strategy for new iPhones.

After idea generation, companies move to concept testing. This involves developing a rough idea of the product and testing it with potential customers to gauge their interest and gather initial feedback. For example, a professor planning a study abroad trip would outline the itinerary and activities, then ask students if they would be interested in such a trip.

The first step in new product development is generating ideas. These ideas can come from various sources, such as competitors, customer feedback, or suppliers. The key is to assess if an idea can help the business grow.

Once a concept is tested, the next stage is product development, where prototypes and working models are created. This includes alpha and beta testing to refine the product until it reaches its final version.

Finally, companies evaluate the results of the product launch. This involves assessing if the product is selling well, if customers are satisfied, and if it's achieving its intended purpose. Sometimes, evaluation can even lead to discovering new uses for the product, as seen with Viagra.