The process of new product development will always begin with an idea. The entrepreneur must therefore invest much time and thought into the required research effort meant to collect an array of ideas. There are plenty of resources that can be used in this regard; the internet is certainly one of the most handy to use.
Step 2: Evaluation and screening of the collected ideas
Once the entrepreneur has collected a number of ideas that he/she are relevant to the cause, the next step is to narrow down the list. The aim here is to remain with only those concepts that merit further study.
Step 3: New product business analysis
In this part of new product development the entrepreneur has identified an idea that he/she thinks is worth pursuing. This ceases to be an idea – it becomes a business proposal. An analysis of the same is conducted and this seeks to establish what the product features will be, its prospective market demand, and prospective profitability. The entrepreneur then sets up the new product development program formally and takes charge of conducting a further study into the product's feasibility or assigns the duty to an appropriate person.
Step 4: Actual product development
The fourth stage of new product development involves transforming the theoretical concept into a tangible product. Various prototypes of the same are manufactured according to the desired specifications and these are then tested to ascertain how feasible production will be.
Step 5: Testing the product in the market
Having identified the design of the product that seems most applicable to the market, the entrepreneur must do some actual market testing so that the perceptions of the new product development effort can be approved or disapproved by those who are meant to do the purchasing. The findings of this exercise are bound to imply changes to the product's design which will in turn alter some planned production variables. Sometimes the marketing testing results may prove reason enough to scrap the entire plan for commercial production.
Step 6: Commercialization
A new product development concept that has survived to this stage has proved feasible enough to warrant plans for commercial production and marketing. Once the product is launched the small enterprise has to contend with the market forces and do the utmost to ensure optimal market penetration.