Operations illustration Operations theory

New Product Development

When new products are needed to replace those coming to the end of theirproduct life cycles in order to keep up with market changes, it’s known asnew product development. The time scale from development to launch can change depending on the business; in the chemical industry, for example, development work can be taking place on products that may not reach the market for ten years. New products go through five stages whilst being developed.

Generating ideas

The first stage is when firms generate ideas for new products. This can occur in a variety of ways, including: indentifying gaps in the market; scientific research; open discussions and analysing other products.


The second stage is to analyse the ideas generated in the first stage. There are many questions to be answered at this stage, one of the most important being whether or not the product is marketable. It needs to be decided whether or not the product fits with the company’s objectives, whether it is legal and if the technology is available to produce it.


The third stage is the development of the product, possibly involving technical development in a laboratory, or the production of a prototype. The design of the product is also very important at this stage. Tests on customers may be carried out to see whether or not the product meets customer needs.

Test Marketing

Test marketing is when a new product is tested on a small, representative selection of the market. It’s important that this test audience share similar characteristics to the target market as a whole. The benefits of test audiences are the high degree of reliability offered by the results. Test marketing can often be costly and businesses do run the risk of allowing competitors to see the new products, offering them the chance to take counter-measures before a national launch.

Commercialisation and Launch

The final stage is the launch of a product. Any problems found during test marketing must be resolved. A marketing package is then decided upon to give the product the greatest chance of success. As many ideas are often rejected throughout the process, few end up getting launched.

Supporting Documents

These downloads will help to put operations theory into context using real world examples from real businesses.

The use of the marketing mix in product launch
NIVEA  logo

Find out how NIVEA used operations theory to thrive in the manufacturing industry by downloading our premium case study.

Using the marketing mix to drive change
Parcelforce Worldwide logo

Discover how Parcelforce Worldwide used operations theory to thrive in the logistics industry by downloading our premium case study.

Meeting customers' needs
Travis Perkins logo

Discover how Travis Perkins applied operations theory to prosper in the construction industry by downloading our premium case study.

Sponsorship as part of the marketing mix
Ford logo

Discover how Ford applied operations theory to prosper in the automotive industry by downloading our premium case study.

Protecting the marketing mix through intellectual property rights
Intellectual Property Office logo

Find out how Intellectual Property Office applied operations theory to succeed in the public sector industry by downloading our premium case study.