The New Product Development Process (Part 2)

Concept Feasibility – developing a winning product value proposition

At this point in the new product development process you have completed the first 2 stages (refer to my earlier post this month)

1. Strategy Development – to research customers and define the opportunity

2. Ideation – the generation of new ideas for the next breakthrough product or service

The next stage is to turn your ideas into full product concepts. Start by creating a 1 page product concept document for each idea that outlines the following;

• Describe the value the new product will deliver to the consumer. These will be the main product proof-points – Convenience, Reliability, Prestige, Safety, Environmentally Friendly, Relaxing, Quality, etc.
• Explain how the product works and the consumer need that it satisfies
• Detail the functional and emotional benefits of the product
• Choose 1-3 of the strongest proof-points associated with the product idea and expand on them to develop a value statement that describes your unique selling proposition (USP)

The most successful product concepts should effectively build on the economic strength of your existing business model, leverage assets you already have such as technology, service and branding, or expand the core business to target profitable new customer segments.

At this time your should engage with your Design, Manufacturing, Outsourcing or IT teams to conduct a detailed capability assessment of your systems, technology, partners and suppliers. Produce a product blueprint or technical specifications document with production processes, user processes, customer service linkages and any outsourced partner contracts.

You've developed a strategy in Stage 1 but now you need to create an action plan to commercialize the product – including an integrated marketing communications plan, operational plan, online and customer service experience – adding timelines and a roadmap to market.

• Make sure you clearly define the target segment for the product and market positioning. I recommend using a market map to plot your USP and that of your competitors, plus outline where this new product will live in your existing product line hierarchy. Because if you’re unclear you could cannibalize existing product sales and confuse your salespeople or customers.

• Develop a full business set of product financials to estimate cash flows and return on investment (ROI). Moreover run sensitivity analysis to factor in changing customer behaviors, competitive and macroeconomic conditions to stress test your financials.

Further consumer research using focus groups may be required to test the final concepts, product positioning or a prototype. Additionally, online consumer panels are a great way to get the data you need to support conjoint analysis for assessing product benefits, product positioning and pricing.

If the estimated financials meet your company ROI benchmarks then present your plan to secure commitment, investment and resources from your investors or senior management to build, test and eventually rollout your winning product.