There are 10 quick questions in NewShoes

Product development investments only have a positive effect on the home region.

True
False
How many regions are there in NewShoes?

1
2
3
4
The contract bid always goes to the firm (or firms if a tie occurs) with the lowest bid.

True
False
How many periods of prior operations inNewShoes before you assumed control of the firm?

0
1
2
3
4
New improved versions of your product are solely the result of amount and consistency of product development expenditures.

True
False
How much does it cost to enter a new region?

$500,000
$750,000
$1,000,000
$1,500,000
Advertising has the same effect in all regions.

True
False
Given a 75% experience curve, if unit cost is $32 with cumulative production of 600,000, what will it be when cumulative production doubles to 1.2 million units?

$24
$28
$32
$64
The selling price you set for your shoes can be different in each of the markets where you have a presence.

True
False
How much does each salesperson you have employed cost you per period?

$40,000
$60,000
$80,000
$100,000

What is Product Development?

Product development, also called new product management (NPM), aims at bringing a new product to the market. The process involves all the steps from ideation, designing, and development to marketing newly created or rebranded goods or services.

In short, New Product Management is the entire journey in which a product starts in the mind of a creator or entrepreneur and in the hands of the buyer. The main objective of product development is to nurture, maintain and possibly increase market share by satisfying demand.

The NPD appreciates that not everybody will find the helpful product, so; it defines the target market. Thus, the development involves lots of market research to find opportunities and create a product that solves problems in the area.

Steps in The Product Development Process

The specific NPD development process varies from one industry to another. But, the process is guided by similar frameworks. The process can product development process takes place in seven main stages, namely: 

1. Ideation

Ideation is the process of coming up with ideas that can exploit opportunities. Brainstorming and questionnaires are some methods for an idea’s genesis. Then, an idea analysis closely evaluates the concept. Concept studies involve market research to determine an idea’s feasibility.

2. Scoping and strategic planning

Organizations set out a strategic plan to cover the development process. The planning entails defining the product and scope of the concept. Scoping involves researching possible value, challenges, and opportunities for marketing the product. In short, the strategic planning stage relies on success metrics and business analysis to create a roadmap for development.

3. Prototyping

Companies create prototypes with a detailed business plan and architectural framework of the product. Think of the prototype as the architectural design of the final product. After thorough market risk research and feasibility tests, designers draw up the initial prototype of the product. After coming up with the Minimum Viable Product (MVP), the designers can now test it. A mock-up product is created based on the MVP prototype. 

4. Validation and market researching

Conducting feasibility tests in the market lets you know if it makes sense. Leapfrogging to production could be a risky thing to do since you might waste your time and money. Market research validates the product as business-worthy. So, the product goes through various tests to check whether the MVP is good enough for launching. The company then pays attention to the finer details until; the product is ready for use.

5. Building a reliable supply chain

When everyone is satisfied with the product, it’s time to institute the supply chain. Know where to gather the raw materials needed in production. Also, secure enough partners to supply your product; vendors, wholesalers, and retailers. This stage involves planning how the product will get into the hands of the customer.

6. Pricing

Costing involves complex business analysis to determine the final price tag of an item or service. Factor in all the costs incurred during manufacturing, including labor, raw materials, factory setup, and production. Also, add taxes, shipping, and import fees. Then, standardize this price with what the competition offers.

7. Launching, marketing, and commercialization

When the product is ready for launch, it’s time to implement the strategy. By this time, you’ve already made a profitable and useful product prepared to hit the market. So, the product developers will hand your creation over to the hands of the marketing department. 

Product Development Examples

Everyday consumer goods industries have straightforward product development strategies. Initiatives such as beauty, food, and fashion have easy product development because you need to sketch the product’s prototype.

Some fashion businesses start by making clothes and shoes on demand. Then, they learn what customers want and nurture the idea.

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