From concept to market: A step-by-step to the new product development process

New Product Development (NPD) is the set of design, engineering, and research processes that combine to create and launch a new product to market. Unlike regular product development, new product development is specifically about developing a brand new idea and seeing it through the entire product development process—culminating in a new product.

In today's competitive market, the ability to offer products that meet customers' needs and expectations has never been more important.

Customer requirements, behaviors, technology, and competition are changing rapidly, and businesses cannot rely on existing products to stay ahead of the market. They need to innovate, and that means developing and successfully launching new products.

In this article, we explain what new product development is and break down its seven stages. We also share best practices for developing your own NPD process, along with tips from product experts at Meta, Priceline, Bonsai, and EduMe.

New product development refers to the complete process of bringing a new product to market. This can apply to developing an entirely new product, improving an existing one to keep it attractive and competitive, or introducing an old product to a new market.

The emergence of NPD is driven by the need of companies to maintain a competitive advantage in the market by introducing new products or innovating existing ones. While regular product development refers to building a product that already has a proof of concept, new product development focuses on developing an entirely new idea—from idea generation to development to launch.

NDP helps you:

NPD typically falls into one of these three types:

These are innovative products that have never been designed and developed before. These products have the capacity to create entirely new markets. Think of the first personal computers, for example, which brought computing into homes; or the initial release of smartphones, which changed how we communicate and access information. These products often come with high risks but also the potential for high rewards.

These products already exist in the market but are new to the company. Like when a male grooming company, initially focused on razors and beard care, expanded into new personal care products—like body wash and shampoo. This move doesn’t redefine the business, but it broadens the business offerings and can reach a wider audience.

This involves introducing new versions or variations of existing products. For example:

Software updates that introduce new features, improved security, bug fixes, and user interface improvements
Revisions to an existing product's design, materials, or process to improve its functionality, durability, or cost-effectiveness
Upgrades or replacements of specific components or subsystems within a larger product to improve its overall capabilities or performance

The goal is to keep the existing product relevant, competitive, and aligned with evolving customer needs and market trends—rather than introducing an entirely new product line. These additions help keep the product line fresh and appealing to customers, offering them more choices and meeting diverse needs.

When it comes to new product development, each journey to a finished product is different. Although the product development process can vary from company to company, it's possible to break it down into seven main stages. Let's have a look at them one by one.

Idea generation involves brainstorming for new product ideas or ways to improve an existing product. During product discovery, companies examine market trends, conduct product research, and dig deep into users' wants and needs to identify a problem and propose innovative solutions.

A SWOT Analysis is a framework for evaluating your product’s strengths, weaknesses, opportunities, and threats. It can be a very effective way to identify the problematic areas of your product and understand where the greatest opportunities lie.

There are two primary sources of product development ideation. Internal ideas come from different areas within the company—such as Marketing, Customer Support, the Sales team, or the Engineering department. External ideas come from outside sources, such as studying your competitors and, most importantly, feedback from your target audience.

Some methods you can use are:

Ultimately, the goal of the idea generation stage is to come up with as many ideas as possible while focusing on delivering value to your customers.

This second step of new product development revolves around screening all your generated ideas and picking only the ones with the highest chance of success. Deciding which ideas to pursue and discard depends on many factors, including the expected benefits to your consumers, product improvements most needed, technical feasibility, or marketing potential.

The idea screening stage is best carried out within the company. Experts from different teams can help you check aspects such as the technical requirements, resources needed, and marketability of your idea.

Logic trees, like Teresa Torres’ Opportunity Solution Tree, can help you visualize and chart the best path to your desired outcome. Ben Zacharias, Product Director at Priceline, explains:

All ideas passing the screening stage are developed into concepts. A product concept is a detailed description or blueprint of your idea. It should indicate the target market for your product, the features and benefits of your solution that may appeal to your customers, and the proposed price for the product. A concept should also contain the estimated cost of designing, developing, and launching the product.

Developing alternative product concepts will help you determine how attractive each concept is to customers and select the one with the highest value.

Once you’ve developed your concepts, test each of them with a select group of consumers. Concept testing is a great way to validate product ideas with users before investing time and resources into building them.

Concepts are also often used for market validation. Before committing to developing a new product, share your concept with your prospective buyers to collect insights and gauge how viable the product idea would be in the target market.

Now that you’ve selected the concept, it’s time to put together an initial marketing strategy to introduce the product to the market and analyze the value of your solution from a business perspective.

The product development stage consists of developing the product concept into a finished, marketable product. Your product development process and the stages you’ll go through will depend on your company’s preference for development, whether it’s agile product development, waterfall, or another viable alternative.

This stage usually involves creating the prototype and testing it with users to see how they interact with it and collect feedback. Prototype testing allows product teams to validate design decisions and uncover any flaws or usability issues before handing the designs to the development team.

Regina Smirnova, Lead Product Designer at Meta, uses the IDEO Design Thinking approach when working on a new product. Design thinking brings together “what is desirable from a human point of view with what is technologically feasible and economically viable.” As Regina explains, a successful Minimum Viable Product (MVP) lives at the intersection of desirability, feasibility, and viability.

Test marketing involves releasing the finished product to a sample market to evaluate its performance under the predetermined marketing strategy.

There are two testing methods you can employ:

The goal of the test marketing stage is to validate the entire concept behind the new product and get ready to launch the product.

At this point, you’re ready to introduce your new product to the market. Ensure your Product, Marketing, Sales, and Customer Support teams are in place to guarantee a successful launch and monitor its performance.

Remember, product launch is a critical part of the broader commercialization stage.

While the product launch focuses on the initial introduction of the product to the market, commercialization includes the entire timeline from product development to market saturation.

To better understand how to prepare a go-to-market strategy, there are some essential elements to consider:

You will need to constantly track and measure the success of your product launch and make adjustments if it doesn't achieve the desired goals.

Looking to deliver successful products? Here are some tips from product experts at Meta, Priceline, Bonsai, and EduMe, on creating an effective product development process.

“I think the most important part is to align on the product vision and the company goal. Everyone in the team should understand where we are moving and what principles we follow during the product development process,” says Regina Smirnova, Lead Product Designer at Meta..

Yet Laure Alboy, Senior Product Marketer at Bonsai, points out: "Sometimes it’s hard to be in the right conversation at the right time, and there are so many conversations to be a part of. I think one way to get visibility is to be part of strategic conversations and being the person who’s leading the questions around 'why are we doing this?'"

Ben Zacharias, Product Director at Priceline, explains that having a clear understanding of the product development strategy and company goals makes it much easier to make good decisions and trade-offs along the way.

Use roadmaps, backlogs, recurring meetings, and syncs, but keep communicating with your team. “At EduMe, we communicate our vision all the time,” explains Ian Booth, Product Team Lead at EduMe. "Always focus on the value that you're bringing and communicate it constantly."

At every stage of the product development process, there is one critical driving factor: the customer. Identify what your customers need, which features would help them the most, and how to make your product appealing to them.

Collecting product feedback and insights helps you ensure that the end product meets their expectations, solves their problems, and fulfills their needs.

When it comes to making and validating decisions, Ian points out that it’s always best to have qualitative data alongside quantitative information. You can use product surveys, customer interviews and market research, but make sure you back up those insights with behavioral data on how users use the product.

“I think the foundational parts of a great product development process are often the intangible, human elements that help create motivation, focus, and impact,” says Ben. Supportive leadership, clear direction, an open and high empathy culture, and a learning mindset are crucial to building productive teams and great products.

Also, each team is different. So, it’s essential to create a supportive and flexible environment that allows you to identify which product development process works best for you and your organization.

Netflix, the world's leading streaming service with over 209 million subscribers in 190+ countries, began as a DVD rental business in 1997 and transitioned to streaming in 2007. It already existed in the video rental space, but saw a chance to develop a new product and expand into a new market—the video streaming services industry.

After this immense success, today key aspects of its product development include:

Having an efficient new product development process is essential to bringing your final product to the market. Hopefully, by following these steps and expert tips and adapting them to your business strategy, you can build a successful product.