From the first idea to the final product launch and marketing to its target audience, the product development process necessitates a lot of steps. We’ll look at these steps in this article, with examples of cases where the product development process was implemented.
What Is the Product Development Process?
The product development process includes all phases necessary to bring a product from concept to market availability. Identifying a market need, investigating the competitive landscape, envisioning a solution, designing a product roadmap, building a minimal viable product, and so on are all part of this process.
Who Is Involved in the Product Development Process?
Product managers often lead the product development process from a strategic approach because they are ultimately accountable for the success or failure of the company’s products. However, this is not exactly a product management function. Product development necessitates the efforts and contributions of numerous teams across an organization, including:
- Development
- Design
- Marketing
- Sales
- Finance
- Testing
Product managers serve as the development process’s strategic directors. They assemble the cross-functional team, explain the product’s big-picture goals and plans (via the product roadmap), and monitor the team’s success.
What Are the Systems for The Product Development Process?
There are various common systems for developing new products. Here are a few framework examples that offer specific product development process steps.
The Design Thinking Method
Design thinking is a framework for creating new products that begin with identifying an issue or need from the user’s point of view. The steps in the design thinking process are as follows:
- Identify with users.
- Identify the issue
- Generate ideas for potential solutions.
- Create a prototype
- Put your solution to the test.
The New Product Development Process Framework
This is a common composite product strategy used by firms to build physical items, as opposed to digital products such as software. The NPD framework has numerous versions. Some businesses take a five-step method, while others take up to eight stages. Here’s a popular method for breaking the process down into six steps:
- Ideation
- Product specification
- Prototyping
- Design
- Testing
- Commercialization
We’ll describe these product development process steps in detail:
Steps in the New Product Development Process
#1. Concept Generation (Ideation)
This initial step or stage of the product development process sometimes referred to as “ideation,” is when new product concepts emerge. This step is more clearly defined in new product development and is frequently the result of an idea screening to pick the next product endeavor. Businesses, in accordance with best practices, organize a small team to investigate the product roadmap and execute:
- The basic product concept definition
- Business evaluation (including SWOT analysis)
- Market investigation
- Market and technical risk
The concept stage is frequently the most crucial step in brainstorming new goods because it is where most product ideas originate. In this first step, a SWOT analysis (strengths, weaknesses, opportunities, and threats) analysis is sometimes used to prioritize concepts.
From the concept to the MVP
Often, product development begins with a product manager recognizing that sales are falling short of expectations due to the late stage of the product’s life cycle. The manager wants to act, but they don’t always have a plan. Other times, the rationale is that someone in engineering (or sales) comes up with a raw idea out of nowhere, not as a result of the product development cycle (not all products are created by product managers! ), but as a result of some independent brainstorming. Finally, it can result from a well-planned marketing strategy and product roadmap.
#2. Product Specification (Discovery)
This step, also known as “scoping” or “concept development,” entails refining the definition of the product concept and ensuring that the team truly understands customer needs. This stage is commonly referred to as Discovery in a startup. During this phase, the design team is formed. The team creates the first complete examination of the new product concept’s technical, market, and business factors and establishes core functionality. A design thinking template or technique may be helpful in getting started.
Mockups are sometimes used to get early feedback on product market fit. Mockups can be crude; for example, paper prototypes are frequently used to obtain early feedback from test marketing. The concept design can begin if this is an incremental product. The team may consider simulations to gather customer input for breakthrough products. The more idea testing is necessary; the newer the product category is to the organization. The primary purpose of product development procedures is to ensure that the ideas are good and will satisfy customers.
During this stage, concept design is frequently initiated. The design team may start visualizing the finished product and communicating it to potential buyers (in software, this is simpler than in a complex system or hardware product).
#3. Modeling and prototyping
The team justifies the company’s investment in the creation of a product during this prototyping phase) (or step) in the product development process by requiring the team to prepare a detailed business plan. Best practices typically include extensive market research and a well-defined project management strategy. The team thoroughly investigates the new product’s competitive landscape and where it fits within it while also developing a financial model for the new offering that makes assumptions about market share. Pricing is set in this step, in addition to idea testing.
For tangible new goods, such as hardware or mixed systems, the team also examines the proposed new product’s manufacturability, which includes the product’s sourcing if outsourced. If manufacturing is a priority, you should have a New Product Introduction Process in place. Senior Management should have a good sense of what they’re investing in and how it will perform in the market at the end of this phase.
This third step in the product development process (the prototyping phase) is crucial since it lowers the new product’s market risk. Because prototypes are available, you may do test marketing at this stage and receive early feedback from buyers. Because realistic user interfaces are very easy to create, software developers can do these tests earlier. The initial design work would demonstrate technological viability at this point.
#4. Extensive Design
The emphasis in this phase is on product design but also on the refinement of the product prototype. In most cases, teams alpha-test the prototype, working iteratively with clients to get input and incorporate it into the prototype. Parallel to this, marketing, sales, and production begin to develop the launch and manufacturing platforms that will support the new product. This fourth step in the product development process is frequently referred to as “development,” and it is occasionally combined with the following step, “Validation/Testing.”
#5. Testing and Validation
Validation and testing entail ensuring that the prototype functions as intended. It also entails verifying the product in the eyes of customers and markets, as well as testing the feasibility of the product’s financial model. The finished product may be accessible for early feedback from paying clients at this point.
Everything in the business case, as well as everything learned from consumers during the Development phase, is scrutinized and tested as much as feasible in “real world” situations. At this stage, the marketing approach is also confirmed. This is the team’s last chance to revise anything in the business case or prototype. This is the final process before the finished product is ready for sale. At this point, test marketing or beta testing (depending on the type of product) is frequently undertaken to help confirm the go-to-market strategy.
#6. Commercialization
During this stage of the product development process (including manufacturing), the team realizes everything needed to bring the final product to market, including marketing and sales plans (or sales training if needed) for market launch. After final testing, the finalized product will be constructed (or released in the case of software) and sold. The team, including project management, begins to operationalize the product’s manufacture and customer support and supports its debut. This is why this stage is known as the Commercialization Phase. Test marketing could help the organization achieve the best success with the launch.
Having seen the steps in the product development process, let’s look at some examples of the product development process in the real world:
Examples Of The Product Development Process
Here are some real-life examples of how the product development process works:
#1. Airbnb
Airbnb’s founders had no business or finance, but they intuitively grasped one of the most critical aspects of successful product development: validate your product concept before beginning production.
They put their peer-to-peer rental housing concept to the test online, posting information about their own flat and offering it as a short-term rental. They believed they had a solid product idea when numerous users joined up to stay in the founders’ house.
#2. Crystal Pepsi
PepsiCo made a crucial error when it debuted Crystal Pepsi, a new soda touted as healthier than the company’s other soft drinks. The company failed to validate its concept prior to going to market. Pepsi’s management was caught off guard when its full-scale rollout of Crystal Pepsi failed due to a lack of early input from its target customers and the use of a soft launch to validate the product with early adopters.
What is the Difference Between Product Development as a Startup and as a Large Corporation?
These examples demonstrate one of the distinctions between producing a new product in a startup and developing a new product within an existing firm. Because the Airbnb founders lacked funds, a large team, or a track record, they were forced to evaluate their concept with real-world users before investing time or money in development.
PepsiCo, on the other hand, could afford to invest hundreds of millions of dollars in its Crystal Pepsi debut (including Super Bowl advertisements) without first determining whether or not the clear-colored soft drink would appeal to customers. In other words, they had the resources and a corporate culture that allowed them to skip the product development stages of research, validation, MVP, and user testing. But, as it turned out, this was a mistake.
This is one reason why it can be easier to develop new goods for a startup than for a large, well-funded enterprise in some circumstances. The smaller, newer firm does not have the means to produce a product without first consulting with the product’s intended customers. It also lacks the bias that may persuade its product managers to believe they had a good proposal when, in fact, their clients would reject their new initiative based on previous accomplishments.
One essential message is to design new products as if you were working for a startup — even if you are a product manager for a large corporation. Before moving on with product development, treat each product concept as if it needs market validation.
Distinctive Features of the New Product Development Process
New product development, like any new venture, is an opportunity to start from scratch and establish effective processes from the outset. Here are some of the primary benefits of developing a systematic and well-balanced product development process:
- Creating a culture of innovation. Fresh products necessitate new concepts. Creating an innovative culture in which everyone, regardless of function or seniority, can contribute ideas can help a company explore new possibilities.
- Maintaining contact with your customers. Customers’ behaviors are always changing as a result of dynamic economies and a variety of other factors. A well-designed product development process allows you to keep up with the times and guarantees your solution is current.
- Exploring new possibilities. The product discovery strategies described later in this piece assist in thoroughly investigating the problem environment, detecting hidden patterns, seeing the picture from all conceivable aspects, and identifying chances to grow your firm.
- Providing more meaningful value to customers. A thorough study and research before the development will assist you in designing a product that better meets the needs of your clients.
- Accelerating time to market. A well-balanced new product development process assists in prioritizing customer and business demands and eliminating everything that does not add value.
- Keeping typical pitfalls at bay. A tried-and-true development process allows you to avoid pitfalls like investing too much in unviable ideas, solving the wrong problem, releasing the product too early or too late, failing to communicate the product value to your customers, targeting the wrong audience, and not having enough flexibility to adapt and change your plans based on feedback or market conditions.
What Is The First Step In The New Product Development Process?
The first step in any product development process is the idea generation stage. All other processes stem from idea generation.
What is the Product Implementation Process?
The product implementation process is the primary activity that transforms a project’s concepts and designs into finished goods. The product may be hardware, software, a model, simulations, mock-ups, study reports, or other tangible outputs, depending on the project and life cycle phase within the project.
How does a company ensure the product meets customer needs?
A company can ensure that a product meets customer needs by conducting market research, gathering feedback from potential customers, and testing prototypes with target users.
What are some challenges that companies may face during the product development process?
Some challenges that companies may face during the product development process include a lack of market research, insufficient resources, lack of funding, unrealistic timelines, and an inability to adapt to changes in the market or technology.
How does a company handle changes in the market or technology during the product development process?
A company can handle changes in the market or technology during the product development process by remaining flexible, adapting to changes as they occur, and regularly reviewing and updating its product development strategy.
How does a company measure the success of a new product?
A company can measure the success of a new product by analyzing sales data, tracking customer feedback, and monitoring market trends.
What is the role of prototyping in the product development process?
Prototyping is an essential step in the product development process as it allows companies to test and refine the design and functionality of a product before mass production. A prototype can also be used to gather feedback from potential customers and investors.
How does a company handle intellectual property during the product development process?
A company can handle intellectual property during the product development process by filing patents, trademarks, and copyrights to protect its ideas and designs. They can also use non-disclosure agreements to protect confidential information.
The Product Development Process: Conclusion
We have seen the basic steps in the product development process, along with some examples. However, it is important to note that these systems can differ depending on the product in question.
Your company plan and how you manage the process are important, but with so many variables, your decision-making, determination, and the quality of your product vision will most likely be the best predictors of your success.
Frequently Asked Questions
Why is the product development process important?
The product development process is vital for providing value for your potential clients, as well as ensuring demand and that your final products are of the greatest possible quality before releasing them to the market.
What is the role of product development in a company?
Through product development, developers create new products or improve existing ones, allowing the organization to better satisfy the needs of its customers. They employ their technical, design, and business skills to build goods that meet manufacturing and market demands.
Who are involved in product development?
Product development usually involves the product manager, the project manager, and the product marketing manager.
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- PRODUCT MARKETING STRATEGY: Overview, Examples, Job Description (+ free courses)
- The Product Life Cycle Theory: Guide to the Stages & Examples
- PRODUCT MANAGER SKILLS: Top Product Manager Skills
- What Are Consumer Products? Meaning, Types and Examples
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