Define your product

An accurate description of the product you are planning will help keep you and your team focused
and avoids NPD pitfalls such as developing too many products at once, or running out of resources
to develop the product.

Identify market needs

Successful NPD requires a thorough knowledge of your target market and its needs and wants. A
targeted, strategic and purposeful approach to NPD will ensure your products fit your market. Ask
yourself:

What is the target market for the product I am proposing?

What does that market need?

What is the benefit of my proposed new product?

What are the market's frustrations of existing products of its type?

How will the product fit into the current market?

What sets this product apart from its competition?

Draw on your existing market research. You may need to undertake additional research to test your
new product proposal with your customers. For example, you could set up focus groups or a
customer survey.

Establish time frames

You need to allow adequate time to develop and implement your new products. Your objectives for
developing new products will inform your time frames and your deadlines for implementation. Be
thoughtful and realistic. Some objectives might overlap but others will be mutually exclusive.

Your objective to race against your competition will require efficiency from your team.

Your aim to achieve a specific launch date will be influenced by demand for seasonal
products and calendar events.

Your aim to be responsive to your customers' needs and demands will require time for
research to ensure you develop the right products at the right time.

Your objective to stick to business as usual and maintain other schedules will affect the
resources you make available for NPD.

Identify key issues and approaches

There are many tasks involved in developing a product that is appropriate for your customers. The
nature of your business and your idea will determine how many of these steps you need to take. You
may be able to skip or duplicate certain stages, or start some of them simultaneously. Key tasks
include:

generating and screening ideas

developing and screening concepts

testing concepts

analysing market and business strategy

developing and market testing products

implementing and commercialising products.

Successful new product development (NPD) starts with identifying good product ideas and using
reliable criteria to decide which ideas to pursue.
You should take the following steps before you allocate funds to new product development.

Idea generation
Write a customer needs list based on the information you gather from the sources identified below.
You should try to identify existing weaknesses in your products, gaps in your product range and
areas for product improvement.

Brainstorm product issues

Work with your existing team members to brainstorm product issues. Your sales and service staff
speak to your customers daily, hearing feedback about your products and the customers' needs.
Capture the feedback, product observations and ideas from your team. Make sure you recognise
their ideas and promote a shared culture of innovation.

Use your research and development (R&D) processes

Use your business's existing R&D processes. Identify modifications you could make to existing
products, or adaptations for new products, consistent with feedback from your market and
customers.

Review your quality assurance (QA) processes

Note any issues in your products and identify potential ideas for addressing gaps in quality.

Review your customer complaint records

Identify common weaknesses in your existing product range, and look for areas where improvement
is most needed. Learn about managing customer complaints.

Review your research

Review your customer research and market research, and plan further market and customer surveys
if you identify research gaps. What are your customers telling you they're looking for? What do they
find frustrating or limiting about your products? How do they use your products most?

Talk to your suppliers and other business partners

Talk to manufacturers, retailers and sales reps to capture their knowledge of your products and
thoughts for improving them.

Research and understand your competition

Try to understand your competition. Review your competitors' product range and consider how the
market is responding to them. Do any of their products seem to be meeting needs that yours aren't?

Study catalogues and product information

Make sure you have a comprehensive understanding of existing products available in your market.

Idea screening
With your list of potential new product ideas, you now need to decide which ideas to pursue and
which to discard. Consider your competition, your existing products, their shortcomings, and the
needs of your market. Draw on the customer needs list you have developed, and the areas for
product improvement you have identified.
Develop a set of criteria to evaluate your ideas against. You criteria might include:

most prominently identified customer needs

product improvements most needed

the benefits to your target market

the technical feasibility of the idea

the level and scope of research and development required

The profitability of the idea. What is its potential appeal to the market? How would you price
it? What are the costs in bringing it to market - overall and per unit?

Where the product fits in the market. Is there a gap? How close is it to competitor products?

the resources it will require in development

the marketing potential of the idea

the fit with your business profile and business objectives.

SWOT analysis
A SWOT analysis can help you to identify the strengths and weaknesses of each idea.
Carefully plan the steps involved in testing your new product development (NPD) ideas. For every 7
new product ideas developed, 1 becomes successful. Defining your new product concept and testing
it with your market will help you determine whether your new product idea will be a success.
The concept development and testing stage of NPD can be time-intensive, but it will help you avoid
unnecessary costs later by ensuring you pursue the best new product concept in your market.

Create a product concept

A product concept is a detailed description of an idea, which you describe from the perspective of
your customer. Taking your customers' viewpoint when describing your product concept will help you
test and evaluate how responsive your market will be to your product.

Do your sums carefully

Make sure your idea can be designed, manufactured and delivered within your financial, resource
and time constraints

Talk to the people who will buy it

Take your idea to your target audience to determine what they think and where any gaps might
lie. Market researchers can help you run focus groups and surveys to determine how customers will
respond to your product.

Refine your target market

Detail your customer targets as accurately as you can. Your focus groups or conversations with your
target audiences will help you determine whether you're targeting the right market segments.

Examine intellectual property (IP) issues

Find out whether another business or individual has already patented your idea by searching for a
patent.
If your idea was the combined result of several members of your team, consider how you will
recognize their contributions to the intellectual property when you protect your idea.

Identify the features

Based on the information you have gathered to date, list the features and benefits of your proposed
product from highest market importance to least.

Take your time

Define your product concept clearly, test it with your audience and don't make any assumptions.
Many NPD ventures fail because businesses rush through concept development and testing.
A new product idea that survives the screening stage of new product development (NPD) requires a
more sophisticated and detailed business analysis. A business analysis will help you determine the

costs involved in your proposed NPD, and forecast the profits you may make from the product in
future financial years. The costs of developing a product are substantial.
Your business analysis will also help you eliminate inappropriate ideas and avoid unnecessary costs.
Carry out the following steps to assess the viability of your new product.

Estimate your product price

Review your market and competitor research and your feedback from customers to determine
theselling price of your product, and the profit you are likely to make.

Identify your product's market potential

Review your market research and the sales performance of existing products in your range. Use
your recent sales figures and industry sales figures to help you identify the current level of market
activity and interest in products in the same line as your new product.

Forecast your sales volume

Estimate the volume of the product sales you anticipate based on your research into customer
needs, the size of your existing customer base and your market.

Identify your break-even point

Estimate the profitability of your product, and determine your break-even point - the amount of
product you need to sell to cover your fixed costs (such as rent, electricity and wages).

Determine your minimum sale price

Project your returns based on your anticipated discounted product price to identify your lowest sales
figure per item.

Consider the long term

Forecast the lifespan of your product in the market. How long will it be relevant to your market's
consumers? How long will it take you to realize a decent return on your investment? What market
share percentage does it have the potential to realize?

Scope your marketing strategy

Your marketing strategy will help you determine how to position your new product in the
marketplace. The information you gather, next, in your market testing will help you identify which

market segments to target and how. At this stage, however, you can use the data you have gathered
in your business and market research to start shaping your marketing strategy - identifying relevant
market and product information as well as approaches that will be important in your product
marketing.
Prototype testing is one of the most rewarding phases of new product development (NPD).
Developing a prototype of your product allows you to bring your product to life for the first time and
test it in its market. Your investment in market testing your prototype will help you prepare your
product for market entry.
It is important to be careful and considered in this exciting stage of NPD. Take your time and invest
in the human resources and expertise you need to perfect your new product.

Put someone in charge

Assign a member of your team (if not you) with strong project management skills to manage or
coordinate the product development and delivery process. Ask your product development manager
to maintain a practical, informative schedule and project plan that details the steps involved in
developing your prototype and running your market testing.

Consult the experts

Product development specialists can help you streamline your process and avoid costly mistakes.
Consider commissioning consultants who specialise in product engineering and design - for
example, graphic or industrial designers, product engineers, product quality consultants, computeraided design (CAD) specialists.

Protect your intellectual property (IP)

Make sure your patents are in place and your IP is protected before you take your product out for a
test run.

Commission a prototype of your product

A product mock-up will help you determine how to package, brand and market your new product. It
will also help you test the look and feel of the product in sample segments of your market.

Test the product in action

Put your prototype into use in the type of situations it's required in. Identify the characteristics that
are most important to your customers and test those attributes, repeatedly.

Run focus groups

Enlist the help of a market researcher to facilitate a focus group that will help you gauge the
response of your sample target market. Interview your customers and take your prototype to as
many informed people as possible.

Make improvements
You may need to improve your product based on feedback. Use this opportunity to make changes
that will increase your product's chances of success. Retest the product within more specific
conditions that help you evaluate your changes - for example, by conducting a further focus group
with a market segment that your product changes will affect most.

Test it in your industry

Attend industry events and trade or consumer expos to get feedback on your prototype. Take the
opportunity to generate market interest and capture details of interested customers who want to hear
about your product launch or even place advance orders. Consider whether you need to prepare an
initial run at this stage to test customer acceptance more broadly.

Develop a marketing strategy

Your marketing strategy will help you accurately segment and target the right market for your
product, set clear marketing objectives, and develop marketing strategies and tactics for your market
segments. Start by reviewing all the information you have gathered in your business and market
analysis and market testing. Learn how to develop a marketing strategy.

Develop a marketing plan

Your marketing plan will help you organize and implement the marketing tactics for your new
product, plan your sales and product marketing activities, and reach your sales targets.
Introducing a new product into the market is a significant business achievement. Launching your
new product is your final, important step in the new product development (NPD) process. Deciding
when, how and where to launch your product will determine its early impact on the market.
Your marketing strategy and marketing plan will direct your product launch and help you make the
most of your business and product exposure opportunities. Consider including some or all of these
approaches in your new-product marketing:

Develop a direct marketing campaign

Direct marketing methods such as direct mail, email marketing and social media marketing can help
you get straight to the customers in your target market.

Create your advertising plan

Plan and book your advertising well ahead. Analyse where your target market customers get their
product information. Book advertising in industry print and online publications and consider product
innovation publications.

Create communications materials

To support your launch you can create a product brochure and point of sale posters to draw attention
to the new product.

Develop a public relations and news media strategy

Use public relations (PR) to your advantage. Mainstream media often pick up innovation stories.
Launch a print and online news media campaign and target interested industry journalists.

Develop a sales plan

Develop a sales plan tailored to your new product. Sales planning helps you define strategies for
your ideal customers and set realistic, healthy sales targets.

Develop a pricing strategy

Your pricing strategy should identify an entry-to-market price, a premium price and a minimum sale
price.

Contact your distributors

Give your distributors plenty of forward notice of your new product launch. Use your forecasts to
calculate the product numbers you'll need to meet your anticipated sales volume.

Get professional advice

A number of public and private sector organizations provide support to businesses investing in
innovation, commercialization and NPD:

The Australian Institute for Commercialization helps researchers, entrepreneurs and

innovative companies convert ideas into successful commercial ventures.
The Skills and Knowledge Program is an initiative that helps entrepreneurs who know their
idea has commercial potential but don't know how to achieve it. The program aims to convert
ideas into successful commercial ventures.
The Australian Government's Single Business Service offers funding and networking
assistance to Australian businesses.
AusInnovation runs the Australian Innovation Festival and provides resources and advice to
support Australian innovation and entrepreneurship.

Turning an Idea into a Business

1. Figure out what problem is being solved
When you strip a company down to its core function, youll find that it solves a
problem. Right now, youre probably infatuated with your idea and are focused on
the solution it provides. Many businesses claim to have solutions, but what specific
problem are they really eliminating?
Amazon, for instance, solved how e-commerce was, at one time, expensive and
inconvenient. Today, it has more customers (and sales) than its brick-and-mortar
competition.
Bottom line: all successful companies, products, or services enhance the lives of
their customers by eliminating a problem.
2. Find your market
Picture who your ideal user is this is the first step to actually figuring out where
your idea fits into a sea of consumers. They all have different habits and needs to
fulfill, yet are facing the same problem. Figure out where your solution will fit into
the market and in the lives of people.
When I had the inspiration to start my company, I did my research and with some
consideration chose Los Angeles as the best market that needed the services I was
providing through Ciplex.
One of the biggest mistakes startups make is the failure to get people to understand
and want the product or service. If it turns out that your idea isnt being sold to
your audience, dont blame the market. Instead, figure out what they find
compelling, or what it will take to get them to want something different than what
they already have
You have a solution, but it needs to be in front of the right people to be seen as
such.
3. Find your support
Have you ever noticed how few successful startups were founded by just one
person?
This question was raised by Paul Graham, co-founder of the startup incubator Y
Combinator, when he was addressing mistakes startups make that ultimately lead
to failure.
Having business partners has several benefits, especially when youre first starting
out. They can act as support, a sounding board for your ideas, and provide evidence

to others that you actually have a good idea. Aside from building a team, having
relationships with other entrepreneurs will give you invaluable knowledge. Find
seasoned entrepreneurs and spark conversations with them. Pick their brains
people love to talk about themselves, so theyll be happy to share what they have
learned from their experience with starting a business.

4. Create a financial model and plan the first phase

Since you have your market research done, now you must figure out if its
financially viable. Create a bottom-up financial model that focuses on how your
product or service is created, marketed, and sold to an individual user. Doing this
will give you more insight on how your business will function. Then, to verify your
projections, create another financial model that is top-down, which examines the
size of your market and what goals you need to reach to turn a profit.
Once youre satisfied with your financial model, begin moving into planning the first
phase of your business. This plan is simple get your ideas out. For discussion
purposes among your team and mentors, map out your mission, objective, keys to
success, target market, competitive advantage, and basic strategies. It ensures that
everyone involved is on the same page and set to proceed into the next stages.
5. Figure out your source of capital
Entrepreneurs generally dont start out just for the money, but money is still needed
to get the business off the ground. Some attainable sources of funding are selffunding, money from people you know (friends and family), credit cards, or loans.
Depending on the amount you need, a more helpful source can be angel investors
and venture capitalists looking to back your mission for a slice of the profits and
room for decision-making.
Whatever source(s) you choose to obtain or to aim for, consider that each one has
their own rewards and risks.
6. Build the MVP
The MVP, or minimal viable product, provides you with the feedback you need
before putting your idea on the market. After all, its of no use to anyone if you build
a product customers dont want.
Minimal does not necessarily mean basic. The point is not to build a minimal
product, but a product that is already great (viable), yet has room to improve
(minimal). Its how early adopters actually jump on board to use the product and, if
they like it, will provide you the feedback to make it better for them.

7. Find the pivot

The information gathered from your early adopters helps you figure out what works
and what garnered the most response from your audience. You might find that their
feedback is entirely different than what you expected and planned for.
This can lead you to pivot your business model, or change a fundamental part of
it. Changing direction doesnt mean you failed entirely; it actually helps to prevent
failures you may have encountered. Pivoting doesnt necessarily mean abandoning
everything you learned its about taking what you learned and using it for your
new direction. You took one route to a destination and got lost; pivoting is just
recalculating a different route to get there.

8. Stay positive
They say misery loves company just make sure there is no misery involved with
your new business. Self-doubt and questioning if something will go wrong will only
hold you back from taking the necessary risks. People will question your ideas and
your business, but if they dont believe in your ability to overcome it, they are
perpetuating their negativity into you. When you stay above the negativity and stay
positive, it will make it easier when you eventually do make a mistake or face an
obstacle. And you will face both.
Your journey to building a sustainable business wont be like most processes, simply
because there is no guarantee for success. All you can do is adapt your idea and
see what works. If at first you dont succeed with it, try and try again until you do.