Product development is the name of the process that takes place when a new product or service is brought to the market. There are two courses of action that run parallel to product development. One is concerned with idea generation, product design and detail engineering, the other has to do with market research and market analysis. On this essay we are going to focus on the former, listing a few necessary concepts.

Idea generation involves coming up with ideas for new product development which can be gathered using basic research with a SWOT (strengths, weaknesses, opportunities and threats) analysis. Market and consumer trends, the company’s research and development department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or ethnographic discovery methods can also be used to gain insight into new product lines or product features.

Next, there is idea screening, the object of which is to eliminate unrelated concepts before devoting resources to them. The screeners should ask several questions, such as, will the product benefit the customer in the target market? What is the size and growth estimates of the market segment? What is the current or potential competitive pressure for the product idea? What are the industry sales and market trends the product idea is based upon? Is it technically doable to manufacture the product? Will the product bring profit when manufactured and delivered to the customer at the target price?

Concept development and testing is the part of the product development process where marketing and engineering details are developed, in which the parties involved need to investigate intellectual property issues and search patent data bases and determine who the target market is and who the decision maker in the purchasing process is, the features that the product must incorporate, the benefits that the product will provide, how consumers will react to the product, how the product will be produced in the most cost effective way, prove feasibility through virtual computer aided rendering, and rapid prototyping, and how much it will cost to produce it. This leads to the part of product development known as business analysis.

What a business analysis does is calculate likely selling price based on competition and customer feedback, estimate sales volume based on market size and tools like the Fourt-Woodlock equation and assess profitability and breakeven point (the point at which gains equal losses). Market testing is done by producing a physical prototype to test the product and its packaging in common usage scenarios, conducting focus group customer surveys, making adjustments as necessary and producing an initial run of the product and sell it in a test market area to establish customer acceptance.

Technical implementation consists of new program initiation, finalizing quality management system, resource estimation, requirement publication, publishing technical communications such as data sheets, engineering operations planning, department scheduling, supplier collaboration, logistics plan, resource plan publication,
programming review and monitoring, and contingencies, also known as what-if planning.

Next comes commercialization, a step which is considered to be post-product development, and includes launching the product, producing and placing advertisements and other promotions, filling the distribution pipeline with the product. Finally, there is new product pricing with impact of the new product on the entire product portfolio, internal and external value analysis, competition and alternative competitive technologies, differing value segments, product costs and forecast of unit volumes, revenue, and profit.