Product development is important why? Consumers now are becoming choosier when it comes to selecting a product. With increasing competition, an organisation has no choice but to search for the latest thoughts to be able to come up with the newest products to fit the situation.
For a company to grow and stay relevant, it needs to offer an innovative product line-up. Although, new products don’t just fall out of the sky. They need to be carefully engineered and developed.
A firm must proceed in a systemic way from one stage to the next. This advance is made up of seven steps.
1. Generating an Idea:
The approach to a new product begins with formulating the idea of a product. An idea for a new product can come from any of the following sources:
Customer: New ideas are born out of the needs of customers which require solutions. A customer can give suggestions or point out gaps in your product. As one of the marketing departments aim is to fulfil the needs of a consumer, a watchful marketer can get new product ideas from customers by being attentive and by keeping an open mind, recognising the needs which have as yet not been expressed.
Competition: A new product or service can be launched by a direct or non-direct competitor. Using the information as a clue and innovating the product or service, a company can formulate an idea and start its own experiments with it.
Company Sources: Ideas can come from a company’s own distribution channels, an example is the companies salespeople. These ideas warrant further investigation as these company distribution channels are in direct contact with the market and in a position to detect an unfulfilled need. Likewise, a new technical breakthrough can be proclaimed by the companies own R&D or innovation department. New ideas can be put forth by company managers who keep on thinking of new and better ideas. Brain-storming sessions are also practised in some companies to generate new ideas. These are carried out by people across all levels of the organisation.
2. Idea Vetting/Screening:
The next stage is screening the gathered ideas for their value. At this stage, the product ideas collected undergo a critical evaluation. An ideas appraisal allows you to see which ideas are suitable for further researching and which should be abandoned. There will be a lot of poor ideas, identify and scrap these quickly, do not waste resources. Every idea has to be compatible with the firm’s short and long-term strategy as well as a companies limitations. Also keeping in mind that a technically solid idea may not be suitable for a company, due to the large capital it requires, or if the idea goes against the companies branding or ethos.
3. Concept Development and Testing:
Once an idea passes screening, it is expanded into the companies business proposal. It should include specifications about target consumers, the exact need that has to be fulfilled, and the way in which it will be fulfilled, the benefit it will bring the consumer and the price of this need-satisfaction for the customer.
The idea now needs to be presented to the target market, as far as feasible and their feedback gathered for further assessment. The idea developed in this way has to be assessed in a wider point of view which includes sales and profit capacity of the completed product line.
4. Business Analysis:
The continuing process of product development requires a very detailed appraisal at the Business Analysis stage. The task is made up of projecting the impending demand, expenses, sales, investments, and return.
5. Product Development and Marketing Strategy Development:
The idea at this stage in the process has been exhaustively vetted and analysed. It is time to transform the concept into a product. Turning the abstract concept is given a solid shape, with all the required traits that were previously assumed. The effort is put into creating a prototype or minimum viable product (MVP) of the anticipated product. This will allow the determination if the concept has the required technical capacity and if the firm can generate the required technology. The aim of the MVP is to create a product prototype that is as close as possible to the consumer product expectations and specifications.
In addition to the progression of product development, the tentative marketing approach has to be developed by the marketing department of the company. A proposal regarding the pricing policy, promotion, and supply strategy of the product has to be made.
6. Market Testing:
Once the idea of the product has taken the shape of a MVP and a provisional marketing programme had been designed, the company can step into commercial manufacture and circulation in the market. However, a marketer will not render open to an unnecessary threat and should work towards an affirmative market response. ‘Test marketing’ – this type of product testing allows for additional customer feedback so that any required changes in the MVP can be made along with the proposed marketing strategy (if it’s required).
Using the information collected in test marketing, the product is accordingly modified and improvements made, and approach regarding distribution, pricing, and promotion are refined. Finally, the product is ready for general market release.
Related Blog: Reasons for Product Failure.
About the Author:
A founder of multiple startups Hader Ali is an innovation & business consultant.
Hader Ali Consultancy works with startups, SMEs, and large organisations. Specialising in business strategy, product/service development, sales & marketing.
To future-proof your business. Hader Ali Consultancy will work with your company to create an innovation portfolio by providing a framework for structured innovation. All while creating an ecosystem of ideas and a culture of innovation.