Consumers' needs are not static, they keep on changing. As such, companies must continuously keep on developing new products and services to ensure they meet the evolving customers’ needs. As commented by Jang et al., (2019) to survive in the current world, businesses must continuously innovate and invest in new products and services to create more value for customers. Otherwise, failure to continuously develop new products that create new values for customers can be the beginning of the end for the company. A case in point is Nokia, a once leading phone manufacturer that slipped from market leadership to almost bottom of the market. Nokia failed to innovate new products which meant it failed to create new value for customers. As a result, customers shifted to Nokia’s competitors who were continuously creating new value for them (Remco, 2017). Therefore, new product and service development is critical for the survival of a firm. It is needed to ensure firms continuously meet the evolving needs of customers, continuously create new value for customers hence be able to retain them as well as gain new ones and be able to defend itself against competitors (Kim et al., 2016). As demonstrated in theory, developing a new product or service is not done in an ad hoc. It a process which start with opportunity identification, idea generation and screening, concept testing, sales forecasting, product design, product use testing, public launch and commercialization (Bhuiyan, 2011, Bhuiyan, 2011; Kazimierska & Grębosz-Krawczyk, 2017). In this paper, evidence will be corrected from real world business case scenarios in an attempt to understand whether the product development in the real world follows the new product development process as discussed in theory.
Opportunity identification and idea generation
According to the existing theory/ literature, identification of opportunities is the first process in product development is identification of market opportunity and then generation of potential ideas (Bhuiyan, 2011; Kazimierska & Grębosz-Krawczyk, 2017). Kazimierska & Grębosz-Krawczyk (2017), note that new product development start as a result of identifying a market opportunity such as unfulfilled customers’ needs, an exploited market niche, etc. Similar sentiments are also shared by Armstrong (2019), who argues that company do not just invest in product development blindly. There must exist a market conditions that must have triggered the new product development processes. Existing literature have identifying a lot of marketing opportunity or condition that can trigger the new product development process. According to Armstrong (2019) new product development process can be trigger by unfulfilled customer needs, unexploited market niche, unused resources, change in leadership , technological advancement among others.
The new product development in real world seems to support the claim made in literature that idea generation is as a result of identification of market need. a good case in point is tesla and moderna. Tesla will go in history as the first motor company to focus fully on electric cars for the mass market. It development new product i.e. cars that were fully electrical for the mass market. As noted in their report wesite, tesla idea to develop new electric cars were informed by unmet need. i.e. the need for car that did not emit carbon dioxides and hence causing less environmental impacts (Tesla, 2021). It was also informed by the unmet market need for electrical cars that would performs as well as combustion engine based cars. It is as result of such unmet need that (Tesla, 2021). Similarly, moderna a drug manufacturer, begin the new product development process after identifying a market opportunity following the outbreak of covid-19. When the outbreak of covid-19 was recorded across the globe, there was dire need to have a medicine that would treat people infected with it or at least protect people from it. Moderna, in response to this market opportunity began the process of developing a new vaccine drug for the covid-19 (Moderna, 2019). The new product which is known as moderna Covid-19 vaccine with code name mRNA-1273 has already been fully developed and launched to the market.
Idea and concept generation
According to the existing literature/theory, the second stage in product development is the concept generation (Shalabi & Bach, 2016; Armstrong, 2019). Once idea is generated and screen for it quality, concept development is then done. This stage involves coming up with a verbal or prototype statement of the news product and the value it will create for customers (Armstrong, 2019). Concept development can be market driven or market driving. A market driven concept develop is one that seek to solve a customer’s problems that has been identified (Armstrong, 2019). On the other hand, market driving is developing a cutting edge technology and then applying it to solve customers’ problem (Armstrong, 2019). For instance, recently, coca cola retired it coke zero products and instead developed product known as ‘new coke no sugar’. The development of this product concept was market driven rather than market driving. When making statement about the new product, the coca cola Australia marketing director, Kate Miller that the new product was developed as a result of continued growth in appetitive for no sugar options (Coca cola Australia, 2021). This is a clear indication that the new coke no sugar concept development was guided by the desired to solve the market needs. On the other hand, Samsung, on august 11 release a new smartphone in the market known as Samsung galaxy Z Fold 3. This new product was not market driven but a market driving product. The company first developed or acquired cutting edge technology such as optical image stabilization (IOS), armor aluminum frame, AI face recognition among others among others and then leverage on the technology to create a new product i.e. Samsung galaxy Z fold 3, to solve customer problem. So, while developing it concept for the new product i.e. new coke, no sugar, coke followed the sequence of need –form-technology. On the other hand, while developing the concept for it Samsung galaxy Z fold 3 concept, Samsung first developed the technology, form and use the same to solve customer problem. It thus followed the technology-form and- Need sequences in it concept development.
Concept testing
As clearly highlighted in the existing literature, once concept development stage is complete., the next phase in new product development is concept testing (Armstrong, 2019; Kazimierska & Grębosz-Krawczyk, 2017; ). Concept testing involves checking the technical and market feasibility of the new product (Armstrong, 2019). Akroush, (2012) argues that concept testing is critical as It helps minimizes chance of product failures, helps companies identify what customers likes or hate about the product, potential selling points among other important insights that helps in refining the final product. Despite its importance, concept testing is not always conducted when developing a new product. For instance, In the process of developing the mRNa-1273 vaccine, Moderna did not do any concept testing. This is a process that was skipped. Once the company settled on an idea to develop a new vaccine for the vaccine and developed the concept of the vaccine, they mobilized their resources and immediately started producing and testing the real product i.e. the vaccine (moderna 2021). Perhaps this was due to the obvious reason that the world in dire need of a covid-19 vaccine or due to the time pressure that existed at the moment i.e. being the first product in the market. In a normal operating environment, concept testing is critical. Coca cola understand the importance of concept testing very well. Before the embarked on the production and launch of the new coke no sugar, the company announce that it spends 5 years gathering information and insights from customers that informed it final product. Some of the data collected from customers including their thought and feeling about the proposed recipe for the new coke no sugar product (coca cola, 2021).
Sales forecast
After concept testing is done and positive result achieved, the next stage in the new product development is to forecast the sales (Armstrong, 2019, Kuka, 2018). Armstrong, 2019) note that forecasting sale is critical as it helps companies know how much of the product they show produce or manufacture. Garcia (2014) State that before companies make significant investment in product development, they need to be sure whether the product will bring sufficient return. As such, they engaged in sales forecast which not only help them quantify the potential customer segments but also helps in assessing costs involved and make profits projection as well as determine calculate key financial benchmarks such as net present value, internal return on investment among others which help them make a business case for the product development. Sales forecast is a critical step in new product development which real world business take quite serious. For instance, coca cola had to estimate the market for the new coke no sugar before they went into production. They wanted to be sure that there was enough customer segment for the product for them to make good profit. According to coca cola, their sales estimates shows that there is growing number of people looking for healthier options and it as a result of such that the company decided to launch the new coke no sugar (Coca cola australia, 2021. Their decision to launch the new coke no sugar was therefore obvious informed by sales forecast which showed that there was already an adequate customer segment looking for sugar free drinks and the market was big enough for the company to generate profit. When generating the sales forecast, coca cola has some advantage in doing so. They already had the coke zero in the market which was meant to be their health option and as such has some historical data to rely on. It can therefore be concluded coca cola used historical data especially those from coke Zero to estimate the sales forecast and build a business case for the new product i.e. New coke no sugar.
Product design
Once a business case has been made about the proposed product, then next stage is the product development process is the design of the actual product. Product design involve two aspects which are the aesthetic design and form or features of the products (Garcia, 2014). Armstrong (2019), note that in cluttered market product design is one ways in which a product gets noticed by customers. Armstrong (2019) further note that product design in some product is so crucial as it create initial impression which in turn generate inferences regarding others features of the product such as price, quality and so on. In the automotive industry where tesla operate, product design both aesthetics and functionality are critical to the success of new product. The automatic industry is quite cluttered and for a new product to be easily noticed by the market it has to have distinctive, attractive, relevant and useful product design both aesthetics and functional. It is for this reasons that product design is so critical to tesla when developing new product including the Model X car. It is for this reason that Tesla paid a lot of attention in the functionality design of the cars such as the car miles range, acceleration performance, safety, space among others functional design. In addition, tesla had to pay a lot of attention to the aesthetic design of their cars as this created the first impression. As a result, the company spend a lot of time and resource trying to create a design for model X that is aesthetically appealing (Tesla, 2020; Chen & Perez, 2019). Luckily, the company was able to get the aesthetic and functional design right which helped capture the attention of the market and hence helped the company gain significant market share (Chen & Perez, 2019). Equally, product design plays an important role in the success of new product in the smartphone industry. it is for this reasons company such as Samsung paid a lot of attention when designing the Samsung galaxy Z fold 3. As result, they not only created a distinctive design, i.e. the folding phone but also ensured the functional design of the phones was superiors, attractive and useful that those phone existing in the market (McGregor, 2021). Otherwise, ignoring the aesthetics or functional design of the product within the smartphone market can be considered as a guaranteed path to product failure.
Product use testing
One of the most important stage or step in new product development is product use testing. Product use testing involves testing end –users experience of the product developed by the firm (Shalabi & Bach, 2016). As noted by Garcia (2014) product use testing helps in testing the uniqueness of the product, repeat purchase potential, complexity of customers need among other. According to existing literature, there are three type of product use testing. These are alpha, beta and gamma testing (Garcia 2014, Armstrong, 2019). Alpha testing is testing done in –house mostly with employees. Beta testing is testing done at customer sites to determine if the product works and is free of any issues. Finally, Gamma testing involving thorough evaluation of the product by the end user. It is usually used to determine if the customers needed that it sought to address are successfully met or not (Garcia,2014).
In the real business world, product use testing is critical to most companies. For instance, coca cola recently launched a new product i.e. new coke no sugar. However, they did not just release it to the market without doing so product use testing. The company began their product use testing internally where the product was evaluated using employees. The aims of the internal testing also known as alpha testing was to ensure that the new coke, no sugar product tasted as similar a s the original classic coke despite the fact it has zero sugar (Cocacola, 2021). Once the alpha testing was done, then product then moved to the gamma testing. In this case, the product is released to the end –users to try it and then the company measured their reactions. The coca cola Australia marketing director Lucie Austin noted that during the gamma testing they noted that more people were preferring the new coke no sugar over the existing coke zero. She furthers noted that during the testing, over 3.5 million Australians purchased and tried their new product and most has since become regular drinker. As a result of the positive feedback from consumers during the gamma testing, coca cola was not going ahead into full production and commercialization of the product (coca cola Australia, 2021). Another case study is the moderna. During the development of their covid-19 vaccine, the company took product-use testing very serious. Once the company developed the covid-19 vaccine, it goes through a number of testing with the final one being the clinical trial. The clinical trial involves testing the vaccine on end-users with the sole aims of determining whether the product meet the customers need i.e. if it is effective in protecting end user against covid-19, as well as testing the safety and any issues including side effect that might arise from it use. Since this testing involves thorough evaluation to known whether end-users’ needs are met, it can then be termed as gamma testing. From their gamma testing or the clinical trial in which 30 420 end users were involved, moderna found out that their covid-19 vaccines was effective in reducing the risks of covid-19. It was also found to be safe for end-user use (Moderna, 2020). However, some issues arise during the testing. for instance, it was found that people with certain allergies reacted to the drugs and as a result, moderna developed use guideline which excluded people with history of severe allergic reaction such as anaphylaxis (Moderna, 2020).
Product launch and marketing strategy
Once product use testing phase is complete, the product is now ready for commercialization. As a result, the next stage is product launch. While some company hold official launch, other just roll out the product to the market. In the case of tesla, the company did hold an official launch of it model x and model Y cars. During the official launch, the company CEO gave a demonstration of the product including it functional features such as performance data, safety rating and data, cars features among others (Topspeed, 2020). Similarly, When Samsung also conducted an official launch of Samsung galaxy Z fold 3. During the official launch, press release was sent to news rooms and an official event for the launch of the product was held on august 11 where Samsung official made a demonstration of the product and it features (Samsung mobile, 2021). on the other, coca cola did not do formal launch of its new coke no sugar product. Instead, it rolls out the new product slows to first test and learn more about customers’ reception of the product and then later increased the production once it was assured of positive reception of the new product by the market.
Immediately after the product is launched, it is usually followed up by implementation of marketing strategies. In the case of coca cola, once the new coke no sugar was roll out, the coke has since bigger positioning the brand as the healthier options and has started promoting it through a number of avenue including social media and PR. Similarly, when the Samsung launched it Galaxy Z fold 3 product, it started to marketing campaign aims at positioning the product as premium product. The marketing campaign which is currently ongoing is also meant to create more awareness about the new product and hence drive sales.
In the case of Samsung, the company has already developed a ready market for it product. It has super loyal fan who are always waiting for new products from the company to be release for them to make purchase. The first sales are recorded even the product is officially introduced through the market. For instance, as noted by Pulse news Korea, (2021), there were 800,000 pre-orders for the Samsung galaxy Z fold 3. As for the coca cola, the first sales of the new coke no sugar product were made through its existing distribution channel. The company produced the product and then started rolling out using it existing distribution channel in the gamma testing phase. The first sales achieved by coca cola during the first sales or during the testing phase are critical and has since influenced the subsequent sales. For instance, according to the coca cola Australia marketing directors, during the testing stage, 3.5 million purchased the new product and majority of them has since become regular users (coca cola Australia, 2021). This shows that the first sales recorded during the testing face has since influence or encouraged repeated consumption of the product and hence the subsequent sales.
Public liability and environmental and ethical issues
A company has a responsibility of ensuring that the new product the launch into the market does not put the life of people in dangers nor do they compromise the environment or social wellbeing of the society. unfortunately, some new product launched has not adhere to the public liability and environmental and ethical issues and as a result they had to either been recalled, fine or even face public backlash. However, in the case of Tesla, the launch of Model Y and model X cars was not in any ways affected by public liability, ethical issues. On the contrary, the product i.e. model x and model Y were hailed for being sustainable cars that did little harms to the environment as compared to combustion engine based cars. Similarly, the launch of Samsung galaxy Z fold 3 has so far been without any public liability, environmental or ethical issues raised against the products. One the other hand, the new coke no sugar product launched by coca cola has also not been faced with any public liability so far. However, the product has been involved in green marketing. Coca cola is marketing the product as a healthier option that better nutritional value that most other soft drink (coca cola australia, 2021). It. Fortunately, such claim or green marketing has not been discredited or disapproved by anyone.
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