9-step NPD process – Explained!

The most successful product launches are the ones that incorporate the needs of customers from the start. 

It’s the backbone of innovation for businesses of all sizes, from startups to established corporations. The NPD process helps companies minimize risks, optimize resources, and ultimately create products that consumers actually want to buy.

Great products are created not just for your customers, but with them

What sets successful NPD apart is its focus on the customer. By collecting and incorporating user feedback throughout the development journey, companies can create products that truly solve problems and meet needs. That’s why consumer research isn’t just a single step in the process—it’s a thread that runs through the entire NPD journey.

Always-on, iterative consumer research – what we do here at Attest – is super useful for this. In this article, we’ll look at different types of product development processes, and give you guidelines to go through the process with your team.

Types of new product development

New product development is more varied than you might think. Depending on your business goals and market position, you might focus on different types of NPD:

1. New-to-world products
These are truly innovative products that create entirely new markets or categories. Think of the first iPhone or the original Airbnb concept. These involve the highest risk but potentially the highest reward.

2. Product improvements
It’s not entirely ”new”, but it definitely is NPD. This type involves enhancing existing products with new features, better performance, or updated designs. This type of NPD is often lower risk and can extend a product’s lifecycle.

3. Product line extensions
Here you’re adding variants to an existing product line—different sizes, flavors, colors, etc. This leverages existing brand equity while reaching new customer segments.

4. Cost reductions
Sometimes NPD focuses on redesigning products to reduce production costs while maintaining or improving quality, helping you maintain competitiveness. It’s more about making improvements for the business, than for the customer. 

5. Repositionings
This type takes existing products and markets them for new uses or new markets, often with minimal changes to the actual product.

No matter which type of NPD you’re pursuing, a structured process will increase your chances of success and help you avoid costly mistakes.

Step one: discovery

You’ll want to start your NPD process by figuring out what problems you’re trying to solve. You might have a hunch about what your customers want, or perhaps you’re starting from scratch. 

Either way, this is the stage in which you’ll discover what’s next on your product horizon. Ask yourself:

• What problems are consumers facing that aren’t being adequately addressed?
• Are there emerging technologies or trends we could leverage?
• What are competitors missing or doing poorly?

Pro tip: Don’t limit your discovery to your immediate market. Some of the best product ideas come from observing adjacent industries or completely different markets. Cross-pollination of ideas can lead to breakthrough innovations.

Step two: idea generation and evaluation

Having done your discovery work, you should have a much clearer picture of where any gaps in the market are. With this knowledge you can start coming up with new ideas and see how they compare with others.

This is where creativity meets structure. Encourage your team to think broadly and without constraints initially. Techniques like brainstorming, mind mapping, and even role-playing can help generate diverse ideas.

Once you have a healthy list of ideas, it’s time to evaluate them. Create a scoring framework that considers factors like:

• Alignment with company strategy and brand
• Technical feasibility
• Market size and growth potential
• Revenue and profit potential
• Competitive advantage
• Resource requirements

Pro tip: Involve cross-functional teams in both idea generation and evaluation. Product managers, marketers, engineers, sales reps, and customer service staff all bring valuable perspectives. This is the stage where having a couple of chefs in the kitchen adds value rather than just creating chaos. Later on you will have to narrow it down.

Step three: concept testing

Now it’s time to get your ideas in front of some actual consumers. 

By testing your concepts with real people, you’ll find out which ones will be worth pursuing, and which to abandon. 

Don’t worry if your preferred concept ends up getting the boot – that’s why you do testing: to find out which products will resonate with your audience.

In concept testing, you’ll create simple descriptions or visualizations of your product ideas and present them to your target audience. You want honest feedback about:

• How well they understand the concept
• Whether it solves a real problem for them
• How likely they would be to purchase it
• What price they’d be willing to pay
• How they would use the product
• What concerns or objections they have

Pro tip: Don’t just listen to what people say—watch how they react. Body language and emotional responses can tell you as much as verbal feedback.

Step four: market analysis

Once you know which of your concepts is popular with consumers, you should find out how successful it’s likely to be in the market. 

Here, you’ll analyze similar products and find out the potential size of your market. Combining market analysis along with your concept testing data should tell you which demographics show the highest purchase intent for your product. 

Your market analysis should include:

• Market size and growth projections
• Competitive landscape analysis
• Pricing studies
• Distribution channel assessment
• Regulatory considerations
• Economic factors that might impact success

Pro tip: Don’t just focus on the total addressable market—identify your serviceable obtainable market (the segment you can realistically capture) for more accurate projections.

Step five: product prototyping and testing

Now you’re down to the one product you’re going to develop and market, it’s time to work out the details; what will it look like? What features will it have? How will it function?

Prototyping brings your concept to life, allowing you and your customers to interact with a tangible version of your product. Start with low-fidelity prototypes to test core functionality, then gradually increase fidelity as you validate aspects of the design.

Key activities during this stage include:

• Creating physical or digital prototypes
• Usability testing with target customers
• Technical feasibility testing
• Manufacturing assessment
• Iterative refinement based on feedback

Pro tip: Embrace the “minimum viable product” mindset. Focus on the core features that deliver the main value proposition first, then add enhancements in future iterations.

Step six: positioning and packaging testing

Having a useful and appealing product is only half the battle – now you must work out how you’re going to present it to the world. This includes positioning, messaging and packaging, if it’s needed, and consumer research plays an important role in this.

Your product positioning defines how consumers will perceive your offering relative to alternatives. It encompasses:

• Your unique value proposition
• Key messaging and claims
• Brand voice and personality
• Visual identity and packaging design
• Pricing strategy

Testing these elements helps ensure your product stands out and resonates with your target audience. Methods include:

• Message recall testing
• A/B testing of messaging
• Package usability tests
• Shelf impact studies (for physical products)
• Price sensitivity analysis

Step seven: commercialisation

This is when you’ll push your product into production, using all of the insights you’ve learned up to this point. You’ll source suppliers, lock in distribution models, and balance the overall budget for your product development. Key activities include:

• Finalizing budgets and timelines
• Finalizing production specifications
• Setting up supply chain and manufacturing processes
• Developing quality control procedures
• Finalizing pricing and revenue models
• Creating sales materials and training
• Establishing customer support processes
• Building marketing and launch plans

Step eight: product launch

This is what you’ve been building up to! 

This is when you launch your fantastic new product to the market. You can also take this opportunity to pat yourself on the back. 

A successful launch requires coordination across multiple departments and channels. Key components include:

• Monitoring for issues or bugs 
• Marketing campaign rollout
• PR and media outreach
• Sales team enablement
• Channel partner engagement
• Social media activation
• Customer education and onboarding

Step nine: track success

The hard work doesn’t end when your product’s out in the market. You’ll want to find out how customers are reacting to your product, from purchase numbers to satisfaction data.

Post-launch tracking helps you measure success and identify opportunities for improvement. Monitor metrics like:

• Sales performance against projections
• Customer acquisition costs
• Customer satisfaction and NPS scores
• User engagement metrics
• Return rates and customer service issues
• Social media sentiment
• Repeat purchase rates
• Market share growth

Pro tip: Establish a formal post-launch review process at 30, 90, and 180 days to assess performance and make course corrections as needed.

Best practices and things to avoid

The NPD process comes with plenty of challenges. Here are some practical tips to help your team navigate them successfully.

Best practices

Keep the customer at the center
Products that truly solve customer problems succeed. Continue validating your assumptions with real user feedback throughout development – not just at the beginning.

Build diverse, collaborative teams
Marketing sees things differently from product, who sees things differently from sales. Bring these perspectives together early and you’ll create more well-rounded products and avoid misalignment before launch.

Learn to fail productively
Not every concept will be a winner. The key is to identify the failures early through testing and research – when you’ve invested hundreds in a survey rather than thousands in development.

Common NPD pitfalls to avoid

Becoming too attached to your ideas
It’s natural to fall in love with your concept. But when market research indicates customers aren’t interested, listen to the data rather than assuming they “just don’t get it yet.”

Feature overload
Every additional feature increases complexity, development time, and potential points of failure. Focus on delivering core value first, then enhance based on actual customer usage.

Underinvesting in research
When budgets get tight, research is often the first thing cut. This short-term thinking leads to costly mistakes. The most successful companies make product decisions based on insights, not hunches.

FAQs for new product development