Products are everywhere!
Every product you have heard about or perhaps use daily was once an idea before it gained popularity in the market. Once an idea hits up, a series of stages follow along in the product development process to make the product market-ready.
What is Product Development?
The product development process refers to the business strategy used by companies when they launch a new product or rework the existing product already in use. As revenue grows, the product eventually accelerates heights.
Many companies, generally startups, develop and build products from scratch. These companies focus on providing their end-users with a unique product with distinguishing features and exceptional functionalities. However, many companies choose the product development process to rebuild existing products with compelling, distinguishing, and stand-out features. They aim to rebrand the product or launch a new complementary product to the existing ones.
Product Development Process Categories
Categorizing is essential regardless of the strategy you prefer for the product creation process – introducing a new product or redefining an existing product. Dive into the list of product development categories brief:
StandardizationStandardization is a product creation process of manufacturing and selling products consistently. It entails ensuring that a product meets a specific set of criteria in each market, such as item quality, service delivery, or aesthetics.
The art of compressing as much functionality as feasible into the lowest number of chunks while using the most efficient and cost-effective design and manufacturing processes is known as product simplification.
When the business focuses its marketing on a specific brand, it is categorized under specialty. Here, the main focus is on the benefits and quality of the product post-production.
Diversification is a technique used to increase profitability and increase sales from the newly launched or revamped product.
Stages of Product Development
Product development is a step-by-step process. Every product development phase requires strenuous efforts, focus, and attention. Businesses that fail to skip any product development stage are likely to die quickly over their peers who follow.
Research and Development
R&D, also known as market development, is the initial yet most crucial stage of the product development life cycle, especially if you are building a technical specifications product. Market testing, research, and competitor analysis, to name a few, are excellent ways to make this initial stage a success.
The introductory product development phase is the point when the product hits the market. However, sales are pretty low because the product is in its initial stage. Marketing expenses are high because a lot of effort is needed to bring awareness to the market. Strategies are set up to establish a market and generate demand.
Next to the introductory product stage follows the growth stage. Here, the prime focus is on product growth, enhancement, and increasing market penetration. Companies can keep customers engaged by introducing new features, discounts, and designs because this is the most profitable time for the company.
Tip: As more people use your product, you'll need to increase your servers, cloud processing, and databases. You are building business plans and ready for the big show to avoid disturbance when handling the audience in bulk.
The company is starting to realize steady results over time. Using the stats, the company can tell if it is going through a red zone and whether it is time to innovate a new product. At this point, the product has justified its success rate, and the company can learn from the model. Even if the company decides to invest more in product R&D, positive results are not guaranteed.
Perhaps, the last stage of product development. The product is going through a decline stage. Comparatively better products have outperformed products in the market, leaving no room for competition. The company goes through a decrease in profits and revenue. Additional marketing does not help the company. The best solution is to let the product out of commission and reformulate investments in product development.
Is Product Release Always Successful?
No! Not all products launched and released in the market achieve success. Only 10% of products released in the market qualify the success graph, and the rest, 90%, fail. Building great products that cater to customers' needs is hard to crack, especially if you are a startup developing something new from scratch.
Top reasons for product failure:
- Failing to understand customers' needs
- Not solving the existing problem
- Quality isn't up to the mark
- Faulty distribution policy
- Not targeting the right audience
Expert Tips to Improve Product Development Process
Learning from the mistakes of entrepreneurs is a great way to be alarmed and take your moves wisely. Here are the steps of product development you must use to make your product a success.
Pick a Common Language
Using a common language prevents confusion from jargon used to refer to the product development process. This is likely more beneficial if you are designing a technical specifications product.
Choose the Right Process
You should know whether you are bringing a new product or improving a product already existing in the market. The most crucial step is to have a product development strategy.
Involve the Relevant Parties
Each person in every department must understand the role that they are playing in product development. Ideas of all parties should be welcome.
Ensure Good Project Governance
You first need to establish a goal for your business and know which features you wish to add to the product. Product managers must be strong leaders who empower their teams to make difficult decisions. If you don't solve difficulties, delays will build in, and as a result, the whole group's efforts get jeopardized.
Result-Driven Ways to Streamline New Product Development Process
The first step in product development is the generation of an idea. Before a company starts investments in product development, it needs to have a clear and detailed vision of its project and ideas. The company needs to define the problem they are going to solve. They need to look at their competitors and the issues the competitors face, and how they can solve those problems. This stage is about generating ideas that are ready for implementation. The company needs to know the user needs the product solves and who the product is specifically meant for.
The next step is to look at all the ideas, filter them out, and remain with the best. To validate a statement as the best, a company may opt to send online surveys and research for demand online by opening social pages where you can gauge customer engagement by letting them pre-order the product or signing up for emails about the product.
A SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is also a good product research approach when shortlisting ideas. It is best to select an idea whose strengths and opportunities outweigh the weaknesses and threats to your business plan product.
Brainstorm a Business Plan
If you are building business plans before designing the prototype, it works. The business plan should incorporate all economic elements associated with the product's development, promotion, and sale. It is best to hand-drawn sketches of how you want the product to look. Keep the illustrations detailed to prevent them from getting lost in the subsequent steps. Your business plan will aid in the analysis of development costs, the creation of a sales pipeline, and related post-launch expenses.
Create a Prototype
The aim of creating a prototype is to create a sample of the finished product. The prototype is what will be used to test for flaws and usability. A company can show possible investors its prototype and use it for marketing purposes.
With advancements in technology, prototypes can easily be created using 3D printers. Companies should aim to make their prototypes as attractive as possible as they are the cornerstone for the subsequent product development steps.
Build your Supply Chain
After creating a prototype that you are satisfied with, the next step is to source the materials you will need and look for production partners. It is best to look for different suppliers for the materials you need to compare costs. Options open for multiple suppliers offer backup if one of them backs out.
Fix Product Costs
Fixing your project cost is an essential step that new businesses must follow when launching or recreating an existing product. Estimating the total cost ensures that the Cost of Goods Sold streamlines with the retail price and gross margin. In the long run, it helps if you had to break down all the expenditures like raw materials, manufacturing and shipping, importation fees, and duties. All the expenses you incur are a significant part of your cost of goods sold.
Once you have created your cost of goods sold, you can come up with the prices of the commodities while factoring in the profit and possible gross margin on each item sold.
Perhaps, this is the last step in product development that involves handling the business plan product over to your marketing team for marketing purposes. The marketing team may market the product on social media, by sending emails to subscribers, or even by use of advertisements. This step marks the onset of the product life cycle.