MR JIM : New Product Development Strategy, Process, and Examples : There are many business strategies that you can do to maximize profits, one of which is developing new products .
New Product Development Strategy, Process, and Examples
You can liken this new product to a new wind that can become a magnet for consumers. Here's the full explanation!
Definition of New Product Development
In short, the development of this product will be based on the innovations that the company is doing as an upgrade or it could be a new choice for consumers. Well, there are several examples of definitions of product development according to experts:
1. Tjiptono (2008)
Product development is a strategy for creating new products. An example of the original product of the business being modified and refined.
2. Armstrong and Kohler (2008)
Product development is included in the company's marketing growth strategy by modifying old products or making new products that are more effective.
New Product Development Strategy
There are many positive and negative impacts that might occur if you carry out a product development strategy. If you don't think about it carefully, the results will tend to be negative.
Fandy Tjiptono has a development strategy that you can find out. It is divided into 3 strategies, namely:
1. Quality Improvement
According to Fandy, you need to focus on improving the quality of existing products, such as speed of service and product usability for consumers.
This is included in the easiest development because you only need to replace a few components such as raw materials and customer service expertise.
2. Enhancement of Product Features
As a businessman, you need to convince consumers that the product you are selling has features that differentiate it from other products. This strategy is included in the development strategy because it is quite crucial.
There are 4 special elements that you need to pay attention to, namely quality, diversity, accessories, and safety for users.
3. Improved Product Style
This product improvement strategy refers more to the appearance value section. For example choosing the right color, a safer and more attractive form of product packaging, as well as the design of the product.
New Product Development Goals
Before starting to look for the application steps, you also need to interpret what goals you can take when developing your product. Some of these goals include:
1. Fulfillment of Customer Desires
Every business must have experienced criticism and suggestions from customers. You cannot take this for granted. You can even make some of these criticisms as the goal of product innovation.
For example: In a forest honey business, customers want additional products such as bee pollen from your business' forest honey. Analyze the suggestions and count how many people ask for the same thing at one time.
If the request for a new product is more than 10% of the total customers in one period, then you can fulfill that desire.
2. Increase in Sales Turnover
Some businesses that decide to develop new products also aim to increase sales turnover. For example, in business, the more products, the more opportunities to make a profit in one period because people's needs vary.
3. Maximizing Production Resources
For example, a mountain bee business can produce 5 kg of honey from 10 cages. While the honey is being milked, you can make the dregs of the mountain bee cage into other honey products, for example bee pollen. This will reduce waste levels and maximize production resources.
4. Intense Competition
The purpose of holding a product development process in a business is because competition is quite tight in every business with similar products. Therefore, it is necessary to develop new products so that people can be interested in trying these new products.
5. Prevent Boredom
Businesses that sell the same product tend to increase consumer boredom.
For example, there is one shop that sells only 1 menu, namely lemang rice. This can make consumers feel bored so that they will slowly abandon the Nasi Lemang product. For this reason, product innovation is needed every certain period.
New Product Development Process
If you have decided that you want to develop a new product for your business, you can do some of the processes or steps below:
1. Preparation of product ideas
The first thing you need to do in the new product development process is come up with an idea for what product you want to sell.
Of course, you can do this in the following ways:
- Brainstorming of all staff involved in the product development process.
- Scan consumer needs.
- Record what percentage of capital you need to make this product.
- Knowing what positive and negative impacts that might occur.
2. Screening Ideas
In this stage, the rough ideas that you have collected based on the method above will be absorbed and filtered to then be processed to proceed to the working stage. Of course, the idea chosen must be the most innovative and quality idea but still within the target market.
3. Production Development
In this process, you need to collect things such as raw materials and develop alternative products if it turns out that these products are not developing in a better direction.
4. Concept Testing
The selected concept must also go through the testing phase. You can do this by providing some samples to the intended target market and see if there are any criticisms and suggestions from them. Furthermore, also analyze whether the product is in accordance with what consumers want or not.
5. Understand the Applicable Marketing Strategy
New product development means you have to be ready to introduce and market this product from the start. Starting from the release schedule and what is a good strategy so that many people know about the new products that will be launched.
6. Business Analysis and Prediction
The things that you need to analyze in the next new product development process are the following:
- Sales projections
- Capital costs
- You will definitely get the profit
- Maximum sales figure of the product
- Minimum sales figure of the product
7. Completion and Product Launch
Next is the refinement and product launch stage. These improvements consist of the concept development stage into a product and product testing.
After carrying out this stage, it's time to launch the product to the public and re-analyze whether the end result of the product is in accordance with business predictions or even has gone astray.
New Product Development Example
After knowing what the development steps are, here are some examples of new product development that have been successful in the market.
1. Coca-Cola
The Coca-Cola company at first only sold flavored drinks that had many fans. Until finally in 2002, this company launched a new product called Frestea which immediately became a favorite of many people.
It didn't stop there, the Coca-Cola company also launched a new drink called Fanta in 2003 which at that time only had 2 flavors, namely mango and orange.
2. Earphones
This cell phone accessories product also has a history that has developed from the beginning until now. Starting from wired earphones that connect to cellphones to finally Bluetooth earphones which are also very popular with people.
Develop Products as the Latest Form of Business Innovation!
Those are some explanations about new product development , examples, and the positive impact if the company has a developing product.
Of course, a business company that will not be eroded by time if it has creative innovations and helps solve people's problems.
So, make sure to always innovate!
