PRODUCT DEVELOPMENT

Product Development



Product Development

Introduction

The new product development process in Japan is designed to generate and analyze products being created to help companies respond to their competitive marketing environment. Some reasons that Japanese companies develop new products include profitability, branding, and pressure from competition. Traditionally, the product development process in Japan follows a step-by-step procedure that allows companies to gain and test information in order to minimize risks of developing and launching new products without sufficient analysis. This seven-step process includes: idea generation, screening, concept testing, business analysis, marketing mix development, test marketing, and commercialization (Annacchino, 2003).

First Steps

The first step in the product development process of Japan is idea generation. New ideas can come from a number of sources, including: consumers, employees, competitors, or advertising and government agencies. Market research strategies such as focus groups and customer surveys are also useful toward idea generation. The technique referred to as brainstorming, where ideas flow freely to generate solutions to problems, may also be useful during this step (Annacchino, 2003).

The next step in the product development process in Japan is screening. In this step, ideas are revised and reviewed to examine if they are in line with company objectives. The criteria most often used to evaluate new product concepts include: feasibility, long-run trends, and a company's mission (Cooper, 2005). Since the idea is still in the development phase, a more extensive analysis is done later. The main question a company in Japan will ask at this stage is, “Does this new product fit in with our company's business strategy?” Extensive evaluation is not the central focus of this stage. If an idea is viewed as an attractive option, it will move on to the next step in the process (Perreault and William, 2006).

Concept testing is the third step in product development process followed in Japan; it involves a more thorough evaluation of the product concept, with initial feedback obtained from potential consumers and other sources. Marketing research at this stage may be obtained by surveys, questionnaires, focus groups, and interviews; or from secondary sources. If information gathered from marketing research is negative, the idea may be dropped (Cooper, 2005).

If an idea makes it to the business analysis stage in Japan, it will undergo a complete evaluation that can involve a number of different departments within the organization. While market research plays a vital role during this stage, other departments such as research and development, finance, and logistics will be included to estimate the likelihood of product success. For example, if a product is designed but a company decides it is too much of a financial risk to attempt a full-scale launch, it will most likely look for ways to lower production and marketing costs or decide to abandon the product at this stage (Annacchino, 2003). Some products may be good ideas and sound like potential success early in the new product development process, however, a thorough business analysis may show them to be poor business ...