Cafe41 -I wanted to say that a great deal of strategic product planning takes place.
Not only are there customer surveys, but companies do an analysis of their competitors to see how their potential new product fits in to their current product assortment and their competitors as well.
After this phase a complete product gets tested again with a targeted focus group to try out the product and provide feedback.
If the feedback is good then the product launch planning stage begins. Usually the product will be launched in a single city in order to determine if the product is ready for a full national release.
If the sales are strong in that initial market then the product gets launched nationwide.