How Companies Develop New Products: The New Product Development Process — Transcript

Full transcript

1. 0:00Hey there fellow marketers, Professor Wolters here.
2. 0:02And today what we're going to talk about is how companies
3. 0:05develop new products.
4. 0:07Like what's kind of the overall process they go
5. 0:10through step-by-step in order to go from, you know, an idea
6. 0:14of a concept of a phone to actually having that phone
7. 0:16out in the market, okay?
8. 0:18And obviously with any new product, where do we start?
9. 0:21We start with idea generation.
10. 0:23We've got to come up with ideas for new products and those ideas
11. 0:26can come from all over the place it could be from, oh, we see
12. 0:29something our competition does.
13. 0:30Oh, we talk to our clients and say, oh, they need this.
14. 0:34Our suppliers might mention something to us.
15. 0:36There's a lot of different places where these new ideas
16. 0:38can come from and of course, we would need to judge our
17. 0:40ideas and things like that to see if it's a, a real
18. 0:43idea, would it worked for us?
19. 0:44These kinds of things.
20. 0:45We all kind of take this together, but there is this
21. 0:47idea generation part we have to figure out is, hey,
22. 0:51is this a good idea for us to grow our business?
23. 0:53And that-that's where it kind of starts at.
24. 0:54This is like, this idea generation process part, okay?
25. 0:58Now once you have this idea, right?
26. 1:00Now, we have to go about and developing a concept test, okay?
27. 1:04Or we do what's called concept testing, okay?
28. 1:06For example, eventually, I want to another study abroad program
29. 1:09with my students, you know, and I got to think about that.
30. 1:11Where could they want to go?
31. 1:13What could they want to do?
32. 1:13Maybe we'll go to Italy, maybe we'll go to Spain,
33. 1:15maybe we'll go to Germany, maybe we'll go to China.
34. 1:18We'll go to one of those places we can go back to
35. 1:20again and have a good time at.
36. 1:21And so I'm going to my idea generation, thinking about
37. 1:23all this stuff we can do.
38. 1:24And then when I develop my concept testing, this
39. 1:27is when I put it together.
40. 1:28Okay.
41. 1:29I've decided we're going to do ten days in Spain and
42. 1:32in there, we're going to spend five days in Madrid
43. 1:34and five days in Barcelona.
44. 1:36Okay?
45. 1:36I have that.
46. 1:37And then how are we going to break it down?
47. 1:38Well, we'll figure Madrid one day, we've got to have free day
48. 1:41to go see the museums, right?
49. 1:42And then another day we're going to go see, hm, let's
50. 1:45see, we're going to learn, ah, how they make Spanish guitars.
51. 1:47And, and another day we're going to go see, hm, let's see if
52. 1:50some of the big factories there, we'll do that in Barcelona.
53. 1:53Oh, I've got a friend of mine who's a big insurance
54. 1:55person there, he could get us in with some people.
55. 1:57We'll do a tour of Camp Nou the, the FC Barcelona soccer stadium.
56. 2:01I'm just kind of getting the concept out there,
57. 2:03like the rough idea of what this product is.
58. 2:06And when you're doing that concept testing, you're
59. 2:08really just testing an idea.
60. 2:09How do you think this will work?
61. 2:11And you're usually asking your customers, hey, what
62. 2:14do you think about this?
63. 2:15So for my students would a 10-day trip to Spain, you
64. 2:17know, next year, be something you might want to do?
65. 2:20Or might not 'cause there's a lot of things that are going
66. 2:22to be influencing that, okay?
67. 2:24Now, once we get past the concept testing, you know,
68. 2:27like kind of idea phase and breaking it down a little bit
69. 2:29more, now we have to get into the product development part.
70. 2:32And here we're really developing those prototypes,
71. 2:35those first working models.
72. 2:36Now, if we look at it in terms of airplanes, these
73. 2:39are the first airplanes.
74. 2:40It's not just a, a concept idea on a piece of paper.
75. 2:43Now we're making models.
76. 2:45Now we're making small planes that fly on their own and stuff
77. 2:47like that to see as like, hey, could we have a plane this big?
78. 2:50Let's test it out.
79. 2:52And they're doing that.
80. 2:53And they're developing that product and the thing is while
81. 2:56you are doing the product development you're usually
82. 2:57going through, remember in the other video, we about the
83. 2:59concepts and the alpha testing, the beta testing, till we
84. 3:02get our final product, right?
85. 3:03And then that's what we're thinking about.
86. 3:05We want to get to that final product.
87. 3:07And so when we're developing it, the next thing we're going
88. 3:09to do is actually do some test market or market testing.
89. 3:12See how the market feels about this product.
90. 3:15Are they interested in it?
91. 3:16Would they buy it?
92. 3:17You know, and you might have small markets out that
93. 3:19you tested out in, right?
94. 3:21So like McDonald's, they might go to a small town or
95. 3:23a small town that represents their typical client base and
96. 3:26test out a new burger to see what do they think about it?
97. 3:29Are they buying this or not?
98. 3:30You know, just testing it, okay.
99. 3:32And a thing I got to tell you is each one of these steps we
100. 3:35have a video on that goes more in depth that really helps you
101. 3:38explain or helps you understand what we're talking about here.
102. 3:41This is just giving you that overall new product
103. 3:44development process idea.
104. 3:45Okay?
105. 3:46And so after we finish all this tests, we figured out the
106. 3:49right way we want to do things.
107. 3:50Right price we're going to put it at.
108. 3:52Right way we're going to market it, all kinds of stuff.
109. 3:54Now, we have our commercialization.
110. 3:57We're putting it out in the market.
111. 3:58This is when we actually put it onto the shelves.
112. 4:01We're deciding, where do we sell it first?
113. 4:03Where do we sell it second?
114. 4:04Who's going to be the main customer that's first?
115. 4:06We lay these things out, because if you think about it,
116. 4:09you know, you'll see like some stores get the new iPhone first
117. 4:12and then six months later, someone- another store does.
118. 4:15Why is that?
119. 4:16It's all part of our rollout.
120. 4:17It's our part of our commercialization.
121. 4:20And this is where we're really laying out those like four P's.
122. 4:22We're really putting that price, product, place,
123. 4:24promotion kind of stuff.
124. 4:25That's when it's actually going out into the market.
125. 4:28Okay.
126. 4:28We've done our product launch.
127. 4:30It's out there.
128. 4:31Okay?
129. 4:32And I know sometimes you say commercialization, product
130. 4:34launch, they kind of count, kind of the same thing here, if you
131. 4:36to kind of think of it that way.
132. 4:38But the thing is you do your product launch,
133. 4:40you got it out there.
134. 4:40It's being commercialized.
135. 4:41People are buying it and then we have to do
136. 4:43evaluation of results.
137. 4:45So is the product selling?
138. 4:48Is it doing what it says?
139. 4:49Are customers believing it?
140. 4:51I mean, we have to think about these things.
141. 4:52Is it really working?
142. 4:53Ar-, the people are buying it.
143. 4:54Oh, it's a hair shampoo that help out, helps
144. 4:56the hair grow back.
145. 4:57Well, our clients are saying it's not really working,
146. 4:59at least mine isn't.
147. 5:00So you have to think about these things.
148. 5:01So sometimes when you go back and you evaluate y-your results
149. 5:05of this new product development, you start to see, hey, you know,
150. 5:09it's not doing what it says.
151. 5:10Maybe we need to sell it in a different way.
152. 5:12You might say that it's more effective in other ways, like
153. 5:14if you look up the history of Viagra, you know, the
154. 5:17erectile dysfunction drug.
155. 5:19Actually started off, not as an erectile dysfunction.
156. 5:21It was a side effect that the erectile dysfunction
157. 5:24stuff stopped, right?
158. 5:26It's like, oh, well we saw with the results, it
159. 5:29actually worked better here.
160. 5:30May we take it back and try to sell it to something else?
161. 5:33Or we redesign it, redevelop that product to see, you
162. 5:36know what, there's something else we might not, we
163. 5:37might need in there, okay?
164. 5:39And so when companies develop new products, they really
165. 5:41do go through this kind of step-by-step process
166. 5:44just to make sure they're covering all their bases.
167. 5:46So if you want to review it again, you start
168. 5:48with an idea generation, come up with that idea.
169. 5:50Then the concept test, and you're starting to
170. 5:52break it down to get some ideas from your customers.
171. 5:54If they liked that idea, then you do your product development.
172. 5:57Actually make an actual product, you can try out.
173. 6:00And then of course you do your market testing to see how the
174. 6:02market feels about this product.
175. 6:04And then you launch it when it's ready to go.
176. 6:06You have your product launch.
177. 6:07And then afterwards you have to evaluate results to see
178. 6:09if your new product did what you thought it would do.
179. 6:12So I hope this helps you understand kind of the overall
180. 6:14new product development process.
181. 6:16If you want to learn more, we've got tons of videos
182. 6:18on new product development.
183. 6:19So check them out.
184. 6:21Bye.