How to Develop a Product? 8 Stages which are crucial in Product Development.

With the rise of businesses as well as people individually developing products, there is a need to understand how products are actually developed and how a successful product can actually be developed.

Before diving deep into how a product can be developed, let us check out the meaning of product development.

So what exactly is Product Development?

According to The Welding Institute,

"Product development is the processes required to bring a product from being a concept through to reaching the market. There are many steps required to take a product from the early stages in the product development process, from product idea generation and market research through to research and development, manufacturing and distribution."

Basically, Product Development involves forming an idea and converting it into a profitable reality.

A product needs to be developed by an organization to be stable in the market, survive in the market or grow in the market.

A product may also be developed because of the following reasons:

1. Decline of the Product Life-Cycle of an Existing Product: Every product in a company has a Life-Cycle which consists of four phases:

•             Introduction

•             Growth

•             Maturity

•             Decline

These phases are determined by the sales/demand during that time period. If the product reaches the decline phase, the company needs to evaluate the product and find ways to improve the product/develop strategies for the product or it would need to start a new product development process.

2. To satisfy the unfulfilled needs of the customers: The customers may suggest/demand a product from the company, and if the idea seems feasible, the company may develop a new product.

3. To lower the price of the product: The company may need to develop a new product if the price of an existing product is extremely high for the customers.

4. To follow up with the market trend: The market trends keep changing, and innovation is needed to survive in the market. Newer products need to be developed to retain the customers as well as the goodwill.

5. To have an edge over the Competitors: The company needs to have an edge over its competitors, so it is essential to develop a new innovative product and analyze what the customer actually wants.

6. Obsolation of an existing product: Some products may not be in demand anymore and might be deemed obsolete in the market, so the company must bring out new products to stay in the market.

Product Development Process

The Product Development Process involves stages that convert an idea into reality. It includes Systematic decision-making related to all aspects of developing and managing the organization’s products. Therefore, new products are created as a result of an idea or perceived gap in the current world. The process usually arises from a need or want that can’t be immediately filled and leads to the question why isn’t the particular product created/sold by me? Also, the product can be a new invention or can be an innovation to an existing product.

There is a certain process we need to follow to develop a successful product in the market. There are 8 vital stages involved in Product Development every product needs to go through to be brought to market. These stages are as follows:

1. Idea Generation: It is the first stage in the product development process which involves coming up with ideas. No idea is ever a bad idea. Ideas can be generated from internal as well as external sources:

•             Internal Sources

The internal sources of idea generation include brainstorming, mind mapping, research & development team, ideas of the employees, researching about certain articles, researching about the needs around, and finding the solution to the needs, researching about the target market, and much more.

•             External Sources

The external sources of idea generation include customers and their feedback/suggestions, crowdsourcing, suppliers, and distributors (who are aware of the market and can suggest and help generate ideas), conducting surveys and going through the competitor’s product.

Ideas can also be generated through the SCAMPER Technique (An Acronym) – Substitute, Combine, Adapt, Modify, Put, Eliminate, and Reverse.

From the above sources, a lot of product ideas can be generated. Everyone has an idea but taking an initiative before someone else makes the idea valuable.

2. Idea Screening: After a lot of ideas are generated, we need to shortlist the idea which would be perfect to be converted into a product. For this, research needs to be conducted to check which idea the organization can go ahead with.

The ideas need to be well-studied and investigated for which the focus should be on the following factors:

·         Whether the company can buy/sell the product

·         Whether the idea is worth pursuing

·         Whether the company can achieve success with the idea

·         Whether it can be put to reality

We need to cut off the concepts not aligning with the market trends, user needs, company values, and profitability.

For considering a viable and well thought out idea, we need to conduct fail-proof testing, cut off unprofitable ideas,

We also need to check the feasibility, budget, company values, user needs, basic requirements as well as the competitive advantage of the idea

To make evaluation more measurable, we can consider the visual matrix where we can take the ideas and assign values from 0 to 10 for each idea

After generalizing various ideas we can identify the good ones, choose them and drop the not-so-good ones. If the research finds that idea is worth pursuing and is doable, the product development process begins.

3. Concept Development and Testing: In this stage, a rough sketch is developed and the idea is further analyzed. Factors like Convenience, Simplicity, Quality, User Expectations, Pricing (Price at which a customer is willing to buy a product) is further considered in this stage. The target customers are approached and are asked to share their response/feedback/suggestions about the product which is going to be developed. If the majority of the target customers like the idea, then we move on to the further stages.

4. Business Analysis: In this stage, the company analyzes and decides whether the product is profitable or not. The company evaluates the time taken for the product to reach its breakeven cost. The final decision is taken regarding the product after business analysis.

There are various factors involved in Business Analysis which are as follows:

·         Product’s demand

·         Product’s  Cost

·         Product’s  competitiveness

·         Product’s  profitability and expected sales

·         Overheads involved in making the product

·         Processes & Standard techniques it needs to go through for it to be a Finished Product

·          Guidelines to be kept in mind while formulating the product

·         Various aspects of the product

·         Whether the product will achieve desired objectives or not

·         The expected life cycle of the product should also be considered while conducting the business analysis.

5. Product Development: At this stage, the actual product is finally developed. However, it is made in small quantities for test marketing (which is the next stage).

The actual product is manufactured and designed in this stage. The manufacturing can consist of 20-30% of the effort and the design should be consisting of 70-80% of the effort. Product design plays an important role in product development as it can be the major USP (Unique Selling Proposition) which will make it stand out from its competitors.

Various aspects are considered in Product Development like: Quality, Efficiency, Utility, Convenience, Ease, Ergonomics, Design, Materials to be used, Dimensions, Physical Shape, Price Quality Cycle Time and much more

If possible, the product is further optimized and made more efficient. The Scope of Design Change is also encouraged.

6. Test Marketing:

In this stage, the product is finally launched to its target market at a small scale, and large-scale production shall be planned if the product has been successful and demanded by the customers. If the product does not receive positive feedback, then the company should strive to correct the possible errors and find out about its shortcomings. If the product again receives negative feedback, then the company is not encouraged to go ahead with further production.

Marketers do this to analyze whether the customers are interested in purchasing the product and whether a good response is received from them. They only distribute their product in target markets and particular segments. They do not directly launch the product on a large scale to prevent competitors from taking advantage.

7. Commercialization:

When the company receives a great response, it starts the commercialization process. This process is crucial because, without this process, the product may not be able to reach its potential customers due to lack of marketing and lack of supply. In this process, the company produces the product at a very large scale and officially launches it. It uses marketing and advertisement strategies to attract the target consumers of the product to buy it.

The following questions can be analyzed:

·         When can the product be launched?

·         Where can the product be launched? (Target Market)

·         To whom can the product be sold? (Target Customers)

·         How can it be launched?

Different Segments have a Different Approach for commercializing their products. Some segments can have a plethora of approaches and the best approaches should be selected.

8. Review Market Performance:

Lastly, the market performance of the product is thoroughly monitored and tracked. The customers are approached for feedback on the product, and customer satisfaction level is analyzed. The demand, sales, profit, competitor’s products, product life cycle, and much more is analyzed. The sales change is also looked at and strategies are developed to ensure sales. The product is further innovated and re-formulated if necessary for it to sustain itself in the market. New features may also be added to the product if necessary.

Conclusion

Product Development is a long process, and if all the eight stages are followed appropriately, then a product can have a good chance to achieve success unless there is an uncontrollable issue arising. The needs are to be considered to form a profitable product. It is essential for the growth of everyone. In today’s world, Product Design also plays a very important role in Product Development.

A product is also successful if the quality is maintained at a reasonable cost at an appropriate time, and if the capacity as well as the resources available are utilized well.

A product must have desirable attributes for its target market and it should also be unique as well as sustainable. Product development is essentially transforming an idea into reality.

Products can fail too because ideally, an extremely low percentage of ideas can actually succeed, companies can also end up overestimating the market size. The design might be poor or have an incorrect positioning. Wrong timing, extremely high price, ineffective promotion, management influence, high development costs, competition may also lead to product failure.

To prevent the failure of a product, certain aspects should be taken care of. The 4Ps – Price, Product, Promotion, and Place of the marketing mix should be understood and implemented. Sufficient surveys and interviews should be conducted before making the product. Research and Data Analysis about the market should be done. We need to also understand the customer and the reason why a customer should use the product. Strategies need to be developed to make the product profitable as well as useful for the customer. Product delivery should be ensured. A SWOT analysis should be conducted. Suggestions should be considered and changes as per customer’s requirements should be made.

Behind a great product is a great vision. A great vision is implemented when everyone in the company is aligned with it. With the relevant skills, analysis, strategies, tactics, financial evaluation, and much more, a profitable product can definitely be developed.