Introduction to New Product Development Process

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Building a new product can be confusing with a lot of uncertainty considering the different processes involved. This may lead to an inefficient product development process which might in turn also affect the product.

New Product Development Process is a process to convert an idea into a workable software product, consisting of various stages from conception of an idea to launching a software product in the market.

It involves the following stages — Idea Generation, Idea Screening, Concept Development and Testing, Marketing Strategy Development, Business Analysis, Product Development, Market Testing and Commercialisation.

The process has the term New Product as it deals with creating new products, adding new features to an already existing product line, adding new product lines to an already existing product and improving already existing products.

Idea Generation/Discovery

This is the first phase and is important in order to gather ideas which will in turn become the possible features of the product.

It is important to identify the customer problems and then brainstorm solutions focussed on those problems. The problems can be classified on the basis of

  1. if they actually address customer problems or fill in any existing gaps in the solutions already being provided to the customer

The ideas/solutions don’t have to be concrete as this phase only revolves around coming up with as many ideas as possible.

There are many sources that can be referred to for ideas like

  • requests from customers

The solutions can introduce already existent solutions to a new market, adding new features to an already existing product or improving already existing features of a product.

Idea Screening

Once the ideas are gathered, it is important to filter and categorise them and select the ideas that seem to showcase the highest potential.The ideas are evaluated on the basis of whether they align with the vision and goal of the company and if they are feasible in financial and technical terms. Based on these criterias the ideas can be grouped into three categories — ideas which look promising, ideas which can be implemented but don’t lead the board and ideas which can be discarded.

Concept Development and Testing

The idea is converted into a concept in this stage. The idea is elaborated in detail identifying the functionality (use case) it meets and how it solves the problem.

Some important information about the kind of customers who will use the product and when they will use it, the benefits and pain points the product will bring to them, performance of the competitor product in the market — the good solutions they bring to the table, where they lack and the problems they have not addressed is important to gather as well.

Once the most valued features/concepts are identified, they can be validated through customer feedback.

Different sources of data can be used (qualitative and quantitative) like surveys, competition research, focus groups, interviews, reports, data from previous projects to identify the direction.

The main insights to come out of this process would be the focus groups , what they think about the suggested features and alternative features which maybe preferred by focus groups.

Marketing Strategy Development

A marketing strategy is created for the features/ concepts that have a positive feedback in the concept testing phase. It is a way to reach out to the target audience.

It is important to identify the needs and demands of the market(focussing on the customers) the product will be rolled out in. It is also important to analyse the current market scenario and the kind of competition the product is likely to have.

The Marketing Strategy is based on 4 Ps of Marketing.


Product — The product should stand out in the market either because of its unique features or features which are better than the already existing features in the market.The product is finalised based on the concept testing phase results.

Price — Many factors such as the price of competitor products, cost of materials and production, market fluctuations are taken into account while determining the price of the product or service.

The company might also inflate the price to increase the value of the product to build customer loyalty.

Place — Where and how the customer is exposed to the product. This factor is important in determining where should the product be sold how should it be delivered to the market. It governs strategies such as if the product is localised or global, distribution strategy, etc.

Promotion — This P helps in uniquely distinguishing the product through creating brand awareness, social media marketing, etc building an interaction with the consumer regarding the product.

The marketing strategy is the reviewed and revised according to need. Market research can be performed using the online data available online. Various sources online can be used to collate and build a tentative market scenario for the product.

Business Analysis

This stage focuses on analysing if the product is feasible to build from a financial perspective.

A detailed business plan is built which includes estimating selling price based on intensive market research of competition and customer feedback. It analyses how the product will fit in the market and estimates the financial model on the basis of assumptions made on market share.

Pricing can be done in 3 different ways —

  • Price higher than the market for solutions which solve an urgent problem of the customer

The business plan also looks into the investment during product development and the associated costs once the product is launched. Break even analysis helps identify the point at which the product becomes profitable.

If the business plan is in alignment with the goals of the company, the Product Concept moves to the Product Development stage.

Product Development

The Product concept is now developed into a physical product.

Based on the gathered solution to the problem , wireframes and prototypes are built which can be later refined according to the need and response. It is an iterative process.

The prototype/ wireframes are then tested with the customers. The test results are analysed in the form of

  • customer responses and feedback

Testing can be done in formal groups or informally with existing customers. The product is also validated in terms of market and seen if it would be financially viable.The data yielded from the testing provides valuable input to what features should be kept and what features should be dropped or if there are any transitions that can be made to the existing features. Analysing the data can be helpful to make modifications to the final product that will be rolled out.

This process gives way to a well defined product. This is also where a roadmap is made to define the journey of the product and the goals that are to be achieved. It showcases the conceptual as well as technical benchmarks that are to be achieved through collaboration between the different stakeholders of the product team.

Training Once the final product is made, training is important to inform the users internally and externally on how to use the product.

Market Testing

The developed product is now tested in a market setting to check the viability of the software product.

  • Alpha Testing

The test engineers in the organisation test the product on its performance and validate the software for missing features, features not performing according to requirements, etc. This gives way to Beta Testing.

  • Beta Testing

The target groups use the product and give their feedback to the organisation on usability and functionality of the product.

  • The product can also be tested with intended customers. They are allowed to use the product and their feedback is collected.


If the results of market testing are positive, the product is decided to be launched on a larger scale. The launch is planned with details like WHOM,WHEN,HOW,WHERE.

The product can also be launched in waves i.e gradually launching the product in different areas.

Commercialisation involves production, distribution, marketing, sales and customer support strategies to ensure the success of the product. Without these, the product cannot be successfully launched into the market.

The New Development Product Process brings out a systemic approach to innovation.It proves to be very important in the lifecycle of building a product. It not only helps to streamline processes into a smooth flow but also helps in identifying challenges early on in the process of building the product. It involves better management of ideas and solutions into product features and ensures faster time to market.

Trying to look look at products through the lenses of a Software Developer, interested UX Researcher and an aspiring PM :)