What is new product development

New product development (NDP) becomes necessary for business owners to help create new product ideas and launch new products to stay ahead of competitors.  

Brainstorming new ideas for creating new products might be easy. However, it becomes hard for business owners to convert those ideas into products.

Also, a risk is involved when launching a new product in the market, like loss of effort and investment (if the new products fail). That’s why proper strategy is required to determine the success of the new product in the market. 

New product development is a perfect way to check the market’s potential strength of different product ideas. We’ll discuss all the stages of new product development(NDP) and understand what NDP is.

What is the New Product Development Process?

A new development product is a process of converting innovative ideas into successful products. NPD contains multiple stages that involve the performing of different tasks.  

Almost every business needs to launch a new product in the market regularly. Moreover, companies making digital products must constantly add innovative features to their product to retain their existing customers with the help of project management

But converting new ideas into products may require significant investment and effort. This is where the requirement to implement the NDP methods, and great project methodology comes in and helps minimize the risk of product failure in the market. 

New product development involves many activities, such as market research, customer feedback, product testing, etc., which helps business owners check all the areas of improvement for launching new products. 

Know more about the new product development from this video:

You may have seen many examples of new product development in the market. Understand all the types of new product development so you can decide which kind of NPD will be suitable for your product. 

What are the types of new product development?

The new product development comes into four different categories:

1. New-to-the-market

The company launches new products in markets that have never existed before. The new-to-the-market development involves working on the creation of new technologies that create an entirely new product segment in the market. 


2. New-to-the-company

The company will try to enter the newly established market for the first time. Many companies use this NDP type to expand their business by launching new product varieties for different market segments. 


  • Mi launching intelligent TVs and laptops
  • Microsoft launching VR headsets

3. Extension of product line

Instead of replacing older products, the companies extend their product lines to create more varieties and provide more options to their customers. Many food chains are using the product extension approach to create more varieties in their items. 


  • Coca-Cola is introducing Fanta, Sprite, and other drinks to create more product varieties. 
  • Pizzahut launches a new range of pizza with different toppings.     

4. Improvement of existing product

Instead of a new product launch, the company releases the upgraded version of its existing products. The company works on improving its current products by adding new features and overcoming product limitations and drawbacks.   


Microsoft upgrades its Windows operating system to new versions such as Windows 7,8,10 & 11 by adding new features and removing drawbacks.  

5. Repositioning

The company uses its existing products to target new market by making minor product modifications. Repositioning helps companies increase their product user base by targeting new categories of customers. 

  • Cadbury gems repositioning to target adults
  • Taco Bell is repositioning from cheap Mexican food to a youth lifestyle brand (targeting youths)

Let’s check all the stages of new product development (NPD) to help you understand the process of NDP in detail.          

7 Stages of New Product Development

New product development stages

1. Idea generation

Exploring the ideas for a new product is the first step to creating a successful outcome. New product ideas help you to overcome existing customer problems creatively. You need to understand your target audience and its pain points when exploring new ideas.

There are two ways to explore new fresh ideas for your product:

I. Internal source

The company finds unique product ideals through its staff contribution and investment in research and development(R&D). Brainstorming new ideas with the help of internal sources can help you to point out all the drawbacks and limitations of your current product.

II. External sources

The company finds new ideas for its product from sources outside the company. The external authority for brainstorming ideas may include competitors, your customer’s distributors, suppliers, etc. You can research all these sources and ask them directly (except for your business competitors) for new ideas and suggestions for your upcoming product.

2. Idea screening

After coming up with an idea for your new product, you have to decide whether the new concept will be profitable for your business or not by doing idea screening.

You can categorize your ideas into “strong” and “weak” by checking the compatibility of all the new ideas with a company’s business plan and direction.

You can determine the usability of a new product concept by three primary factors: affordability, return on investment, and market potential.

3. Concept development & testing

Instead of testing the new product, you can use the concept of your product in this stage. 

You can perform the following steps in the concept development and testing stage:

  • Creating a value proposition chart 
  • Competitors analysis 
  • Calculating gain/pain ratio
  • Identifying the product feature

After designing a well-tested product concept, you can take feedback from your few customers to see if the new product concept will be helpful for the customer or not.

4. Business and marketing strategy development

The stage involves setting a profit expectation for your new product. Moreover, there will be working on other activities such as business analysis and marketing strategy to determine how to get a return on your investment. 

5. Product Development 

The stage involves creating a prototype of your product that you will launch in the market. The prototype you will make is a minimum viable product(MVP)

MVP is a simple version of your product that will help you experience the working of your new product and find out the areas you can improve.

You can also involve your few customers to test the MVP of your new product. So you can get feedback from your customer about how they feel about your new product, and they will tell you what things you can include or exclude to make your new product even better.

6. Test marketing

After coming through the series of stages, you have brainstormed the product ideas, created a marketing strategy & MVP, and collected customer feedback to modify and improve your product.

Now, you will be coming up with a final product along with the decided specification, features, and looks of your new product. The next important part of your product development is to perform test marketing for having a final revision of your product.

I. Alpha testing

The product engineer and internal staff analyze the performance and output to check whether the product performs as expected. Once they detect the issues with the products, the engineer makes changes to remove problems and improve the product’s output.

II. Beta testing

The beta testing involves a group of customers performing testing on the new product. The company takes note of customers’ opinions and reviews for the new product and tries to figure out every problem that customers face when using that product.

7. Commercialization

Commercialization is the last stage of product development, where you are ready to launch your product in the market.

There is a need for businesses to establish or rent a production facility in the commercialization phase. At the initial stage, there may be an investment in advertising, product promotion, and other marketing operations and campaigns. 

However, one must you can perform the following essential activities for your new product launching:

  • Preparing your customer for a new product launch
  • Making relevant advertisements for your product
  • Sticking to the marketing strategy that works for your business
  • Choose a launch date for your new product

What benefits do businesses get from the implementation of new product development? Let’s check. 

Benefits of New Product Development for an Organization

Here are the ways by which a new product development process can help businesses to launch their latest products and make them profitable:

1. Help determine the acceptability of the new product

The product development process allows you to test the new concept of your product with your customers and get feedback from your customer for improving your product. Customer feedback helps you to understand whether your new product idea is profitable or not.

2. Improves product quality

Prototype testing will help you check the product quality, such as its user interface, ease of use, etc. However, you can also check if the raw material that you will use to create a new product is suitable or not with the help of product development. 

3. Reduces expenses and chances of failure

Insufficient market research mainly fails new products, costing them a loss of their significant investment. Moreover, proper product testing and taking customers’ feedback help business owners improve their products, reducing the chance of product failure. 

4. Helps in creating better marketing strategies

Product development involves market research which helps business owners gather all the statistics and data related to their customer’s pain points, competitors, suitable platforms for promoting their products, etc. All these market data help business owners to create better marketing strategies for their new products.    

5. Promotes innovation

The product development process speeds up the ways to add innovative ideas to the new product. Product development helps business owners determine the success potential of their unique vision for product development.    

Why is Idea Usher best for changing your product ideas into reality?

Creating and launching your new product involves many risks and costs your investment and effort. Therefore it becomes essential for you to implement stages of product development for your new product to minimize the risk and maximize the chance of a new product’s success in the market. 

Idea Usher can be your trusted partner if you want to implement your new ideas on your product without fail. We are a team of developers and marketers who successfully created products for our clients.

We understand our client’s goals and business motives and are committed to providing a great product experience to your customers. 

Contact Idea usher to let discuss and improve your project by implementing new ideas by performing new product development(NDP) methods on your project.

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(+1)732 962 4560

(+91)859 140 7140

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Q. What are the seven stages in the new product development process?

A. The stages of product development are as follows:

  • Idea generation 
  • Idea screening
  • Concept development & testing
  • Business and market strategy development 
  • Product development 
  • Test Marketing
  • Commercialization

Q. What is the importance of new product development?

A. The new product development is essential for the following reasons:

  • Changing consumers’ priority
  • Increasing competition in the market
  • Giving technological advancement to your products 
  • New business opportunities for its growth & development 
  • Risk diversification 
  • To increase brand awareness among consumers

Q. What are the types of new product development?

A. The new product development comes into four different categories:

  • New-to-the-company,
  • Improvement of existing product
  • Extension of product line
  • New-to-the-market.

Q. What are the characteristics of successful new product development?

A. The characteristics of successful new product development are as follows: 

  • Including your clients/customers in the project
  • All the teams working together
  • Having a clear objective for the NPD
  • Well balancing project strategy and its execution
  • NPD contains a product road map
  • Researching all important areas
  • Multiple product testing
  • Staying focused on a product’s straightforward approach
  • Having a deadline for each task
  • Making your NPD adaptable for any change
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