Now is the ideal time to be developing new products. With continuing growth in construction activity and over recent years the drive for sustainability and energy efficiency, there is a now a need for new product solutions. The shortages of some key building materials also presents opportunity to introduce new building systems.
An effective New Product Development strategy will bring the right products to market quickly and cost effectively. To succeed it needs the support of market research throughout. Here are six steps to that process.
1. Generating the ideas: Review your customer satisfaction studies. What problems have customers highlighted that you could solve? Go through technical enquiries, what are frequent problems and how could you solve them? These can be the catalyst for idea generation to start the product innovation process.
2. Test the Concepts: Having developed a short-list of product concepts, define the target markets they will be most suited to and conduct research to gauge interest. At this point you will be floating broad concepts and many respondents will have trouble visualising them, or if you are talking to architects or engineers they will probably want to know the details of how they work. One approach is not to tell them about the product but to discuss the problems it will solve and the circumstances when it would be used.
3. Size of Opportunity: Having refined the short-list down to one or two product concepts worth development, it is necessary to assess the market potential. If there is an existing product in the market you should research the volume of sales it achieves. If a completely new product then an estimate of market potential must still be calculated. Either way, before committing funds for development it is important to ensure the potential market will justify the investment, a combination of research and forecasting skills.
4. Prototype Testing: Before embarking on a full launch, create prototypes which you can show your customers. Their feedback can prevent expensive mistakes, but also highlight opportunities you might have missed. Make sure you show the product to a good cross-section of customers representing all of the members of the decision making unit, as well as installation. There’s many a product which has failed for what seemed a small details but became a major issue on site.
5. Launch Plan: As part of the launch plan you will need to understand the decision making unit. Who will influence product selection and because of what factors? What information, in what form will need to be provided? Another important decision is the name. If you have a portfolio of brand and product names you need to decide how these might be combined and test what the new name might mean to the market.
6. Pricing Strategy: At what level are you going to set the price? Whether yours is a me-too product or a new concept, people will have a price expectation. It is necessary to establish what this is and if you plan to sell at a premium, try to put a value onto the benefits you offer.
Conduct all of these activities and you improve the probability of a successful launch. Be wary of false economy, cutting corners during the development stages could lead to an expensive failed product launch.