7 Steps of New Product Development Process [2024]

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Discover the ins and outs of the new product development process, and learn how to streamline your workflow to turn your ideas into reality. This article will help you understand the product development process in simple 7 steps. 

Even for the top ecommerce businesses, creating a final product is rarely straightforward. For budding entrepreneurs, the process might seem mysterious, how does a concept in your mind become a tangible item you can touch and use?

Successful product development requires market research, effective product management, and a lot of trial and error. While every journey is unique, there are common strategies that founders use to start their businesses and deliver finished products.


This guide will teach you everything about the product development lifecycle and offer practical tips to enhance your workflow, helping you bring your vision to life.

Product development is the full journey of bringing a product from an idea to the market. It also covers updating an existing product or introducing an old product to a new market. 

This involves finding out what the market needs, coming up with a product concept, planning out the product, launching it, and gathering feedback.

New product development (NPD) focuses on creating a brand new product from scratch and getting it to the market. This process continues throughout the product’s entire life cycle. 

Even after the product is launched, you can keep improving it by collecting user feedback, making updates, and developing new versions.

Who is Responsible for New Product Development?

In any company, whether it’s a startup or a well-established business, product development brings together every department, including design, engineering, manufacturing, marketing, and UI/UX. 

Each team plays a crucial role in defining, designing, building, testing, and delivering the product. Because the product development process is complex, effective product management is especially important.

How to Create a New Product Development Process Plan?

A product development plan, or strategy, is the method a business uses to guide its product development efforts. This detailed plan includes milestones and checkpoints to keep a diverse team aligned and on track until the product is launched.

Before beginning any stage of product development, write down your plan. 


  • How much time do we need? 

  • What are our deadlines? 

  • How often will we meet? 

  • What are our goals?

Later in this guide, we’ll go through the product development process step by step. You can use this as a template to set mini-goals, establish workflows, and assign responsibilities for each stage.

Why is a Product Development Plan Important?

A product development plan is crucial for several reasons:

  • Team alignment

  • Checkpoints

  • Risk reduction

  • Success metrics

  • Creative freedom

– Team Alignment

Getting everyone on the same page from the start ensures that team members can work independently yet efficiently towards the same goal.

– Checkpoints

The plan should include regular meetings and goals for each stage, helping the team stay on track by periodically regrouping.

– Risk Reduction

A comprehensive plan that includes competitive research, market research, and target audience analysis ensures no important aspect is overlooked.

– Success Metrics

The plan defines what success looks like and how to measure it, so you know if your process is working.

– Creative Freedom

With clear guidelines in place, teams can innovate without needing constant supervision.

7 Steps of New Product Development Process

While the product development process can vary by industry, it generally consists of seven stages: idea generation, research, planning, prototyping, sourcing, costing, and commercialization.

Follow this framework to turn your product idea into a market-ready product:

  1. Generate an idea

  2. Conduct market research

  3. Develop a plan

  4. Create a prototype

  5. Source materials and production partners

  6. Determine your costs

  7. Launch your product

1. Generate an idea

Many aspiring entrepreneurs get stuck at the first stage: coming up with ideas. They often wait for a sudden inspiration to find the perfect product. 

While creating something entirely new can be exciting, many of the best ideas come from improving existing products.

The SCAMPER model is a helpful tool for quickly generating product ideas by asking questions about existing products. 

Each letter stands for a prompt:

  • Substitute (e.g., faux fur instead of real fur)

  • Combine (e.g., a phone case with a battery pack)

  • Adapt (e.g., a nursing bra with front clasps)

  • Modify (e.g., an electric toothbrush with a sleeker design)

  • Put to another use (e.g., memory-foam dog beds)

  • Eliminate (e.g., cut out the middleman to sell sunglasses cheaper)

  • Reverse/Rearrange (e.g., a duffle bag that prevents suits from wrinkling)

By thinking about these prompts, you can find new ways to improve or adapt existing ideas for a new audience or problem. Insights from business analysis can also help you understand market opportunities better.

2. Conduct market research

Starting production without first validating your idea can lead to failure. Product validation ensures you don’t waste time, money, and effort on an idea that won’t sell. 

Here are several ways to validate your product ideas:

  • Send out an online survey for feedback

  • Launch a crowdfunding campaign

  • Test market by releasing your idea to a small group of your target audience

  • Research market demand using Google Trends

  • Gauge interest through email sign-ups or pre-orders

  • Seek initial feedback on forums like Reddit

  • Conduct a feasibility study to see if your idea is worth investing in

It’s crucial to get feedback from a large and unbiased audience. Be cautious about relying too much on people who say they “definitely would buy” your product, until they actually pay, they aren’t customers. 

Also, avoid seeking advice from family and friends unless they have industry experience.

Validation research should include competitive analysis. If your idea has market potential, there are likely competitors already in that space. 

Researching competitors will help you understand how they attract customers and make sales. Ask potential customers what they like or dislike about your competitors to identify your competitive advantage.

The information gathered from product validation and market research will help you understand the demand for your product and the competition you’ll face before you start planning.

3. Develop a plan

Product development can get complicated quickly, so it’s crucial to plan before building your prototype. At this stage, having a clear product roadmap can be very helpful.

Start by sketching what your product will look like. This sketch should be detailed, with labels explaining the various features and functions. 

You don’t need a professional-quality drawing since it’s not for the manufacturer yet, but you can hire a technical illustrator from sites like Dribbble or UpWork if needed.

Along with your sketch, make a list of parts or materials required. For example, if you’re designing a purse, your list might include:

  • Large and small zippers

  • Metal clasps

  • Leather straps

  • Protection pouch

  • Embossed label

  • Interior wallet

Your plan should also address these questions to help with pricing, brand positioning, costs, and marketing strategy:

  • Is the product for everyday use or special occasions?

  • Is it a luxury item or affordable?

  • Will it use premium materials or be environmentally friendly?

  • What will the packaging and labels look like?

4. Create a prototype

During product development, the aim of prototyping is to make a final product that you can use as an example for making lots of copies. Prototyping means trying out different versions of your product, getting rid of the ones that don’t work, and making improvements until you’re happy with how it looks and works.

How hard it is to make a prototype depends on the type of product you’re making. Some things, like recipes for food or making cosmetics, are easy to test yourself.

  • Food recipes

  • Cosmetic or personal care formulations

  • Some fashion and jewelry designs

But usually, entrepreneurs will get help from someone else to make their prototype. For example, if you’re starting a clothing brand, you can work with local seamstresses, cobblers, or pattern makers. 

You can find these services online by searching for local services or asking design or fashion schools for help with prototyping.

For things like toys, household items, electronics, and other hard objects, you might need a 3D model to make a prototype. 

You can find people who can help you with this online. Alternatively, you can try using software like SketchUp, Tinkercad, or Vectary to create 3D models yourself.

Thanks to 3D printing, you can make physical samples from digital designs much faster and cheaper than before.

Once you have a prototype ready, you can give it to a small group of people to see what they think. 

This helps you figure out if people are interested in your product and how much they’re willing to pay for it. The feedback you get at this stage helps you improve your product for your target customers.

Started in 2019 by friends Charlie Bowes-Lyon and Freddy Ward, Wild aims to reduce plastic and waste from bathrooms worldwide.

5. Source materials and production partners

Once you’ve got a prototype you’re happy with, it’s time to get the materials and partners you need to make it. This is called building your supply chain – it’s all about finding the right people and resources to make your product and get it to customers.

Here are some tips for finding manufacturers or suppliers:

  • Think about storage, shipping, and warehousing partners

  • Find more than one supplier for the materials you need. This helps you compare costs and have backups in case one supplier can’t deliver

  • Go to trade shows where you can meet suppliers and talk about materials. Building a personal relationship can help when you negotiate prices later

  • Think about whether it’s better to get your materials locally or from overseas

  • Check out similar products on Alibaba and contact the factories to see if they can make your design

6. Determine your costs

Now, you should have a better idea of how much it will cost to make your product. Costing is a process where you gather all the information to figure out how much it costs to produce your product (COGS) and decide on a retail price and profit margin.

Your calculation should include the cost of materials, setting up the factory, making the product, and shipping it. 

Don’t forget about other expenses like shipping, import fees, and any taxes you’ll need to pay to get your product to the customer. These fees can affect your COGS a lot, especially if you’re making your product in another country.

If you got quotes from different places for materials or manufacturing, you can compare them in your spreadsheet. 

You can make columns for each item to see which option is cheapest. Or, you can make a new spreadsheet to compare making your product locally or overseas.

After you figure out how much it costs to make your product, you can decide how much to sell it for.

7. Launch your product

Now, you’ve got a product that’s ready to be sold and make money. 

The final step is to introduce it to the market. 

At this stage, the product development team hands things over to the marketing team for the product launch.

If you don’t have a big budget for ads, don’t worry. You can still have a successful launch by using these tactics.

Here are some ways to launch your product without spending a lot on ads:

  • Send emails about your product to people who have signed up for updates

  • Team up with influencers who can promote your product and earn a commission

  • Get your product included in lists of gift ideas

  • Make it easy for people to buy your product through Instagram

  • Ask customers who bought your product early to leave reviews

What Are the Best Product Development Examples?

In the movie “BlackBerry,” based on a true story from 2023, the founders of Research in Motion (RIM) create a basic version of their mobile phone to show to investors.

Even though the final product looked different, this prototype helped them show their idea and get funding or see if people were interested.

Product development was really important for RIM (later known as BlackBerry) as they competed with Apple. But they lost because they didn’t understand the market well and rushed to finish their product without testing it enough.

Don’t make the same mistakes, learn about your industry and market. The product development process changes depending on what industry you’re in, so let’s look at some examples to see what you might need to think about.

Fashion and Apparel Development

In the fashion world, product development often starts with a hand-drawn sketch or a digital version made with a computer program like Procreate.

Then, the sketch is turned into a sample by a pattern maker or seamstress. In the prototyping stage, they make a set of sizes, with different measurements for each size you want to sell.

When it’s time for production, the clothes might be made by the designer themselves, by a factory, or by a print-on-demand company if it’s graphic t-shirts or accessories.

Here are some of the other factors to consider:

  • Hang tags: These are the tags with the brand name that hang from clothes. They usually have info like the price and size.

  • Labels: These are the fabric tags sewn or stamped onto clothes. They usually have info about what the fabric is made of and how to take care of it.

  • Wash tests: Testing how well your product holds up in the wash. This helps you understand how to take care of it and if it lasts a long time.

Beauty and Personal Care Development

Many of the newest and trendiest beauty brands began in someone’s kitchen, from makeup to bath products to skincare. Founders start by experimenting with ingredients, often making products by hand before moving to large-scale production with a manufacturer.

Another common practice in the beauty industry is white labeling. This means finding an existing product or manufacturer and putting your own packaging and branding on it. 

Whether you make your products from scratch or go with white labeling, mass production in the cosmetics industry usually involves working with a lab and a chemist to ensure consistent quality on a large scale.

Here are some of the other factors to consider:

  • Labels and warnings: Make sure to list all the materials in your product and any potential allergic reactions.

  • Laws and regulations: Look into the rules from the FDA (Food and Drug Administration) and how they apply to your product and packaging. This is important for where your product is made and where you plan to sell it.

  • Shelf life: Test how long your product lasts and add expiration dates if needed.

Food and Beverage Development

Making food and drinks is one of the cheapest things you can start doing at home. For example, making a new energy bar can be as easy as getting ingredients and changing the recipe in your kitchen, just like Lara Merriken did when she started Lärabar.

But if you want to sell your food in stores or online, you’ll need to use a commercial kitchen that’s been approved for making food and passed safety checks. These kitchens are meant for making food on a bigger scale.

Here are some of the other factors to consider:

  • Labels and warnings: You’ll need to show what ingredients are in your product and provide info about nutrition.

  • Laws and regulations: Different places have rules about dietary info, allergens, and health claims that you have to follow.

  • Expiry dates: Figure out how long your product lasts and plan how you’ll make, package, and sell it before it goes bad.

Key Takeaways: New Product Development Process Cycle

In product development, every path to a finished product is different, and each industry has its own special challenges when creating something new.

If you’re feeling overwhelmed, remember that every product before yours faced similar hurdles. By following the steps in this guide, you can handle the challenge of bringing your product to market better.

No matter what you’re creating, if you do all the needed preparation, like researching, planning, making prototypes, finding materials, and figuring out costs, you can increase your chances of making a successful product.

Frequently Asked Questions (FAQs)

What is the product development process?

The product development process is how a business gets a product ready to sell. This could be a brand new product, making changes to an old one, or selling an existing product in a new place. 

It includes coming up with ideas, testing them out, making prototypes, figuring out costs, and then promoting the product, often online.

How can I come up with new product ideas?

Here are some of the examples of new product ideas:

  • Think up ideas together

  • Listen to what customers say

  • Try out your ideas

  • Look at what your competitors are doing

  • Ask people what they think

  • Check out social media

  • Look at wholesale markets

  • Test your ideas out

  • Read about what’s popular online

  • Brainstorming

  • Test marketing

  • Examining your competitors

  • Audience surveys

  • Social media

  • B2B wholesale marketplaces

  • Concept testing Online consumer trend publications

What is the difference between product development and product management?

Product development is about coming up with and making a new product from start to finish. It’s part of the whole process of a product’s life. To do this, you need a plan to turn an idea into a real product. 

Product management helps lead the teams working on the product to make something customers will want to buy, and they also plan out how to do it. 

Both the product management and product development teams work together to plan and create the roadmap that shows how the product will be made and sold.

What are the 7 stages in the product development process?

Here are 7 stages which helps you develop a product:

  1. Come up with ideas

  2. Do research

  3. Make a plan

  4. Make a prototype

  5. Get the materials you need

  6. Figure out how much it’ll cost

  7. Start selling it

What is a minimum viable product?

The minimum viable product (MVP) is the simplest version of your product that customers can use. 

It’s like a sneak peek to see if your product idea is good. Having an MVP lets product managers quickly get feedback from users so they can keep making the product better step by step.

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