Product development involves several important stages like generating ideas, idea screening, concept testing, business analysis and market analysis, actual development of the product, test marketing, and commercialization. Each of these stages involves considerable study and analysis; and at each stage, a management decision is called for before proceeding to the next stage.

New ideas may come from customers, dealers, and in-company sources or from research organizations. Consumer's problems are the most fertile ground for the generation of new ideas.

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7 ultimate templates for every stage of the product development process

New ideas can also come from market research studies. Research studies on consumers, products, etc., will reveal market gaps by comparing the existing supply of products with the ideal product conceptions of consumers. But all market gaps cannot lead to commercially viable products. Only the promising ideas will be chosen for framing new product concepts.

Normally, a new product-oriented organization will have several new product ideas. The problem lies in identifying which ones are promising. In the idea screening stage, expert product evaluation committees rigorously screen various product ideas. When a new product idea passes the initial screening, it is subjected to concept testing.

Here, the product concept itself is tested to see whether the prospective consumers understand the product idea and whether they are receptive to it.

Business analysis and market share analysis are crucial in product development because several vital decisions regarding the project are made based on the analysis done at this stage. This stage will decide whether, from a financial and marketing point of view, the project is worth further processing. Investment and profitability analyzes will give the overall impact on the corporation's financial position with or without the new product.