The 6 Step Process of New Product Development [Exaplained]

Process of New Product Development (NPD)

New product development (NPD) is the process of bringing a product idea into the market in its physical form or as a service. The process includes the activities like brainstorming ideas, evaluating ideas, market analysis, and finally making the products.

Steps for developing a new product vary from organization to organization. It often varies with the nature of the product you are developing. However, the most common steps for new product development include six.

  • Idea generation.
  • Idea screening
  • Business analysis
  • Product development
  • Test marketing
  • Commercialization

Let’s discuss each of them.

Idea Generation

The process of new product development starts with idea generation. You should brainstorm ideas that will solve the customer’s problems. Ideas are what you can turn into the actual product.

Your task here is to generate as many as product ideas. For this, there are two main sources you can opt for.

  • Internal Source – Your employees are also a great source for new product ideas. As they are closer to the market and consumers they have more practical knowledge of what the market is going through.
  • External Source – External markets also provide valuable information about new products. Information from consumers’ complaints, competitors, market trends, etc. is a great way to understand the external market.

Generate product ideas that differently serve the customers as against competitors serving. Your ideas should be your core product. You must know what core benefits your product will offer when consumers purchase.

Screening Ideas

Once you generate ideas, the next step in the product development process is screening and evaluation of ideas. All ideas you have generated would not be profitable nor you can perfectly work on all ideas.

So it is better, you should screen the different product ideas and come up with some or one that is attractive and has higher potential.

Also Read: What is Augmented Product?

Usually, this step of product development includes the selection of the most feasible product idea after screening and evaluation of all ideas are done.

So, screen ideas in terms of their profit potential and your company’s competency to grab that potential. The selected product idea should sync with your company’s objectives and resources.

Business Analysis

After the selection of the new product idea, the next task companies do is to study the various marketing opportunities of that idea.

It is necessary to know whether the new product idea you have selected has the potential in the actual marketplace or not. Try to find the answers to questions like – does the selected idea is feasible, whether will it generate profits, whether will it provide value to consumers, will it fulfill the company’s objectives.

Also Read: Types of Product

The business analysis step of product development’s main goal is to know whether the chosen product idea is commercially viable or not. If the idea does not match the questions above, you still can change your idea.

And, if the selected idea has the potential marketing opportunities you have expected, the next phase of new product development is product development.

Product Development

Once you have selected the new product idea and completed the business analysis this is the step where you convert your product idea into a technically and commercially feasible product.

Related: Stages of Product Life Cycle

Here, the actual production process is done and the idea is turned into the actual product. For this, import the necessary raw materials, have the necessary equipment, and delegate tasks to production personnel.

You should not do mass production at this stage, you must first make a few products to do their testing. Do product designing, packaging, and branding, and ensure the technical quality of the product.

Test Marketing

Before commercializing the product market testing of the product is necessary. It is important to know whether or not the product you developed meets the customer’s expectations.

For this, test marketing is necessary. Do pilot testing. Share your products with the target consumers and ask for their feedback on how the product works.

If the consumers give positive feedback, the product can be commercialized, and if they give negative feedback the product can further be sent back for redevelopment or modification.

Once you feel your product is ready to solve the consumer’s problems and is effective enough to meet the company’s objectives, you can move on to the next step.


Commercialization is the last stage of the new product development (NPD) process. This is the step for which you have been performing all those steps, this includes introducing the new product in the market.

So far you have created your product ideas, screened, analyzed, developed the product, tested it, and now it is ready for consumers to use. At this stage, you need to promote your products to make larger markets aware of your product and attract them to buy your products.

You can now produce your product at a large scale, do mass promotion, and mass distribution, and reach as many as consumers you can. The commercialization step of product development is the same as the introduction stage of the product life cycle (PLC).

In Conclusion…

Hence, these are the six main steps of the new product development process. Follow these steps and turn your ideas into an actual product and make it ready for commercialization.

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