Forward-thinking organizations are under constant pressure to innovate in order to remain competitive. But innovation in itself isn’t enough; new product development can be a costly and resource-draining function of an organization. An effective product development process can help optimize resource efficiency and deliver quality products that improve customers’ lives.

If left unattended, new product development can jeopardize revenue potential and the future of a business. In order to compete, organizations have to innovate efficiently, using as little time and as few resources as possible to deliver quality products quickly.

The Lean product development process is designed to help organizations overcome the challenges presented by new product development, such as:

  • Lengthy product development cycle times
  • The need for innovative solutions on tight schedules
  • High development costs
  • High production costs
  • Lengthy production cycle times

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What is a New Product?

Before getting into the product development process, it’s helpful to understand what exactly a new product is. The term new product can be used to describe products that fit into a variety of categories:

  • They might be products that create a new category, such as the iPhone when it first entered the market.
  • They might replace or adopt existing products, such as later iterations of the iPhone.
  • They might significantly broaden the market for an existing product; an example of this could be watches that double as fitness and sleep trackers.

But new products might not even be new at all; they could be old products being introduced to new markets, such as the introduction of technical sporting gear to a mass audience.

Or they can be old products packaged in a new way, such as the recent revamp of the classic Polaroid camera, targeted at millennial consumers.

Why develop new products? New products can be used to defend a company’s position in a marketplace. They can help organizations expand into new segments, diversify into new markets, improve their relationships with distributors, even out peaks and troughs in demand, and make better use of an organization’s resources.

Product Development Process

Regardless of industry, the product development process generally follows the following steps:

  • Idea generation
  • Idea screening
  • Concept development and testing
  • Test marketing
  • Commercialization

Idea generation

Idea generation is a continuous search for opportunities in new or existing markets. Many organizations use a tool called a SWOT analysis to delineate internal and external factors affecting an idea’s viability.

Idea screening

During the idea screening stage of the product development process, teams aim to eliminate risky concepts before investing resources into them. They often create a list of criteria by which to screen ideas, answering questions such as:

  • Would the customer in our target market benefit from this product?
  • What kind of competitive pressure exists around this product idea?
  • Does this product align well with one or more of our core competencies?
  • Is it technically feasible to manufacture this product with our current production system?

Concept development and testing

Concept development and testing involves creating prototypes of product concepts and developing tests to assess their performance with the target market. Concept testing with prototypes can help organizations avoid investments in undesirable or unsuitable products for the market.

Market strategy development

The market strategy is the plan for introducing and growing the product’s influence within a marketplace. It involves an in-depth assessment of the potential growth of the product, as well as strategy for positioning the product against existing competitors. The market strategy also includes long-term profit goals for the product.

Test marketing

In most industries, it makes sense to test products in select target markets before expanding to a wider audience. This helps organizations smooth out any kinks in marketing, positioning, and messaging.


Commercialization is where the full production and marketing plans come to fruition. This is when organizations launch the product and all relevant marketing, and begin analyzing the results of the product’s performance.

Lean Product Development Process

Applying Lean to the product development process helps organizations stay focused on delivering value while minimizing waste, specifically in the stages of idea generation through concept testing, where development costs can get out of control. This is a complex space where the flow of value can only be discerned at an abstract level, making it difficult to visualize a linear process. Decisions are made on short-cycle experimentation, prototyping, set-based design, and emergent practice.

This is different from Lean production, in which the flow of value is physically evident, and the goal is to manufacture products within margins of control. In Lean production, decisions are generally made on best practices.

Any Lean product development process generally includes the following ideas: