Have you ever wondered how a product takes shape? From the idea that sprouts in your head to the product you see on a store’s shelf, there is an entire process that brings it all together. Today, we will explore what goes into the Product development process, who is involved and why this matters.
Product development is creating a new product and getting it ready for sale, which consists of designing, planning, creating, and marketing new products. It encompasses everything from research and concept development to consumer testing to marketing.
The New product development (NPD) is the complete process of bringing a new product to market. The process doesn’t end until the product development cycle isn’t over.
New product development is described as transforming an idea into a product available. The product can be tangible (something physical which one can touch) or intangible (like a service, experience, or belief).
The product development process is a series of steps that define how ideas enter the marketplace as products. There is no one fixed plan for product development.
It can vary according to industry, business size, goals, and product type. However, we have listed the 7 core steps of the product development process.
You can break down the product development process into seven steps: ideation, research, planning, prototyping, sourcing, costing, and commercialization.
Here’s a complete breakdown of every single one of them.
The first phase of the new product development process is the idea generation stage which involves businesses coming up with ideas for developing new products.
This stage is used to create a broad base of ideas and then narrow them down to those that are viable. Companies use many methodologies to help generate ideas to improve existing products or create new ones.
Brainstorming is a popular technique used to gather a variety of solutions from several people in an organization. To start a brainstorming session, a group of people who know the subject matter should gather in an informal setting.
It’s essential for everyone to feel comfortable sharing their ideas, no matter how absurd they may seem at first. The main goal is to keep all ideas on the table so you can find ways to work with them later.
It’s okay for them not to be perfect because this step aims to generate plenty of ideas and sort them out later.
TIP: If you want prompts for brainstorming, you can use the SCAMPER model. SCAMPER Stands for Substitute, Combine, Adapt, Modify, Put to another use, Eliminate Reverse/ Rearrange. Try finding a product that substitutes an existing product or developing a product that combines two use-cases- a Phone case that charges your phone, etc.
Emphasize Customer Problems
Another way to find ideas is to look into customer problems. It is better if you can identify real-life customer problems. All you need to do is focus on that specific problem and build a solution around it.
Many successful entrepreneurs have asserted the importance of building a business around a problem-solution model.
Filter the list
Once you have made a list of ideas, it is time to filter it. There are many ways you can do it. But the 4U approach by Michael Skok of shortlisting your business ideas is probably the best way out there.
The 4U stands for Unworkable, Unavoidable, Urgent, and Undeserved.
Once you have chosen a glaring problem that you would like to address, it’s time to develop the solution. The ideation process involves both identifying the problem and finding the solution.
Find The Solution
Finding a solution for a problem is the beginning of how you will build your business. Every issue has a cause and its effects.
Your goal should identify the cause and minimize or eliminate the effects. But how do we find the solution?
You need to
When you have found a viable solution to the problem, it is time to build a market strategy. But you can only do it by doing thorough research.
In the previous step, you brainstormed and researched product ideas. Now it’s time to validate those ideas to find if there is a market for them. Product validation is a vital step because it ensures your product is market worthy.
The research you conduct in this stage is crucial. You are testing the market, and you are reading the target audience. You want to ensure that you do not spend thousands of bucks developing a product that doesn’t sell. How to validate your product?
Planning is a significant step in product development processes. A business plan can provide a general overview of all involved from an economic standpoint in launching your new product or service.
It establishes how much money you'll need to invest in making your venture profitable.
Your business plan should include:
The planning stage is more about decision-making than implementing as you choose your goal, product design, budget, and management. The next stage is all about implementation.
In this stage, you create the mock-up or the beta version of your product, which you test out. A prototype is a test of an idea. To paraphrase a famous quote by Albert Einstein,
Prototypes are not supposed to be beautiful; they are supposed to work.
The goal of prototyping is to try and create the finished product which is ready to be rolled out into the market. Now that you have your assumptions down on paper and have validated them, it's time to create a product prototype that can potentially address all these assumptions.
If you're building a digital product, this step could also be called "building a beta version." If you're making something tangible, this step is your prototyping phase. Prototyping is all about validating your product. Here are some tips for prototyping your product:
Sourcing is one of the most critical steps for any business, getting you closer to getting your product to the market. Once you have created a product prototype, you need to find good supplies, materials, and a trustworthy supplier.
If you don’t choose the right partner, you may deal with a nightmare of delays, defects, and even fraud. Your supply chain may be much simpler if you’re creating a digital product, like an app or a website.
You'll need to work with developers and designers to make your product.
However, if you're manufacturing physical goods, you'll need to build a more complex supply chain. Generally speaking, there are three types of sourcing options:
Types of Sourcing
How to choose a manufacturer
You can choose manufacturers or suppliers based on your needs and choice. But it's essential to evaluate potential vendors on several factors:
How to find a manufacturer
The best way to find a manufacturer is through networking with other entrepreneurs in your industry. Visit industry trade shows to start building relationships and ask for introductions from people you meet.
Word of mouth is still the most effective way to find a reputable manufacturer because you can get an honest assessment of their capabilities and quality of work.
Costing is the process of determining how much something will cost. When you make your first product, you may not know exactly how much it will cost to produce. But as you get along in the process and begin planning, prototyping, and sourcing, you will get a clearer picture of what it will cost to produce your product.
Your product may be a complex or straightforward item. The more complex, the more materials are needed to create it. For example, a T-shirt will require little material while a pair of shoes requires more material.
But you’re not just adding up the cost of materials, though; there are a lot of factors to consider when determining your COGS. You’ll want to be sure to include all of the following in your costing process:
It's important to remember that there are MANY different ways to do the costing. You can take a few basic steps, but ultimately, you should do what works best for you.
You can make a spreadsheet, note down all the costs, and calculate the total COGS. Once you have determined the COGS, you can subtract it from the selling price to get your potential gross margin or profit.
You’ve taken your product from idea to prototype, to manufacturing, and finally to a full-fledged product. It’s time for the world to see it! But how are you going to put your product out there?
There are many ways to get your product in front of consumers.
Get creative and make sure your product reaches the right target audience. If you know how to market your product right, you can almost sell anything!
When you have an idea for a new product, it is vital to consider the following aspects before starting the development process.
You need to know where your customers are because you will not find them if you do not know where to find them. And if you do not know where they are, you will not be able to sell your product to them.
If you want to reach your customers and sell your product, you must know who they are and their needs. Pay attention to
Suppose there is already a product in the market that fulfills the same function as yours.
In that case, you should consider whether it has enough potential to be successful or if it is better to abandon the project altogether.
It is also essential that you know how your product's competitors operate since this could influence how you develop yours.
Your product may be better than theirs or worse; either way, knowing what they offer can help you improve your own product.
Study your competition, keep track of their moves, stay ahead of them, and try to offer something more than the competition.
It is impossible to develop a product without money. Before starting the process, you should be sure that you have enough money to see it through until the product is sold successfully.
We recommend having at least three times more than it would cost to develop the product since costs can quickly spiral out of control.
If there is no demand for your product, your entire idea will fail. It is crucial to determine whether or not you are in a market with many competitors and how much competition there is.
If this is so, then what makes yours better than theirs? If there isn’t anyone else in the market, then ask yourself why that might be and if you can exploit this gap in the market.
A great idea can be ruined by poor production or lousy marketing. Simple things like getting the proper packaging or choosing a name that doesn’t match your product can make all the difference between success and failure.
Try to think about these things before you start anything and find out whether or not they are possible to achieve.
The product development process has been proven to be one of the most valuable product development processes for small and large businesses alike. It is a systematic and strategic process to bring an idea to reality.
The whole process is divided into stages, with each stage having a set of defined steps and activities.
Here are some of the benefits of sticking to the Product Development process:
If you follow the proper process, it can reduce your time to market. If you do not know what you need to do, it could slow down the entire process. When you follow a proper step-wise procedure, you know what has to be done next and in what order.
This also helps reduce costs because if there is no delay in one phase, it won’t cause a delay in another step, leading to unnecessary costs.
The opportunity cost is what you lose by choosing one option over another; by avoiding mistakes early on, you can reduce or even negate this cost and make your project more efficient and effective.
By creating a plan at the very beginning and sticking to it, you’re going to be able to avoid mistakes that could lead to technical debt, which is when developers have to correct their errors and pay off any interest continually.
The first step of the product development process is research and testing. You need to do extensive market research and competitor analysis to see where you stand.
This will also help you understand your customers better and how they will react to your product or service.
Once you have completed this step, it is easier to test the technical feasibility of your idea.
When you are conducting your research and testing phase, this is when you complete surveys with potential customers who fit into your target audience profile.
You ask them questions about their needs, their problems, what they are looking for.
By following a protocol, which helps you understand the requirements and risks involved in building a new product, you will have a better chance of creating something successful.
Popstar Selena Gomez launched rare Beauty on September 3rd, 2020. It took Selena 2 years to plan and launch her makeup brand. She intended to create a beauty brand beyond physical products, and she wanted customers to feel good in their skin. She created Rare Beauty to challenge the beauty myth of physical perfection.
Pepsi is one of the oldest food and beverage brands in the world. It was first developed in 1898 and was patented in 1902. Since then, Pepsi has become synonymous with cold beverages. But since the product reached its maturity, it has to follow a new product development process.
There are many recommendations it can follow, for example:
Pepsi has begun using SftS ( Sustainable from the Start) tools to calculate environmental footprints for approximately 25 percent of the company’s top-selling products made and sold in markets today.
Sophia Amoruso started her journey in 2006 from just a laptop and eBay account by selling vintage finds.
But soon, she became unpopular because of reselling stuff at high prices, and she also lost the trust of eBay.
But she bounced back and developed her own website, Nasty Girl, and became a huge success.
However, it wasn’t smooth sailing for Nasty Girl because it went bankrupt in 2016. Thanks to the partnership with Boohoo, however, the brand is still alive. T
here are many lessons you can learn from Nasty Gal on how to plan your business better.
Go Pro was developed by techie Nick Woodman who identified the gap in the market. He realized that there was no equipment in the market to record high-quality motion videos.
So, he first tried to develop the product. He planned the process then raised funds in 2002. After that, he released the first product in 2004 - a 35mm waterproof camera you could strap to your wrist. Nick followed a well-defined product development process to ensure GoPro became a success.
Uber might have branched out to Uber eats today, but the company started with one primary goal -a more straightforward ride-hailing process with simplified payment processing.
But soon, Uber read the market needs and developed ride tiers like budget, luxury, etc. With the proper market study, you can also create an innovative product.
The seven stages of Product development are idea generation, research, planning, prototyping, sourcing, costing, and commercialization.
You can develop new product ideas by doing market research, brainstorming, social media polls, following Google trends, etc. The easiest way to come up with a product idea is to address a real-life problem and find a solution for it.
The product development process starts with product ideation and ends at delivering a product for the customer.
In comparison, Product management is a job that takes care of the entire lifecycle of the product - from ideation to improvement and maintenance of the product. It's not a one-time activity, but it's more like a continuous process that goes throughout the product's life cycle.
Remember, not all products are created equal, and it’s essential to make sure you’re aware of which process works best for you and your product.
Once you have an idea, have a plan in place so that once you release it into the wild, you can start making money as soon as possible. There’s no point in having a great idea if you don’t know how to develop it into a successful product!