MKTG5001 · Foundation In Marketing
New Product Development
New Product Development explains why firms need new products — to drive growth and replace declining mature lines (linking to BCG Question Marks becoming Stars) — and how they create them, built on deep consumer understanding rather than guesswork. The process is an eight-stage funnel: idea generation, idea screening, concept development and testing, marketing-strategy development, business analysis, product development, test marketing and commercialisation. Cost and scrutiny rise at every stage, with full launch (commercialisation) the most expensive.
What this chapter covers
- 01Why new products matter: growth and replacing declining mature lines
- 02NPD is built on deep consumer understanding (empathy map / pain points)
- 03The eight-stage NPD funnel in order
- 04Cost and scrutiny rise at every stage; many ideas drop out early
- 05Commercialisation (full launch) is the most expensive stage
- 06Link to BCG: new products feed the Question Mark → Star pipeline
Order the NPD funnel and place a decision
- 3 marksList the eight stages in order: (1) idea generation, (2) idea screening, (3) concept development and testing, (4) marketing-strategy development, (5) business analysis, (6) product development, (7) test marketing, (8) commercialisation.
- 2 marksIdentify where most ideas are cut: at idea screening (stage 2), the funnel narrows sharply — most of the 50 flavour ideas are eliminated here against simple criteria before any money is spent building them.
- 1 markExplain the early-kill logic: cost and scrutiny rise at every stage, so dropping weak ideas early — before product development, test marketing and the very expensive commercialisation — saves the most money and focuses resources on ideas most likely to succeed.
Key terms
- New product development (NPD)
- The process of creating new offerings, essential for growth and for replacing declining mature products, built on deep consumer understanding.
- NPD funnel (eight stages)
- Idea generation, idea screening, concept development and testing, marketing-strategy development, business analysis, product development, test marketing and commercialisation — narrowing as cost and scrutiny rise.
- Idea screening
- The early stage where most ideas are eliminated against simple criteria, before expensive development begins — the funnel's sharpest narrowing.
- Commercialisation
- The final stage, full market launch, and the most expensive step in the funnel.
New Product Development FAQ
What are the eight stages of new product development?
Idea generation, idea screening, concept development and testing, marketing-strategy development, business analysis, product development, test marketing, and commercialisation. They form a funnel that narrows as cost and scrutiny rise.
Why should a firm kill weak product ideas early?
Because cost and risk climb at every stage of the funnel, peaking at commercialisation (full launch). Screening out weak ideas early — before product development and test marketing — saves the most money and concentrates resources on the ideas most likely to succeed.
Exam move
Memorise the eight stages in order; listing them is a common short-answer. Pair that with the 'cost rises each stage, so kill ideas early' logic and the link to BCG (new products feed the Question Mark to Star pipeline).
