New Product Ideas

New product ideas can generate from existing frustrations using a certain product, or a desire to do something better or more simply.

Learning Objective

Explain the front-end process of new product development (NPD) and the characteristics of a SWOT analysis

Key Points

Most new product ideas come from experiences, like frustrations with an existing product.
There are two parallel paths involved in the NPD process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis.
Lots of ideas are generated about the new product. Out of these ideas many are implemented. The ideas are generated in many forms. There are many factors responsible for generation of an idea.

Terms

life cycle
The useful life of a product or system; the developmental history of an individual or group in society.
SWOT Analysis
a structured planning method used to evaluate the strengths, weaknesses, opportunities, and threats involved in a project or in a business venture
product life cycle
the stages that a good or service goes through from when it is first introduced to when it is taken off the market

Example

Airbnb.com, which has been wildly successful, started when their founders needed to generate $100 in order to pay their rent. A conference in a nearby town prompted them to rent out air mattresses in their apartment. They realized might have a good business idea.

Full Text

In business and engineering, new product development (NPD) is the complete process of bringing a new product to market. A product is a set of benefits offered for exchange. It can be tangible (something physical you can touch) or intangible (like a service, experience, or belief). There are two parallel paths involved in the NPD process: idea generation, including product design and detail engineering; and market research and marketing analysis. Companies typically see new product development as the first stage in generating and commercializing a new product within the overall strategic process of product life cycle management, used to maintain or grow their market share.

Ideas for new products can be obtained from basic research using SWOT analysis: Strengths, Weaknesses, Opportunities & Threats. Many methods may be used to gain insight into new product lines or product features, including:

SWOT Analysis

Here is an example of the SWOT analysis matrix.

Market and consumer trends
Research and development
Competitors
Focus groups and trade shows
Employees and corporate spies
Salespeople
Ethnographic discovery methods (searching for user patterns and habits)

Five Different Front-End Elements

Opportunity identification: Large or incremental business and technological chances are identified in a relatively structured way. Using the guidelines established here, resources are allocated to new projects, leading to a structured New Product & Process Development or NPPD strategy.
Opportunity analysis: This element translates identified opportunities into implications for the business and technology specific context of the company. This element focuses on aligning ideas to target customer groups, and can include market studies and/or technical trials and research.
Idea genesis: The evolutionary and iterative process of progressing an initial idea from birth to maturation into a tangible idea. This process can occur internally or externally (e.g., a supplier offering a new material or technology, or a customer presenting an unusual request.
Idea selection: The decision to pursue an idea is determined by analyzing its potential business value.
Concept and technology development: During this part of the front-end, the business case is developed based on estimates of the total available market, customer needs, investment requirements, competition analysis and project uncertainty. Some organizations consider this the first stage of the NPPD process

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