What is a Product Development Process?
A Product Development Process refers to the entire range of activities wherein a company conceptualizes and realizes a new offering. A concept might originate in the marketplace, in a lab, or in the so-called fuzzy front end. Ideas can come from customer requirements, too.
New product development usually follows a process divided into stages or phases, by which a company conceives a new product idea and then researches, plans, designs, prototypes, and tests it, before launching it into the market.
The 7 stages of the new product development process require strong concept development and outcome innovation to make sure the original idea can make it to market. This is generally achieved through encouraging design and product inventions with creative concepts and expert engineering strategies, such as:
- Analyzing the user needs during concept generation.
- Brainstorming ideas to address defined needs.
- Addressing usability, safety, or user acceptance challenges for existing products.
- Applying ergonomic and/or aesthetic concepts through industrial design.
- Ranking and comparing all ideas and concepts.
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What is Product Development?
Before going into the 7 stages of the new product development process, it is important to first understand what we mean by product development. Product development is the process of bringing a new product into the market or improving existing products.
The new product development (NPD) process refers to the necessary stages for launching products from raw ideas to end products or software.
Clear benefits of adhering to the new product development process include:
- To establish the technical plausibility of the idea.
- Ensure a faster time to market.
- Plan for solutions to the customer requirements.
- Increases the chances of product success.
Obviously, innovation is an important aspect of any product development process, however, innovation does not happen naturally. Like a plant, it requires the proper nutrients to flourish, including effective strategies and frameworks that promote divergent levels of thinking. You can read more about product innovation in our ‘Business of Ideas’ series.
The product development process can be managed in different ways based on the needs of the project. You can read more about this aspect of product development strategy in ‘Exploring The Pros And Cons of the Product Development Process.’
With this clear, let’s go through each of the stages of the new product development process.
Stage One: Originating an Idea
Ideas can come from all over, however, the critical point in this step is to understand the problems and needs of the customers. Whether it is a high-powered satellite radio or an energy-efficient clothes dryer, no technology will solve the challenge unless the people using the products are taken into consideration.
New product ideas may come from internal or external sources. Internal sources involve working on ideas generated within the organization. Your team’s ideas merit strong consideration as they are experts in their field. Along these lines, companies like Toyota have organized incentive programs for their employees to think of workable ideas. On the other hand, external sources incorporate distributors, retailers, and end-users, all with valuable insights.
Stage Two: Shortlisting/Screening the Idea
The next stage in the new product development process (NPD) is idea screening. This consists of filtering the ideas obtained from both internal and external sources in order to solidify goals and focus on the most viable options. This helps avoid lost time and extra costs in later stages.
Ideally, your new product is unique and special and can offer the potential of customers flocking to it quickly, without the need for a big investor or a long lead time. Sadly, that is frequently not the case, so it’s important to be clear on the viability, timeline, and needs for further progress in the new product development process.
Some points for assessment at this stage include:
- Analyzing all the strengths, weaknesses, opportunities, and threats (SWOT analysis) of the product and its place in the market.
- The product’s needs for production and distribution and the challenges that may arise in this process.
- Estimating the product’s potential price and building a cost-benefit analysis to ensure positive cash flow.
- Analyzing the regional, national, and international economic situation, as well as the financial situation of the industry.
Stage Three: Concept Development and Testing
Understanding the consumer’s needs and perspectives is critical throughout the new product development process. However, that focus is most critical during this, the concept development and testing stage.
This phase attempts to establish a clear and detailed version of the product concept from the consumer’s viewpoint. This can be done by:
- Quantifying the gain and pain ratio.
- Conducting a competitor analysis.
- Enlisting the significant result features.
- Confining the main principles of the products while creating its concept.
This step should involve the collection of feedback from customers about the potential product. Afterward, the product development team can refer to this data to craft and test additional features and functionality. Focus groups or stakeholders are ideal for testing and collecting feedback to develop a clear concept.
Stage Four: Marketing Strategy / Business Analysis
Many companies involved in product development focus mainly on the products and the technology behind them. However, forgetting about marketing strategy and the business side of the new product development is a mistake.
Two big-name examples that faltered at this stage are Betamax and Google Glass. While the technology behind these products was amazing at the time, the development process was conducted with no connection to a target audience, and the result was a failure. Drafting an approach to reach out to and connect with a targeted audience must be considered a key step.
This phase of the new product development process involves McCarthy’s 4Ps of marketing:
- Production: branding and level of services.
- Price: payment mode(s) and discount policies.
- Promotion: the best medium.
- Placement: defining product scope.
It’s a good idea to review these as part of your product assessment.
Stage Five: Development of the Product
This is the stage where all the essential work of developing the product is performed.
It is in this stage that decisions are made about what elements the product will include, where the production cost is calculated, and when features of the product are finished.
This phase often includes the production of a prototype. Prototypes can allow useful feedback from stakeholders to gain valuable insights from hands-on testing. Finalizing the user interface and user experience design is essential in this stage of the process.
Occasionally, a minimum viable product (MVP) might be launched to market with initial features, leaving room for future iterative and incremental development. This strategy is a balance between providing a suitably appealing product to the customer in a timely manner and allowing for real-world experience and feedback to inform future product development.
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Stage Six: Testing and Validation
This step aims to reduce the vulnerability inherent in the product development process. In ideal circumstances, it can ensure the feasibility of production plans, confirm costs, and help inform marketing efforts.
Testing may be tackled in numerous ways, depending on the requirements of the product. In the case of software, for example, there are typically two phases of testing.
- Alpha testing: the test engineers analyze the product according to its performance. In the event of any issues, the modifications are planned and executed before the last thumbs up.
- Beta testing: the customers consume the product and provide their feedback to the company. In the event of any issues, they are sent back to the development team for modifications.
Other testing may be more formalized, especially if the product must meet national or international standards for functionality, compliance, and safety.
Stage Seven: Commercialization
In the final of the new product development process the company readies for the launch of the product. This phase includes planning for:
- The timing of production.
- The region where the product will be launched.
- Marketing strategies to announce the product and engage initial consumers.
This phase may be informed by analyzing competitor experiences and the current market. In addition, if the regional or national economy is not in good condition, it might be better to wait on the launch or limit initial production and sales goals.
Final Words
Market changes can be quick thanks to technological developments and modernization, and it’s important to take the time to complete these phases in your product development process. And whether you’re new to this challenge, or a seasoned investor, the process of new product development is not for the faint of heart.
At Porticos, we are a product development company that strives to work hand-in-hand with our clients to develop a full product development plan anticipating the unique needs of your product. We apply our years of experience and creative problem-solving to stay ahead of potential obstacles and achieve your product goals.
If you are ready to develop your new products and would like to get our expert help, please contact us. We look forward to hearing from you!
