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What is New Product Development (NPD)? And How to Do it… | Video

What is New Product Development (NPD)? And How to Do it...

We take it for granted when new products appear on the market. They must have been made by someone, who followed a process. And that process was the New Product Development, or NPD, process

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What’s the connection between NPD and Project Management?

Many Project Managers end up managing NPD Projects. So, an outline understanding of New Product Development may well be useful to you.

New Product Development

New Product Development is the process that takes a new product or service from conception to the marketplace. Within modern businesses, it is usually highly structured and well-documented, for two reasons:

  1. Efficiency
    Speed to market, investment cost, and risk will determine the commercial success of a new product. An efficient process can:
    1. speed the development lifecycle
    2. reduce the costs
    3. manage and eliminate risks
  2. Accountability
    The NPD process uses budget and creates risk. And it holds the future of the business in its hands. The implications of success or failure can be financial, reputational, and even existential.

The New Product Development Process

There are many models of New Product Development processes. Here’s a conceptual model that illustrates the key features.

1. New product strategy

Organizational-tier strategy for how new products need to fit with an existing portfolio and serve the company’s mission and vision. Sets goals and objectives for any new product.

2. Concept creation

Various steps to this, including:

  • Creating the new ideas
  • Screening the ideas to find likely winners and eliminating those that don’t fit
  • Structuring the best idea into a clear concept

3. Design

How people interact with, and experience, products and services. It affects which products or services we choose and what we are prepared to pay for them. Often, design is a key differentiator from competing products.

4. Business Analysis

Before a company invests in a product design, it must assess the likely commercial impact of the new product, to build an investment appraisal.

5. Development

Engineering and problem-solving to craft a finished, marketable product. Ususally via pilots or prototypes.

6. Marketing strategy

Includes market testing with prototypes (and using beta test versions in the software world). The marketing strategy covers how the company will raise awareness of the new product and generate market demand. It will often focus on the 4Ps of

  • Product
  • Place
  • Price
  • Promotion.

7. Commercialization

How the company can make a profit from its new product or service and maintain a satisfactory cash flow? This takes in pricing, detailed marketing and sales plans, product launch plan, service and support packages, and more.

What is a Fuzzy Front End of the NPD Process?

A common model of New Product Development has four stages. These map onto the process above. I’ve indicated the mapping of steps in brackets:

  1. Fuzzy Front End (1,2)
  2. Design (3,4)
  3. Implementation (5)
  4. Fuzzy (or Messy) Back End (6,7)

It’s often engineers who refer to the process of crafting new ideas as fuzzy because there is often little structure or clarity of direction. Product ideas change a lot during the Fuzzy Front End (FFE), as product managers seek to refine them.

However, like the Definition Stage in Project Management, the FFE is crucial to the success of the end product. And therefore, it is vital to not rush through this stage. Some advocates argue for this step accounting for up to 50 percent of the time from first inkling to product launch.

…and the Fuzzy Back End?

For hard-nosed product engineers, the whole commercial and marketing piece is messy and imprecise. They leave it to the Product Management and marketing teams.

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About the Author Mike Clayton

Dr Mike Clayton is one of the most successful and in-demand project management trainers in the UK. He is author of 14 best-selling books, including four about project management. He is also a prolific blogger and contributor to and Project, the journal of the Association for Project Management. Between 1990 and 2002, Mike was a successful project manager, leading large project teams and delivering complex projects. In 2016, Mike launched OnlinePMCourses.

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