New product development (NPD) is often something that businesses do on an ad-hoc basis, stopping and starting the process depending on how busy they are. NPD should be at the forefront of any business and should be an integral part of a business owner's job.

By bringing new products into your business you achieve the following:

• Create new revenue streams

• Keep your portfolio current and fresh

• Avoid customer fatigue

Looking at underperforming products in your portfolio is equally important. Many businesses make the mistake of not dropping the under-developed products and this (along with the introduction of new products) can lead to customer confusion.

Management Information is critical when embarking on NPD. You need accurate sales and cost information on each individual product so you can analyse performance properly.

Every new product should have a marketing plan attached to it. There is no point in launching a new product if customers don’t know about it. Simple things like internal signage are important.

In Insomnia we have formulated a menu where we have to stock a consistent range of product across our 98 shops, all sold at the same price. Menu fatigue can be an issue and for this reason we brought in 22 new pastry and sandwich products in the last 12 months. One which was particularly successful was the pastel de nata, a Portuguese custard tart, which was very well received.

 

Our marketing push for the new product, with social media tie-ins

In our business the best way of keeping abreast with new product development is as follows:

• Travel to the UK & USA and pick up ideas there.

• Take the time to attend trade shows with an eye to developing new products.

• Watch your competition, and watch what related businesses are doing.

• Involve the customer. Set up customer tasting panels and get their feedback.

• Use pilot sites. Test a product in 5 different locations. After the pilot period look at how well the product was recieved and either roll it out - or drop the idea.

New product development is an ongoing process in my business. Make sure you embrace it and keep your business ahead of the competition!

 

Read more advice from Bobby on www.bobbykerr.com - and hear him live on Down to Business from 11am, every Saturday on Newstalk.

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