Product and Service Development Report: NPD Processes and Factors

This report provides a comprehensive overview of the new product development (NPD) process, detailing each stage from idea generation to commercialization. It explains the importance of customer integration throughout the development stages and illustrates these concepts with examples from PepsiCo. The report examines idea screening, concept development, marketing strategy development, business analysis, product development, and test marketing. It also highlights other crucial factors for consideration in product and service development, such as adapting to market demands and government decisions, using PepsiCo as a case study to demonstrate practical application of these processes.

LO1 : Product and Service Development
New Product and Service Development(NPD) : is the total process that takes
a service or a product from conception to market. New or
rebranded products and services are meant to fill a consumer demand or an
opportunity in the marketplace.
1) Explain the processes involved in developing products and
services and levels of customer integration within the stages of
development, then apply these processes to developing a product
or service in a specific regulatory institution (the selected
company).
A- Idea Generation :
The new product development process starts with idea generation. Idea
generation refers to the systematic search for new-product ideas. Typically, a
company generates hundreds of ideas, maybe even thousands, to find a handful
of good ones in the end.
Example : PepsiCo has gathered ideas for the development of soft drinks from
several sources that have taken the opinions of the employees and studied the
competitors thoroughly.
B- Idea screening :
The new product development process is to examine the idea. The idea of
checking means nothing else than filtering ideas to choose good ones. In other
words, all ideas created to discover good ideas and drop poor ideas are
examined as soon as possible. While the purpose of generating ideas was to
create a large number of ideas.
Internal source : is the research and development department and previous
studies .
External source : Are distributors , competitors , customers, suppliers .
Example : PepsiCo has chosen the idea of multiple flavors according to the
wishes of customers where it chose to add flavors apple and lemon according to
customer demand

C- Concept development and Testing :
The process of developing new products, attractive ideas must be
developed into the concept of the product. The product concept is a
detailed version of the idea of the new product the idea is converted into a
product and a sample is made and the benefits of the product and how to
use and the extent of its compatibility with the target market are
determined and at this stage a sample is distributed to the target
customers to test the product and take feedback from them on the product
whether it needs to be developed and does it meet the required needs .
Example : PepsiCo has produced a sample of carbonated and peach flavor soft
drinks for a limited time from customers voting on the flavor they love.
D- Marketing strategy development :
The new product development process is the marketing strategy development.
When a promising concept has been developed and tested, it is time to design
an initial marketing strategy for the new product based on the product concept for
introducing this new product to the market.
Example : PepsiCo designs ads on tv and social media on a sample of soft drinks
flavored with peaches and berries to determine the flavor that will win
E- Business analysis :
Once decided upon a product concept and marketing strategy, management can
evaluate the business attractiveness of the proposed new product. The fifth step
in the new product development process involves a review of the sales, costs
and profit projections for the new product to find out whether these factors satisfy
the company’s objectives. If they do, the product can be moved on to the product
development stage.
Example : PepsiCo worked to evaluate the market situation and calculate the
balance sheet of the product in terms of calculating the cost of production, profit
and marketing, determining the sales volume for the first year and determining
prices in line with the market .
F- Product development :

The process of developing the new product proceeds with the development of
the actual product. Up to this point, for many new product concepts, there may
only be a word description, drawing or perhaps an approximate prototype. But if
the concept of the product goes through a business test, it must be developed
into a physical product to ensure that the idea of the product can be transformed
into a practical market offer.
Example : Through the stages of product development, PepsiCo develops the
product significantly in order to reach the best product that can compete with it in
the market.
G- Test marketing :
At this stage in the new product development process is test marketing. In this
stage of the new product development process, the product and its proposed
marketing programme are tested in realistic market settings. Therefore, test
marketing gives the marketer experience with marketing the product before going
to the great expense of full introduction. In fact, it allows the company to test the
product and its entire marketing programme, including targeting and positioning
strategy, advertising, distributions, packaging etc. before the full investment is
made.
Example : PepsiCo worked on the selection of one of the products soft drinks in
the market where it distributed samples to the target customers and took their
opinion of the product so that PepsiCo does not release the product before
testing it by customers close to the company because if there is a problem with
the product may lead to material losses
H- Commercialisation :
After the marketing test process, the decision is made by the managers to either launch the
product or re develop it, and then the product is launched and a large promotional campaign for
the product is launched to increase consumer awareness, attract new customers and deliver the
product to the largest number of consumers. The campaign can a high cost in the first year, and
must Knowing the current market situation and the economic situation before starting the
market offering process.
Example : After the success of the berry flavor, Bseiko launched directly into the market
and worked on advertising campaigns about the brand through television and social
media platforms.

2- Through your understanding and knowledge of the processes of developing
products and services, explain from your point of view other factors that must be
taken into consideration when carrying out the process of developing products and
services in addition to the stages of the process of developing products and services
that are accepted.
My opinion : The company must act on the government's decisions because this may
cause significant losses to the company, for example, PepsiCo no longer distributes
soft beverages flavored with berries in the Jordanian market because it got a small
turnout in the Jordanian market and did not get a place like other flavors .
References :
https://marketing-insider.eu/
Google scholar
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