THE MANAGEMENT OF NEW PRODUCT DEVELOPMENT
A new product is a product that is new to the company introducing it, even though it may
have been made in same form by others. For example, Netflix started out as a DVD rental
platform. Netflix’s shift toward streaming media is a great case study in evolving alongside
market trends.
Product development refers to the complete process of taking a product to market. It also
covers renewing an existing product. This includes identifying market needs, conceptualizing
the product, building the product road map, launching the product, and collecting feedback.
New product development (NPD) is a core part of product design. The process doesn’t end
until the product life cycle is over. You can continue to collect user feedback and iterate on
new versions by enhancing or adding new features.
POTENTIAL BENEFIT OF NEW PRODUCT DEVELOPMENT (NPD)
Good Reputation
Naturally your name or your company’s name is associated to each product that you
launch, a product’s reception is seen as a direct reflection of you or your brand. A well-
designed product can earn you a good reputation in terms of being innovative, high
quality, affordable, and more.
Growth
Is the only way to ensure your business is thriving and not simply doing the bare minimum
to survive. Increased revenue from a successful product development process and launch
can allow your company to grow financially and make more products or invest in other
areas, such as marketing, updating technology, and more for your business.
POTENTIAL BENEFIT OF NPD (Cont’d)
Manufacturing Quality & Cost
Good product development should ensure a high quality product and a
smooth manufacturing process. Particularly, there should be a focus on making your product easy
to manufacture while not sacrificing quality. Ease of manufacturing often means you can have a
faster, less laborious process, which can lead to lower production costs and larger profit margins.
Stay Relevant
The aim of your product development should be to create a product that keeps you relevant to the
current market. Even popular established companies need to release new or updated products
each year or season to meet changing market needs and avoid becoming outdated and stale in the
eyes of consumers. A business that doesn’t stay current with trends and general consumer tastes
will start to fall behind its competition.
What Makes A Firm Innovative In Its New Product Development (NDP)?
Product Innovation is defined as the development and market introduction of a new, redesigned, or
substantially improved good or service. It's not only about developing something new and original, it's also
about taking what's already there and making it much better.
A product becomes innovative when it stands out from the rest and truly makes the customers' lives easier.
Innovative businesses thrive by understanding what their market wants, making smart product improvements,
and developing new products that meet and exceed their customers' expectations.
A firm becomes innovative in its new product development when it continues to create and produce fresh
ideas that are useful and beneficial to the market and in a new product development.
Leading companies use product innovation to get ahead of their peers in three ways:
1. Develop new products that answer the needs of their consumers or create new demand for them.
2. Continuously improve on their core products.
3. Make incremental innovation their second nature.
Integration of Internal Organization for New Product Development
Integrated product and process development combines the product design along with the
design process to create a new standard for producing competitive and high-quality
products. Integration of new technologies and methods provide a complete new dimension
to product design process.
Importance of Coordination in New Product Development
Coordination can be described as that invisible cord, which runs through all the activities of the organization
and binds them together.
Importance of Coordination
Growth of Organization: As time passes, organization grows in size, resulting in an increased volume of
work. There will be numerous employees to handle the work, which are hired for different departments.
Diversification of Business: When a company decides to diversify its business, by entering into new markets
with a new product, the company starts new divisions or ventures, to undertake the activities.
Specific Expertise: Specific tasks are distributed to employees in accordance with their knowledge or
expertise in a particular field. To preserve good ties between distinct groups, coordination aids in bringing
together all the skilled and experienced workers.
Synergy: It is a well known fact that two people working together produce much better work than one person
working alone. Therefore, coordination unites the firm's efforts and aids in creating synergy.
Factors of Human Resources Management in New Product Development
What are the factors of human resource management in new product development?
Culture: At the heart of every organization is its culture, the attitudes and behaviors
defining how things get done when new products are developed.
Workforce Planning: Without proper and adequate work force planning, production of
new products may go wrong. Meaning there is no plan the workers are following, nothing
to guide the workers when producing the new product.
Benefits And Employees Wellness: If the employees are not physically fit and in a right
state it will hinder the rate of production there by leading to inadequate production. The
employees are the back bone and work force of the organization, they must be in a perfect
state of health so as to carry out their tasks.
Factors of Human Resources Management in NPD (Cont’d)
Training: Employees must have a good understanding about the new product they
are paid to produce, they must have the technical know- how to build the products
and use certain equipment's. Without proper training, employees will not be able to
go about with activities, effectively and efficiently while working.
Employee Engagement: Not only must the employees be well trained and have good
knowledge on the product being produced they must also engage in the production
process. If the employees are sitting idle in the office not working or participating in
the activities that enhance production, then no work will be done. All employees must
be involved while working.
TECHNIQUES OF PROJECT MANAGEMENT IN NPD
Project Management Technique is the specific approach to applying your skills, experience,
and the right tools to carry out the specific set of operations needed for you to meet the
projects set of requirements.
Three (3) vital techniques a management in a new product development must posses.
• Classic Project Management Technique: This is one of the simplest, most-often used
techniques in project management. It includes a detailed plan with all the tasks and
activities that should be performed. Things to be done are arranged based on their
urgency and dependency.
TECHNIQUES OF PROJECT MANAGEMENT IN NPD (Cont’d)
• Critical Path Method: This is a popular subtype of the agile project management
methodology meant to help you visualize your project and then track your progress
on it. One of its main perks is that it facilitates work transparency.
• Program Evaluation And Review Technique (PERT): In project management
this entails visual tracking of complex, detailed planned projects in specialized
PERT charts. The emphasis of this technique is on constant task analysis, estimating
the time and budget needed to successfully finish a project.
FAILURE IN NEW PRODUCT DEVELOPMENT
When a product fails to gain enough demand after its launch, thus failing to recover its expenses, we know
it’s a product failure. The symptoms often include a decline in sales, more costs than expected, and the
inability to survive in the market.
Product failure can be defined as an inability to persist in the market due to various reasons.
Product failures occur when a new product fails to gain sufficient demand and creates a negative first
impression, thus gets negative feedback from early users.
The following are some reasons a new product might fail:
[Link] new product or service does not fit with the customers' perceptions.
2. Lack of basic market understanding 3. Poor Planning & Poor Execution of Marketing Plan
4. Product Flaws 5. Wrong Market Research
6. Incorrect Pricing 7. Weak Lunch