New Product Development I Work a Financial

New Product Development

"I work a financial services firm. We products development time, a lot incremental variety. You, bundle credit card access a savings account, bundle savings account a money market account, add IRA investment option, things sort.

"I work for a financial services firm. We do new products development all the time, and a lot of it is of the incremental variety. You know, bundle credit card access to a savings account, bundle the savings account to a money market account, and add an IRA investment option, things of that sort. Explain how the new products process is relevant in my industry, and to my company. Seems like it's more tailored to physical goods. Isn't it a little misleading?"

Selling a service and selling a product is virtually identical, in terms of the steps of the product development process. Of course, the framing of the marketing campaign for an IRA vs. A new brand of pancake batter may be slightly different, but the overall step-by-step process remains the same. For example, the first two new product development phases of idea generation and idea screening using brainstorming, SWOT or other types of environmental scanning, and marketing research are required to create the idea of the new product. Then it must be determined if there is a desire and a need for a new type of financial instrument, and if the product satisfies an unmet need not fulfilled by competitors.

Developing the product and testing the product is also essential. For example, how exactly will a 'bundled' package 'work' for both the bank and the customer? This question is just as vital to answer as to how a new pancake batter will 'work' (will it be frozen or refrigerated, will it require the addition of any extra ingredients)? The fourth step, following product testing is business analysis, or determining the financial feasibility and profitability of the product. Will this product over time add financial value to the company, based upon the likely demand and costs of production? Even a service is a 'production' in terms of how much the marketing, fees, and additional employees the new service will demand.

The fifth step of the process, beta testing and market testing, is a 'trial period.' In the physical realm, this is most obvious when a company like McDonald's may test a new veggie burger in a small market, but a financial services firm can likewise do a 'test run' of a new type of credit card in one or two branches. The sixth step, of technical implementation, occurs when it is determined that a wider-scale launch is required, and involves working with suppliers; creating a concrete plan for development; risk management and contingency planning; quality control; estimating the resources needed to deploy the product, and so forth. This type of planning is necessary for both tangible and intangible products. For example, when developing a new type of financial product, planning is required depending on whether the economy sours or grows and whether interest rates go up or down -- and the likelihood of both scenarios occurring. Such technical issues (including the actual technological aspects of the release, such as how the customer will access a new account via the World Wide Web) must be ironed out during this phase for both products and services.