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New Product Development Process

The lifeblood of business

New product development (NPD) is the way companies refresh their appeal to customers. This month, Thom Poole explores methods of product development that can be adopted by all sizes of company in any industry.

Why develop new products?

Companies need to find a competitive advantage to be successful, including the need for new, fresh products to keep customers interested.

The famous Ansoff business model identifies four ways to grow - two methods use existing products, and another two, new products. New product growth can then either build a business presence in an existing market, or help break into a new market.

The Ansoff Matrix showing the need for new products

The Ansoff Matrix

Many modern "new" products are nothing more than product line extensions or revamped products. This works to an extent, but truly new products can revitalise a company's fortunes, and help sales existing products.

Key development principles

When developing a new product, certain standard principles are key to NPD. The process is broadly as shown.

This process follows a methodology adopted by the Time to Market or Money process (TTM). This uses a series of milestones, they key ones are shown in bold, and these generally involve a freezing of specifications.

All projects start with idea generation, usually in the form of brainstorming sessions. Another difference to other processes is that TTM continues after the product is launched, and includes a project post-mortem. Other process, such as DSDM, Milestones, Product to Market, etc are variations of this, but are not as rigorous.

The Time to Money or Market product development process

TTM is the best process I have worked with but the process alone will not ensure success as NPD, whichever process is used, must have full management support.

I've managed this in the past by aligning the corporate bonus scheme to the development of new products. In doing this products were developed quickly and accurately – with a resulting increase in profit.

Product development problems

A lack of focus means that projects tend to drag, and disputes arise as a result of unclear specifications. By freezing requirements, and being disciplined about adhering to the requirements, projects can be delivered to time and budget.

NPD processes do need the support and commitment of directors. The process must also include a positive form of post-mortem to help the business learn, and keep the interest of the directors.

When you develop physical products it is easy to set milestones around the prototype, null (or pre-production) series development, production line testing, etc.

Similar methodology can be used in other business development scenarios, for example I used the TTM process to develop an e-commerce strategy and website design with customers. In this, the methods of setting milestones and more importantly recording and freezing requirements in such a way, ensured timely development to budget.

Your organisation

Project management skills are obviously a major contributor to the success of a project, but it does not mean clever use of software packages. Adherence to a diarised project schedule, ideally managed by a dedicated person is sufficient in smaller scale development projects.

The project manager needs to manage the cross-functional teams carefully, understanding the elements of the functions, such as finance, development and production, and with the marketers at the beginning and end of the project.

Finally, and I make no apologies for emphasising this again, is the need to have the whole company, and any agencies, to get behind the project and its goals. If everyone is committed to the successful launch of the project, it is more likely to be a success and fulfil your requirements.

Summary

About the author

Thom Poole is a Chartered Marketer with the Chartered Institute of Marketing, and a member of the Marketing Society. A marketer with over 19 years experience in online marketing and web strategy, Thom is strategic marketing consultant for Jack Marketing Solutions, working with SMEs. He also teaches people web design from beginners to professionals, as well as CRM, eCommerce, etc. A regular speaker on the CRM and e-marketing event circuit, Thom has also written a book on ethical e-marketing, called "Play It By Trust". The book is available at the publishers as a hardback or download.

Article first appeared in the Daily Telegraph Business Club, January 2008

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