New product development
There are many benefits to developing and introducing new products into your business, but you will need to understand how to do it successfully.
Benefits of new product development include:
- growth and expansion opportunities for your business
- keeping ahead of competitors
- reinventing or refreshing your business
- moving and changing with trends.
You'll need to follow processes for analysing your ideas, developing prototypes and launching your new product to the market to ensure your product is commercialised correctly.
Product development strategy
It's essential to understanding the needs and wants of the market to avoid spending time and money on developing a new product that may not suit your customers.
A product development strategy is a plan that includes:
- details of your new product concept
- timeframes, from conception to implementation
- market and customer needs
- barriers in the development
- product testing
- implementation plans and processes.
Documenting your strategy will help identify any risks for the product and your business.
Generating ideas and concepts for new products
Dedicate time to generate and test ideas, because rushing product development could result in costly risks.
New product ideas can be generated through:
- identifying gaps and trends in the market
- analysing and researching customer needs, and reviewing feedback and complaints
- researching your competitors
- brainstorming with staff, business advisers and suppliers
- attending product and innovation expos
- doing a SWOT analysis.
Brainstorm using SCAMPER
The SCAMPER model is a good place to start your brainstorming process. SCAMPER stands for:
- Substitute—find an element of your concept to replace with an alternative and see if it makes an improvement
- Combine—assemble separate concepts to determine if they work better as a whole
- Adapt—make an adjustment to a concept that was already evaluated and found unsuitable
- Modify—alter a proven product or idea to see if it results in any observations of value
- Put to another use—if a concept is evaluated as unsuitable, try using it for another purpose
- Eliminate—remove an element from the concept to see if it results in any benefits or insights
- Reverse—change the order of steps in a process and observe the results to find any value.
Evaluate your idea
Create a list of your ideas and analyse each part of them by asking these questions. This will help conceptualise ideas or eliminate ideas that may not suit your business.
- Is the idea technically feasible?
- Do you have the capacity and knowledge to develop the idea?
- Is the idea profitable?
- Does it fill a gap in the market?
- What are the costs to develop the product?
- What resources are required to develop the product?
- What legal or intellectual property aspects need to be considered?
- Does it meet the needs of your target market?
- Is it in line with your current business offerings and branding?
- Will there be any licensing costs?
Idea to concept
After choosing the best idea to develop, you will enter the concept stage. This involves all aspects of the product creation and implementation.
Along with the questions above, in the concept stage you will also need to:
- complete an accurate costing of the product and logistics
- identify the look and feel of the product and packaging
- refine the research of your target markets and competitors
- establish an implementation overview plan.
Learn more about:
Business analysis of new products
Complete an analysis on any new product to determine the upfront and ongoing costs and potential profits. It can also help avoid or reduce unnecessary costs.
Use the checklist below to analyse your product.
What price do you want to sell your product for?
Read about pricing products and services.
- Are your competitors currently selling the product or a similar one?
- If so, what is their price point?
What is the amount of product you need to sell to cover your business costs (rent, utilities, wages)?
Read about break-even and profit.
How many products will you sell based on your research?
Read about sales management and planning.
How long will it take until you see a return on your investment?
Learn about managing financial risk.
Will the product go off-trend or out of season?
Read how to plan and conduct market and customer research.
Assessing the feasibility of a product and protecting your intellectual property
Completing the business analysis will give you a clearer insight into the feasibility of your new product.
You will also need to consider intellectual property—make sure you register patents and protect your intellectual property before creating your product.
A non-disclosure agreement will help protect sensitive information about your new product—use the IP contract generator at IP Australia to develop this agreement
New product prototypes and market testing
Prototyping is creating the product 'master' or draft of the product you want to sell—this is where your idea comes to life.
Take your time to ensure you get your product right. You may go through a few rounds of prototype testing until you are satisfied that it suits your needs and expectations.
Follow these stages to test the market and your prototype.
- Project plan—Create a project plan to manage the time, financial investment, development and marketing of your product.
- Consult experts—Talk to specialists who have skills outside your expertise (e.g. graphic designers, quality control consultants, manufacturers).
- Develop a design brief—Create a brief outlining the specification of the product, packaging and its key features.
- Develop a prototype—Create a mock-up of your product, including packaging and branding. This will give you an actual product to test to determine its effectiveness and identify any flaws.
- Product trials—Conduct testing with the minimum viable product (MVP), making sure to have built in enough of its intended features to attract attention without taking on the expenses of extensive development. Test the product within your own business and with market research focus groups, staff and industry.
- Feedback—Gather feedback from your product trials and make changes and improvements to resolve identified issues.
- Marketing—Develop your marketing strategy and marketing plan before the launch of the product.
- Distribution plan—identify potential distributors and plan your distribution model.
Launching and commercialising new products
A product launch can be vital to its success, so you should have strategies in place prior to launch.
Use this checklist to ensure you have everything ready for launch.
- Last reviewed: 8 Dec 2022
- Last updated: 8 Dec 2022