There are many benefits to developing and introducing new products into your business, but you will need to understand how to do it successfully. Show
Benefits of new product development include:
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. On this pageProduct development strategyIt'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:
Documenting your strategy will help identify any risks for the product and your business. Generating ideas and concepts for new productsDedicate time to generate and test ideas, because rushing product development could result in costly risks. New product ideas can be generated through:
Brainstorm using SCAMPERThe SCAMPER model is a good place to start your brainstorming process. SCAMPER stands for:
Evaluate your ideaCreate 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.
Idea to conceptAfter 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:
Learn more about:
Business analysis of new productsComplete 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. Break-even 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. Return on investment: How long will it take until you see a return on your investment? Learn about managing financial risk. Logistics: Could there be any importing or exporting issues? Find out about the basics of importing and exporting. Assessing the feasibility of a product and protecting your intellectual propertyCompleting the business analysis will give you a clearer insight into the feasibility of your new product. When starting a business, researching business ideas and investigating feasibility are part of the process, and the same analysis needs to be done for any new products you are introducing. 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 testingPrototyping 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.
Launching and commercialising new productsA 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. Contract arrangements made with distributors Production and logistics in place Quality assurance measures in place Stock levels and supply capacity established Selling price and net profit understood and finalised Marketing and public relations strategy created Marketing plan created Advertising plan created Marketing and social media campaigns prepared Sales targets set Staff sales training completed Staff product training completed
What is the most frequent source of new ideas for a business?The entrepreneur's own “research and development” is the largest source of new ideas.
Which of the following is the most important reason for business to exist?Because a business cannot exist outside of society and must satisfy a specific need in order to stay in business, it has to create or add additional value to the community or individuals. That's why the real purpose of a business is to create customers.
Which type of strategy requires a firm to be the lowest cost producer within the market?A cost leadership. strategy requires that a firm be in the position of being the lowest cost producer in its competitive environment. By being the lowest cost producer, a firm has several strategic options open to it. It can sell its product or service at a lower price than its competitors.
Which section of the marketing plan describes how the business owner will create customer awareness and motivation to buy the product or service?Which section of the marketing plan should describe the entrepreneur's approach to creating customer awareness of the product or service and explain why customers will be motivated to buy? primary data.
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