“Custom New Product Development” is the complex process of designing, prototyping, and manufacturing a new product from scratch. The designing and engineering phases involved in this process are intricate and require extensive collaboration among key departments such as R&D, Operations, Marketing, and Finance. Each team member in a product development company works towards finding innovative solutions to customer needs.
Companies with a high success rate in custom new product development continuously generate a steady stream of new product ideas. These ideas undergo rigorous screening, and only those that offer unique, user-friendly solutions make it to the final manufacturing phase. Successful ideas are often those that provoke responses like “I wish I’d thought of that!”
One critical factor for companies is determining the product’s price. For consumer products, the cost to bring a product to market can be substantial. The sales process length and the product’s marketability also play significant roles. Companies must have effective distribution channels or quickly establish them to get products in front of potential buyers. Ignoring this step can lead to difficulties in placing products on major retailers’ shelves.
Product ideas may be shelved if the manufacturing duration is too long or if design challenges could delay the overall development period. Delays translate to lost revenue opportunities. The manufacturing cost versus market size is crucial. For example, spending $6 million on a product with a $2 million annual return is not economically viable. Additionally, the availability of an in-house development team affects profitability. High manufacturing costs can result in higher product prices, reducing market competitiveness.
After extensive research, meetings, and presentations, a company forecasts the anticipated profit from custom new product development. If the expected profit does not meet the company’s financial standards, the decision may be made to halt manufacturing. However, strategic benefits, such as accessing new markets or enhancing brand image, may influence the decision to proceed. Ultimately, the choice to give the new product development the green light involves weighing all factors.
For free tips and guidelines on new product development, product design, prototype development, and product marketing, feel free to contact GID at 714-323-1052. For a free consultation or to discuss the feasibility of your new product concept, visit GID at www.GIDCompany.com. Also, follow us on Facebook.
