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What is new product development?

Last updated

27 April 2023

Reviewed by

Jen Lee

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Our world is awash with products, and each one has a story.

Few products stem from one big eureka moment. Instead, companies created today's products after lots of research, analysis, and systematic testing to validate the idea and the demand.

As companies have a lot of competition, they must invest time and money into products that resonate with consumers and solve their problems. 

Companies must create new products that balance inspiration, design, planning, and production with a strategic business approach. 

This process of bringing ideas to market is new product development (NPD). 

NPD is different from regular product development as it involves creating and launching a new product and every step in between.

What are the seven stages of new product development?

NPD has seven stages: 

  1. Idea generation

  2. Research

  3. Concept development

  4. Business analysis

  5. Product development

  6. Testing

  7. Launch

Depending on the company, industry, or product, some stages may require a different approach and overlap.

Idea generation

As the name suggests, idea generation is the first stage for developing ideas for a new product.

Companies don't passively wait for ideas to occur to them. Instead, they brainstorm and research to uncover highly valuable problems they can potentially solve. 

Outside of research, you can use many brainstorming techniques, including:


One team member writes a topic or idea on a sheet of paper and passes it to another team member. They write their thoughts or questions about the topic and pass the paper to the next team member, who does the same. The exercise concludes when all team members have added something to the paper.

Forced relationships

A facilitator brings up two different topics and challenges team members to map their relationships and similarities.

Five whys

A facilitator asks a team to explain why something occurs. After soliciting answers, the facilitator asks why four more times to elicit more in-depth feedback.

Gap filling

A facilitator states a problem and a goal. They ask team members to work out the process to achieve the goal.

Group sketching

Team members take turns sketching ideas about a central concept on a single sheet of paper. Afterward, they discuss those ideas and the relationships between them.

Mind mapping

This method begins with a topic written in the center of a page. Team members take turns writing themes that radiate outward, like rays from the sun. 

Team members discuss the resulting image and the relationships, associations, and valuable ideas it generates.

Teams often need to try a few brainstorming exercises to identify a viable idea or two. 

Then, the team can transform the idea into a problem statement, clearly defining who the problem is for, their current problem, and how you will solve it.


The idea screening stage takes the initial idea and fleshes it out for the next step. The product development team also begins to evaluate it for feasibility. 

Often, they'll consider questions such as:

  • Is the idea unique, or is the market saturated?

  • Is there enough potential reward to take on the risks that come with this idea?

  • If other companies are solving the problem, how can we be different?

  • How might existing and prospective customers receive this product?

Sometimes, answering these questions is enough for teams to realize that an idea isn’t viable. Even if it is, this stage may illustrate where further research is needed to validate the idea. 

Additionally, teams may realize they need to be more innovative to improve the concept, so they may use more brainstorming techniques.

At this stage, NPD teams will float the idea to trusted stakeholders for initial feedback to refine the concept further. This feedback may help a team understand the concept's viability and whether it’s worth pursuing. 

Concept development

At this stage, your idea enters the formal design phase. You develop a detailed description from feedback, including: 

  • Target market

  • Features

  • Price

  • Benefits

  • Estimated production costs

Along with product designers and engineers, you’ll develop formal engineering specifications and requirements for the product.

When you've created this blueprint for your concept, you need more testing to prove your prototype solves a problem. 

To do this, introduce your product to a small group of prospective customers. This will help you understand whether they believe the concept works and how they might receive it after launch. 

Incorporate critical feedback into improvements you can break down and document for testing. This ensures precision before development. 

Business analysis

Once you’re sure the concept is feasible from design and problem-based perspectives, you'll want to ensure that it’s viable for your business by:

  • Developing a strategic marketing analysis outlining how you plan to promote, price, and position your product

  • Conducting a financial analysis to forecast sales, estimate costs, and predict profits correlated to the marketing efforts and growth goals

These analyses should align with your financial goals and demonstrate a sustainable revenue model to support the business. 

If your business aims for annual revenue growth of 5% and the concept won't break even for four years, you’ll need to revisit how to make it financially economical for the company.

However, if both analyses align with your broader business goals, the concept can advance to the product development stage.

Product development

In the product development stage, you turn your concept into reality. 

The first step is creating a prototype on design software to illustrate the finished product's appearance. Once you have the prototype, you can use it to make the finished product and generate revenue. 

The company’s budget and time constraints will determine the kind of prototype and how extensive it will be. You should also consider why you need your prototype and who it is for.

For example, key stakeholders may need a prototype as proof of concept. In this case, you may want to create one that extensively illustrates the product's core functions. 

On the other hand, you may want user feedback to refine the product. Here, starting with a simple prototype and performing usability, feature concept, and A/B testing in user research may be the best approach. 

Prototype testing can take many forms, including:

Breadboard testing

You create a basic prototype to determine feasibility from design and engineering perspectives. You also may prototype specific components of the finished product. 

For example, if you're looking to build a trailer, you might design the hitch to ensure it's compatible with most vehicles.

Computer simulation

Using a computer-aided design (CAD) program, you can build an electronic representation of your product. Many CAD programs allow you to simulate real-world forces that may impact your prototype and test how well it handles different stressors.

Force testing

Understanding a physical product's durability is essential to the testing process. You want to understand how much force your product can take before it breaks. 

Depending on the product, you may need to disclose that information or design the product within certain tolerance limits. Even if there isn’t a legal mandate, you'll want to conduct force testing to ensure your product is as durable as possible. 

Stress testing

This is the tech equivalent of force testing. It evaluates how many users servers and processors can handle before breaking. 

Can the system handle the load if 1,000 or 10,000 users hit a button simultaneously? Or would the system break, sending users a 404 error?

Packaging testing

Some teams overlook fulfillment logistics when it comes to designing products. Ensuring your product can be shipped safely and cost-effectively in standard-size packaging is vital.

Moreover, if your product includes food, medicine, or other perishable products, design your product in compliance with applicable shipping laws and regulations in the relevant jurisdictions.

These forms of prototype testing are beneficial, but they take time and money. At the least, building a prototype and gathering stakeholder feedback is essential. You can incorporate their comments into the product and make improvements before showing it to potential users for more feedback. 

They'll likely see things you miss and provide invaluable feedback to improve your concept multiple times before production.

Once you’ve finished prototype testing, you'll manufacture a small batch of the minimum viable product (MVP) to test in the marketplace. This ensures your concept is viable before full development.

Test marketing

Test marketing involves getting feedback from prospective customers on your MVP. 

You don’t just hand a consumer the product and ask for feedback. This stage goes beyond that and includes:

  • Showing the product in its packaging

  • Informing participants of the price

  • Getting their opinion on marketing copy 

  • Clearly communicating the value propositions

  • Asking for feedback on the product, its positioning, price, and packaging.

NPD is about managing and mitigating the risks of developing a new product. Many new products fail to resonate with consumers because of unappealing messaging or pricing.

That’s why you test the marketing alongside the product to determine whether you need to improve your approach. You can also use this feedback to validate or reassess consumer demand and ensure you have the resources to meet it.


You're ready to prepare for launch when you've gathered sufficient feedback and made any necessary changes. The formal launch may include press and promotional events. 

At this stage, you’ll decide what a formal launch looks like and create goals to measure success. You’ll also be: 

  • Preparing a multi-channel marketing strategy

  • Soliciting pre-orders

  • Getting sales, marketing, and customer service teams training 

  • Developing a product-led growth strategy to scale rapidly

Pre-launch involves countless adjustments to ensure your product makes the right first impression. Once you've set a formal launch date, it's essential to stick to it. It’s easy to fixate on soliciting feedback, but most feedback can be saved for later at this point. 

Once the product is out in the world, monitoring performance is critical. You can evaluate whether you achieved your launch goals using press coverage, consumer sentiment, and financial data. 

If the product's success metrics are underwhelming, insights into that data can help you make the adjustments necessary to improve its performance. 

Tips for creating a new product development plan

Creating a working NPD plan is tricky. New products take a lot of time and effort. 

Product development involves intense collaboration across departments and strategic business units. Organizational dynamics and task conflicts may come into play if several projects are running.

NPD plans are also deadline-driven. Senior leaders may set a deadline to bring a product to market. Aside from the set date, they’ll likely set multiple internal deadlines, which may be crucial. 

Several moving parts can result in a failed launch. On the other side, companies worldwide successfully launch new products every day. To maximize your chance of a successful product launch, keep these tips in mind:

Team alignment 

Developing a successful product from concept to launch requires many stakeholders across various parts of the process. 

If some team members understand the product, marketing, strategy, or their role differently, you may face delays, mistakes, and wasted resources. 

Ensure team members are on the same page by maintaining solid communication throughout the process.

Center your customers' needs

Building products that resonate with customers is significantly easier when you design with your customers' needs, challenges, and pain points in mind. 

NPD demands constant feedback. Use finite resources strategically to maximize the feedback quality from prospective users and customers at every stage of the process. 

The next step is to analyze feedback and alter the prototype to fit user needs.

Build and lead a strong team

Ensure your NPD team has the necessary internal skills to execute the launch goals. Seek professionals who bring creativity, curiosity, humor, and empathy under pressure and tight deadlines. 

NPD can be intense, and disagreements about aspects of the product or process can emerge, so the right mindset is critical. Recruit people who can handle workplace disagreements respectfully and gracefully. 

Set the tone by: 

  • Offering clear direction and communication

  • Listening with empathy to your team members

  • Providing support in a collaborative, cooperative environment

Common NPD mistakes businesses make

Given the time, resources, and risk of engaging in NPD, it's important to get it right and set appropriate goals. 

That said, businesses make common mistakes that can quickly jeopardize the entire effort.

This often starts with conducting limited research in the early stages. Some developers get enamored with an idea and skip due diligence. They miss out on discovering whether the idea is unique and the best solution. 

Some teams don't conduct thorough analyses. It’s vital to determine whether the product is financially viable and the marketing efforts necessary to achieve revenue projections.

Another common mistake is soliciting too little feedback. Sometimes, teams gather limited feedback due to a lack of resources or looming deadlines. 

Some teams skip or limit testing, so they may miss critical improvements, weakening the product's potential.

Other businesses assemble the wrong teams, with misaligned skills and weak leaders. 

This can cause:

  • A lack of direction

  • Inconsistent communication

  • Personality-based conflicts

  • Serious delays and cost issues

These issues can lead to a lackluster product that underperforms or doesn’t launch at all.

How long does it take to get a new product to market?

The time it takes to bring a new product to market varies greatly and depends on many factors, including product complexity, budget, and company size. 

Naturally, you'd expect it to take longer to launch a new piece of undersea drilling equipment than a new line of T-shirts. 

Even if you compare the same products, the time-to-launch period will also vary based on: 

  • The amount of resources each company can dedicate to the process

  • Competing priorities

  • Experience launching new products

  • External economic factors

Many products take six months to two years or longer to market.

Learn more about product feedback analysis software


What is the main goal of new product development?

New product development aims to create and launch a new product aligned with a business's brand and financial goals. The goal is to maximize potential profit while minimizing risk by solving a problem unique to the marketplace.

What are the four types of new product development?

Typically, new products are launched in the following categories: 

  • New to the market

  • New to the business

  • An improvement of an existing product 

  • An extension of an existing product

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