New Product Development:

A product can be considered new under the following situations:-

 New-to-the-world products
 New product lines
 Additions to existing product lines
 Improvements and revisions of existing products
 Repositioning
 Cost reductions

Stages Of New Product Development

Before the introduction of a product into the market, it goes through several stages of
development. These stages are known as stages of new product development. It includes the

following:

Idea Generation:

Companies seek new ideas to enhance the performance of the existing products and to
innovate new ideas. This stage is called idea generation stage. There are many sources for
idea generation. It may be from customers, dealers etc.

Employees throughout the company can also be a source of idea. Toyota claims that its
employees submit two million ideas annually over 85% of which are implemented.

Companies also find good ideas by researching competitor’s products and services. They can
find out what the customers like or dislike about their competitor’s products. Ideas can also
come from investors. External research, surveys industrial publications research and
development etc.

But the main source of idea generation is the customers by their grievances and complains
and feedback. However, although ideas can flow from many sources, it is not feasible to
implement all the ideas generated due to lack of time and capital.