New Product Development (NPD) Process: 7 Key Stages

Bringing a new product to life can be challenging, especially when the market is swamped with a ton and variety of products.
You know that you have an idea that can bring value to a target market, but you’re unsure how to bring your product to that market. This process can become particularly challenging if you’ve never done it before because you might not even know where to start.

In order for a company or an entrepreneur to successfully launch a product into the market, several obstacles need to be overcome and there must be a comprehensive understanding of the market, consumers, and competition to ensure that the product should be able to solve the problem of the end-user.

To bring your ideas to life, thankfully a blueprint strategy exists in product development- a strategy that will assist you in bringing your ideas to life.

This blog will walk you through the fundamentals of the new product development process and the steps you can take to plan your product development journey.

What is the New Product Development Process?


New product development (NPD) is the process of introducing a new product to the market. Due to shifting consumer preferences, increasing competition, technological advancements, or the need to capitalise on a new opportunity, your business may need to engage in this process.

Innovative businesses succeed by understanding what the market wants, making clever product improvements, and creating new products that meet and surpass their customers’ expectations.

Now ‘new products’ could be:

  • products that others have introduced to the market but that your company has never made or sold before
  • product innovations created and brought to the market for the first time. They may be completely original products or previously released products that you have modified and improved

The goal of the NPD process is to humanize technology in order to meet the needs of end users. The results of effective product development are:

  • Creating new business prospects and expanding existing businesses
  • Increasing profitability and productivity
  • Enhancing customer satisfaction

Mind you, the terms “product development” and “new product development” are not interchangeable. While Product Development focuses on introducing products that already have a Proof of Concept (POC), New Product Development focuses on completely new concepts.

To assure a start-to-finish process for new product development, choosing the appropriate process flow is crucial. The two most popular product development frameworks are:

  • Design Thinking Approach: In this framework, you begin with understanding the users and their problems before identifying the potential solutions for the user group. This framework concludes with the development of a prototype and market testing of the solution to determine its market fit
  • New Product Development Framework: In this more conventional method, you start with your product ideas and validate them in the market to see if they fit. After it has been validated, you build a prototype, plan your entire production and post-production, and work on the costing before actual development.

Why do businesses need a New Product Development process?


A new product development process helps you test the new product’s marketability and customer utility. Because so many different processes must be coordinated, (everything from public relations and marketing to engineering and design) the NPD process is critical for businesses.

Here are some ways in which a thoroughly defined NPD process can help you:

  • Provide valuable features
  • Better quality
  • Greater control on development
  • Foolproof your idea
  • Lower cost significantly

7 Stages of Product Development Process:


It is important to understand that there isn’t a single, universal method for the product development process, and it differs by industry, it can essentially be broken down into seven stages: idea generation, research, planning, prototyping, testing, product development, and commercialization.

  1. Idea Generation:The first stage in the product development process is idea generation. In this stage, the company comes up with many distinctive ideas based on both internal and external sources. Internal idea sources typically refer to the company’s internal R&D teams, but external sources refer to competitor innovations, customer demands, distributors, and suppliers, and so on. As a result, the company focuses on coming up with as many feasible ideas as possible.
  2. Research:At this point, there are two vital things to look into: First and foremost, is there a demand for the service or product? Are there many people seeking a solution to the problem that your product solves? Do you perceive a gap that must be filled? Second, are there any similar products to yours already available on the market? If this is the case, it doesn’t necessarily mean that your idea won’t succeed; nevertheless, how will you improve on what is already available in the market?
  3. Planning: Planning is the third stage, where you develop a final product idea based on your initial idea and research and start making your plans to make it a reality. When you define your final product, you should begin planning for what you’ll need in order to create it.
    Planning also involves coming up with a marketing strategy that will help you in effectively promoting your finished product, as well as pricing models that are reasonable for your product, and that your customers will pay.
    Identification of the teams involved in the process of developing and launching your product is equally crucial.
  4. Prototyping: The prototyping phase is when you develop a sample product that serves as a mock-up of what will be created during mass production. A minimal viable product (MVP), also known as a prototype, is a simplified version of your tool, still similar to your final product, which will help you get a sense of how it functions and pinpoint any areas that need improvements. Before you have a finished prototype, you might create several prototypes and switch back and forth between this step and the testing stage.
  5. Testing: You must test your product before you market it to ensure it meets the needs of your target market and functions as promised. So, during this stage, you’ll share your prototypes with target audiences and ask for actionable feedback on how the product functions. Essentially, you want to use your product in scenarios that are comparable to real-world use cases so you can determine exactly what works and what doesn’t.
    Sometimes you may need to go back and modify your prototype depending on the findings of your testing, as mentioned above. Once you feel as though your prototype is finished and ready to solve your customer needs, you’ll begin product development.
  6. Product Development: This is the action that follows a company’s management declaring a product concept to be in line with the company’s goals, and giving the go-ahead for development. The company’s R&D wing then spends many months, and in some cases years, developing the product concept in order to create a working, functional prototype.
  7. Commercialization:The final step of your NPD process is commercialization, in which the product is finally introduced into the market. This is the result of your brainstorming, research, and iteration, where your audiences can finally make use of what you created. This stage often leads to massive costs in terms of initial infrastructural investments as well as sales promotions and advertisements.


Although this is the final stage, many businesses launch their products and then come back later to make improvements to their products based on customer feedback and market changes to ensure they’re always providing the greatest possible customer experience.

Some questions to keep in mind that can help you in determining the right price, proper selling strategy, and the different ways to launch your product:

  • What is the unique value proposition (UVP) of the product that sets you apart?
  • How have you positioned your product? Is it intended for a niche market or for a larger audience?
  • What is the marketing strategy you have determined for the product? Are you planning to introduce product bundles or promote cross-selling?
  • Where will you be selling the product? Via offline mode only or via offline and online mode? Your strategy needs to identify the distribution channel and its associated setup costs.