The only thing that’s constant is change.
And we all know that to be true, even people in businesses that offer a wide range of products.
Everything has its own beginning and end. This can be applied as well to products.
No matter how successful a product you have, at some point, the lifecycle of your product will inevitably end and you will need to either improve the product or develop a new product for your customers.
New technologies, new materials, new ingredients, and new practices come into the business game all the time.
Having a single, unchanged product for prolonged periods of time can’t possibly be profitable in times when everything changes by the minute.
To be able to understand this better, I will first explain the lifecycle of a product and then get into what is product development, and what is the process of developing a product.
Stages of the product life cycle
In economics, there are four stages of a product life cycle:
The introduction of a product is the first stage that comes after the product development process and in this stage, the product is being put on the market- introduced.
The introduction stage is often the most important stage in the whole lifecycle of the product because in this stage the stakes are high and customers get in touch with the product for the first time.
Marketing and promotional activities are top investments in this stage, and feedback is appreciated.
The companies get a sense of how the customers respond to the new product, make predictions, etc.
The goal of this stage is to build a demand for the product and later profit off of its success.
When the product reaches the growth stage, it means that the customers are already familiar with the product, and their consumption increases.
Basically, the product gains popularity among the customers. The sales are increasing and the competitors are noticing.
If there is a big competition for the product, the marketing and promotional activities might also exist in this stage of the life cycle of the product.
In this stage, the product can be tweaked or slightly improved to fit the needs of the customers more.
In the growth stage, sales volumes and revenues are increasing. The goal at this stage is to keep increasing the market share of the product.
The third stage of the product’s life cycle is maturity. Once maturity is reached, the sales slow down or in some cases even stop altogether.
The reason for this is that the market is saturated.
When the product is mature, the prices start to drop and there is a huge competition which in the end results with lowered demand for the product.
Some marketing and promotional activities are present at this stage, but they are working on fending off the competition and the competitors that are less successful are pushed out completely.
This is the stage in which companies start to innovate and try to come up with new products to meet the demands of the customers and use new technologies.
The maturity stage can last a very long time, but in the end, eventually, the decline stage will begin.
Here, sales completely stop or at least drop significantly, and there is no or less demand for the product.
Marketing is here minimal or only targeting loyal customers. The prices are significantly reduced.
In the end, the product is retired because there is no more demand left.
Some examples of products like this are typewriters, DVD players, etc who are either deeply in decline stages or retired completely from the market.
After this stage starts, or even in the previous one, companies will try to get into a new product development process.
What is the product development process?
The process of developing a new product is the journey from simply having a product concept, to making the product available on the market and everything in between.
Product development is a complex process that encompasses things like identifying a need on the market, doing extensive research into the competition, making a concept of the solution, developing a product roadmap, building the product, and many more things.
The process is not only in charge of simply creating a new product, but also is about giving the product maximum value while mitigating the risks of failing because of low quality, bad pricing, small target audience, premature or delayed market entry, bad promotional support, low brand awareness, and so on.
Phases of the product development process
There is different literature out there when it comes to the product development process, and you can find a different number of stages needed for finishing the process.
In some cases, there will be five phases, six or even more- the important thing is that the idea behind them is similar in all of them.
1. Generating ideas
The first step is very logical. You can’t just wake up one day and start developing a product without having a good idea about what that product might bet.
A lot of people find this very hard. The reason is that they are expecting a great idea to just strike them all of a sudden.
Even though there are cases when good ideas come as easy as that, most of the new product development processes start with having an existing product and trying to improve that product in a new way.
These ideas can be inspired by many different things like:
- Spotting market gaps
- Discovering opportunities to improve your products
- Marketing research into customer needs
- Brainstorming sessions inside the company
- Analyzing new technologies that competitors use
- Social media surveys
The most commonly used brainstorming technique that you will find mentioned everywhere when you’re researching the product development process is SCAMPER.
The technique started as a tool that had a goal of boosting student creativity, but nowadays it is widely popular among companies that want to improve their offerings.
SCAMPER is an acronym that stands for Substitute, Combine, Adapt, Modify, Purpose, Eliminate, Rearrange/Reverse.
The technique works by pushing you to rethink the products and services that you have by answering questions related to these verbs.
2. Research and idea evaluation
Once you have a rough idea or ideas, the work is not done. In fact, it’s only the beginning.
The first of many idea evaluations should take place, and that should be done based on thorough research.
The goal here is to reject ideas that are not so good and have no purpose or future and define the good ideas in a manner that fits the market.
Product validation ensures that the product you want to create is something that satisfies the needs of the customers so they would be willing to pay for it.
There are many ways and techniques that you can use to implement the product idea validation like:
- Share your ideas with your team, family, and friends- hear their opinions
- Make an online survey to gather feedback
- Crowdfunding campaign
- Analyze what your competitors are doing
Other possible tools and techniques that you can use to research and evaluate your idea are:
- Pass/Fail Evaluation or Evaluation matrix: there is a set of criteria and you sift ideas through it. You create your own criteria according to what is important and relevant to your company. Things like budget, feasibility, how it will fit with company culture, how well it will fit the overall strategy of the company, etc.
- SWOT: the very well-known analysis with which you can assess the strengths, weaknesses, opportunities, and threats that the product might have.
- Financial analysis: is done by experts which estimate the costs of development, and compare it with the potential earnings of the new product.
3. Concept development
Now you have a good idea that you thought through from all aspects. You made sure it’s something that your customers need, that it’s affordable for your company, that it fits the company culture and overall strategies, etc.
Now is the time to really define the product with all its features, functionalities, designs, etc.
You can come up with several concepts and analyze them or test them in the next phase.
This will give you the chance to see which concept might work best for your customers and be a good fit for your company.
During this phase, you have to figure everything out connected to the new product like methods of manufacturing, address packaging, suppliers, etc.
The testing stage is where you produce a beta version of your product or a prototype, and test the market.
This is a way in which you will validate the concept and notice any problems or technical issues that might be overlooked by this point.
What companies usually do in the testing phase is exposing a certain group of target consumers to the prototype and ask them questions in order to discover whether the product is appealing to the customer and does it have value in their eyes.
Once you are done with testing, you will decide whether or not the product is ready or worth it to be on the market.
5. Product development and commercialization
Once you have the right idea backed up with thorough research, a good plan, and the approval of customers, you can move onto the next phase which in this case is developing the product.
You can start with manufacturing and all the other related processes that will eventually bring the product to the customers.
At this point, you have to launch your product in the mass market. How you introduce your product can make a big difference in its initial success.
You want to create a buzz around the new product and grab the attention of the customers as fast as possible.
Make sure that the customers are aware of the new product that’s about to be launched and do that through marketing, advertising, social media profiles, email marketing, or whatever else campaign you see fit.
Be aware of the pricing. Determine the right price for the product by taking into account your cost and the market prices.
Also, you have to be aware of the timing. You can choose the wrong timing to launch a new product. Even though you can’t predict and control everything around you, try to be aware of what’s happening in the industry.
To summarize, developing a new product can be a big risk for any company. It can cost a lot of money, and sometimes even the reputation of the company when the product fails.
However, the more you are thorough and dig deep into the product development process, the lesser the risk becomes.
Take your time with product development and ask for help from your team and additional experts on subjects that are out of your domain.
If you decide to incorporate a new product into your offerings, at least do it the right way.
Additionally, you can incorporate more or fewer phases than the five mentioned; you can split them or join them as you prefer, but the gist of it is always the same.
Step-by-step, from a vague idea to a real, defined product.
If you found this post helpful, check out the following articles next:
- All you need to know about upselling
- Know all about Growth marketing techniques
- Understanding Green marketing
Have you ever been involved in a product development process? What has the experience taught you? Leave a comment letting me know.