Product Development is the total process that takes a service or a product from conception to market. The creation of products with new or different characteristics that offer new or additional benefits to the customer. Product development may involve the modification of an existing product or its presentation. Formulation of an entirely new product that satisfies a newly defined customer want or market opportunity is also a part of the product development process.
Moving ahead it's very crucial to understand why a product is developed, what are the goals and objectives behind its development. From creating a prototype to building products every step plays its roles thus it becomes highly important to recognize when and how a process should be developed to accomplish the targeted goals.
Let's understand these three major processes and their importance in the product development cycle.
Why Product Development:
- To maintain and build sales through replacement products
- To shape the Company’s future
- To fulfill the ever-changing customer's preferences
- To create stars and Cash Cows for the future Market
- To fill Gap in the Market
When Product Development:
- Once the company has segmented the market carefully
- Chosen its Target Group
- Identified their needs/ Preferences/ Requirements
How Product Development:
- New Products range from new-to-the-world products that create an entirely new market o minor changes into the existing products which need employee contributions to study the Product deeply.
- Products can be added through:
- New Product Development
- New-to-the World Product
- New Product Lines
After understanding the theoretical aspects of why a product is important and when and how it should be developed a developer must understand the detailed process of product development from the stage of idea generation till the commercialization of the product.
8 Stages of Product Development Process
Idea Generation and analysis of product: The Product Development Process starts with Idea Generation. Idea generation refers to the systematic search for new-product ideas. Typically, a company generates hundreds of ideas, maybe even thousands, to find a handful of good ones in the end. Following are the ways to find Ideas:
- R & D
- Senior/Top Management
Various Techniques used for idea generation: Ideas can be generated by the following creative techniques:
- Attribute Listing
- Forced Relationships
- Customer Needs
Idea Screening and filtering: Ideas generated need to be screened for action. To start with ideas are sorted into:
- Promising Ideas
- Marginal Ideas
- Promising Ideas are evaluated by a committee
- Surviving promising ideas are screened through a process
- The objective is to drop the poor ideas
- Ideas are screened through Project Ideas Rating Process
- Product Ideas
- Product Concept
- Picture Image
Example: A company wants to make a food powder that is nutritious and tasty. Now to convert to the concept there are a series of questions like For Whom, Primary benefit When to take
- C1 - Instant breakfast for working professionals who want quick food
- C2 - Tasty snack for children
- C3 - Lunch/Dinner item for elders
- Communicability and Believability
- Need Level
- Gap Level
- Perceived Value
- Purchase Intention
- Purchase Frequency
Marketing Strategy Development for the product: Marketing Strategy Statement consists of three parts:
Part A: Target Market Size/Structure/Behaviour, Planned Product positioning, Sales/Market Share/Profit objective in ⅔ years
Part B: Product Price Planned, Marketing Budget
Part C: Long term sales/profit goals
Marketing is one of the major product commercialization. For effective sales and benefits, a well planned and executable marketing is required. Here are a few tips for the marketing strategy of a product.
- Listen to relevant social conversations for pain point and nonexistent solutions,
- Conduct your traditional research strategies such as A/B testing, polls, focus groups, and so forth such point
- Check your competition to make sure your idea is unique and to analyze their failures.
- Start Product Marketing Early
- Share on Website and Social Media
- Get Your Team On Board
Cost of Development
This is the time when an idea has to give the shape of a prototype or product development is initiated. There are few pointers that a company or the developer should always keep in mind:
- The company now see that the product idea can be technically or commercially feasible
- The details related to the product is provided in detail to the development team
- Stages in Product Development
- Prototype Development
- Functional Testing
- Consumer Testing
- Brand Name, Logo are now been decided
- Not all companies do this but Tata Indica has done this when they introduced Indica V2
- Methods of Market testing
- Sales Wave Research
- Simulated Test Marketing
- Controlled Test Marketing
- Test Marketing
- Launching a Product on a commercial basis
- For launching a Product following decisions to be taken:
- When to Launch
- Where to Launch
- To Whom
- How to Launch
- Commercialization Strategy:
- What’s the offering? (What are you trying to provide or create?)
- Business plan and forecast
- Commercialization risks & issues
- Don’t use a “Ready, Fire, Aim” commercialization strategy
- When a high-level executive forces his favorite idea even when the research finding is negative. Ideas generation of nay product should be based on concrete R and D and must be implemented with supporting facts and figures.
- In spite of a good idea, the size of the targeted market is overestimated or especially when microelements are ignored in the market research and its testing.
- Designing or creating a prototype is very essential in the process. Poor product design often leads to misinterpretations of the product and thus hamper implementing the core ideas in the development process.
- Competition analysis plays an important role in the cycle. Competitors fight back harder than expected leads to unexpected failures or reduction in the market size.
- When the cost involved in the development of the product exceeds the estimation.
- When the product is positioned incorrectly in the market, or not advertised effectively or when overpriced
- Technical Problems in Product
- Shortage of ideas in certain important areas
Product development is one of the core functions of any company or organization. An effective process of product development not only helps in improving work efficiency but also enhances the monetary benefits of a company. A well-organized approach adds brand value to the company and directly influence the relationship-building with its clients.