Walk down a grocery aisle and count the products that say "New!" Then remember that many of them will be gone within a couple of years. New products fail for ordinary reasons: nobody really needed them, they cost too much to make, the price was wrong, or a competitor got there first. Developing a product is expensive, and the costs climb sharply as an idea moves from a sketch to a factory run to a national launch. So businesses use a step-by-step process that tests the idea at every stage and stops the losers before they eat the budget. This lesson follows a product from idea to shelf, then looks at the product mix it joins and at the package, label and warranty that go out the door with it.
The New Product Development Process
Think of new product development (NPD) as a funnel. Hundreds of ideas go in the top; a handful come out the bottom as products. Every stage is a decision point: go on to the next, more expensive stage, or drop the idea now. Killing an idea at screening costs an afternoon of discussion; killing it after a national launch can cost millions of dollars and damage the brand. That is why the early stages use cheap tools, like scoring and short surveys, and the expensive tools, like prototypes and test markets, are saved for the few ideas that survive.
- Idea generation: collect ideas from customers, employees, salespeople, competitors, suppliers, research and trends.
- Idea screening: score each idea against criteria such as fit with the company, size of the market, cost and risk, and drop the weak ones.
- Concept development and testing: describe the product in words or a simple image and ask target customers whether they understand it, want it and would buy it at a stated price.
- Business analysis: estimate sales, costs, break-even point and profit to see whether the product can make money.
- Product development: build prototypes and test them for safety, quality and how customers actually use them.
- Test marketing: sell the product, with its planned price and promotion, in a limited area or online channel to see real buying behaviour.
- Commercialization (launch): roll out the full marketing plan, production and distribution across the target market.
Product Lines and the Product Mix
Most businesses sell more than one product. A product line is a group of closely related products, such as all of a company's frozen pizzas. The product mix is every product the company sells, across all of its lines. Marketers describe the mix with three measures. Width is the number of product lines. Length is the total number of products across all lines. Depth is the number of versions of one product, such as its flavours and sizes. A wide mix spreads risk across several markets; a deep line lets the company serve many tastes within one market and fill more shelf space. The trade-off is cost: every extra version needs its own inventory, packaging and shelf space, so companies regularly prune slow-selling items.
| Product line | Products in the line | Depth example |
|---|---|---|
| Kettle chips | Sea salt, salt and vinegar, dill pickle, ketchup | Sea salt comes in 3 bag sizes: snack, regular, party |
| Popcorn | Butter, kettle corn, white cheddar | Kettle corn comes in 2 sizes |
| Pretzels | Classic twists, sourdough nuggets | Classic twists come in 2 sizes |
Packaging: More Than a Box
| Function | What the package does | Example |
|---|---|---|
| Protect | Prevents damage, spoilage and tampering from factory to home | Sealed jar lids that pop when first opened |
| Contain and transport | Holds the product in a convenient, stackable size | Six-packs, shipping cartons sized for pallets |
| Inform | Carries legally required and helpful information | Ingredients, net quantity, instructions, nutrition facts |
| Promote | Attracts attention on a crowded shelf and communicates the brand | Bold colours and a clear logo seen from three metres away |
| Add convenience | Makes the product easier to use, store or reuse | Resealable bags, squeeze bottles, single-serve pods |
Labelling Law and Warranties
In Canada, the federal Consumer Packaging and Labelling Act (CPLA) sets labelling rules for prepackaged non-food consumer products, and the Competition Bureau enforces it. The label must show the product's identity (its common or generic name), its net quantity in metric units, and the name and principal place of business of the dealer it is made for or by. The identity and net quantity must appear in both English and French; the dealer name and address may be in either language. Food has its own rules under the Food and Drugs Act and the Safe Food for Canadians Act, enforced by the Canadian Food Inspection Agency, which also require bilingual labels and add items such as a nutrition facts table and an ingredient list. Quebec's Charter of the French Language adds further French-language requirements. A warranty is the seller's promise about the product's quality and what happens if it fails. It reduces the customer's risk, which makes it a selling point as well as a legal duty.
- A promise the business states in writing or out loud
- Says what is covered, for how long and what the remedy is
- Example: "Parts and labour covered for 2 years"
- Extended warranties sold at the till are optional extras
- A promise the law assumes even if nothing is written
- The product must be of acceptable quality and fit for its normal purpose
- In Ontario, consumer protection law means these cannot simply be waived in a consumer sale
- Example: a new kettle that will not boil water is not fit for its purpose