NPI (New Product Introduction) VS. NPD (New Product Development)

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Idea Generation Cycle

In the world of manufacturing, the initials NPI and NPD are often mistakenly used interchangeably. However, there are a number of differences between the two.

What is NPI?

New Product Introduction is a program used within a company to define, develop and launch a new product or service. NPI activities generally begin after the design and development of a product or service with the focus being placed on its launch and marketing campaigns. For an NPI program to be truly effective, it requires a lot of teamwork, communication and support.

A New Product Introduction program often involves the implementation of a six-phase process: define, feasibility, develop, validate, implement and evaluate.

Define: This phase involves defining the functionality and performance abilities of the product or service being launched.

Feasibility: This phase involves having upper level management evaluate a new product or service’s potential for success. The design concepts are reviewed to ensure they fulfill the requirements outline in the “define” phase.

Develop: This is where the product or service’s design features are more clearly defined. Risks are assessed in this phase and the production process is evaluated.

Validate: In this phase, tests are conducted on product prototypes. If necessary, some design changes may be made.

Implement:During this phase, the manufacturing processes are refined and validated through pilot builds and capability studies. As well, process documentation and quality controls are developed and implemented. 

Evaluate: This phase often involves collecting customer feedback on the new product or service.

What is NPD?

NPD is the complete process of bringing a new product or service to market. It is often defined as the transformation of a market opportunity into a viable product for sale and consumption. There are eight major steps in the new product development process: idea generation, idea screening, concept development and testing, marketing strategy development, business analysis, product development, test marketing and commercialization.

Idea generation: This step may involve the generation of hundreds or even thousands of ideas. The ideas can come from either inside the company (internal idea sources) or outside the company (external idea sources).

Idea screening: In this step, the good ideas are separated from the bad ones. Only the best product ideas are turned into profitable products.

Concept development and testing: The best ideas are developed into a product concept, which is a detailed version of the new product idea. It is then tested with groups of target consumers either symbolically or physically to find out if the product idea has worthwhile customer appeal.

Marketing strategy development: In this step, a new marketing strategy for the product is developed. This involves a description of the target market, an outline of the product’s planned price and a plan for long-term sales and profit goals.

Business analysis: This fifth step involves a review of the sales, costs and profit projections for the new product. This helps to determine whether or not these factors satisfy the company’s objectives.

Product development: This is where the product concept – having passed all the necessary tests – is developed into a physical product to ensure a viable marketing offering can be created.

Test marketing: In this step, the product and its proposed marketing strategy are tested in realistic market settings.

Commercialization: In this final stage, a new product is introduced to the market.

For more information about NPI and NPD, please don’t hesitate to give Flux Connectivity a call at 1-800-557-FLUX or email us at connect@fluxconnectivity.com.

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