Product development strategies are important to ensure value for your potential customers, as well as ensuring that there is demand and that your final products are of the highest possible quality before your take the products to market.
The very best products also help society improve, whether through the product line itself or through the employment and income generation the new items deliver.
On the business side of things, a new product can improve market share and create growth in a company, providing economic sustainability through new revenue streams. Of course, it can take years for development teams to take a product from the design process through to the point where it is ready to market and distribute. As a result, it is important that a plan is put in place for any new or existing products to be successfully developed. The development process increases in complexity according to the products under development, for example iot devices that combine hardware, sensors and microprocessors.
A product development plan should cover the journey from concept to market and engage as many stakeholders as possible in the process to ensure their needs and concerns are addressed, while also engaging with the market to ensure the final product will have market value.
The stages of development required for a product team can be broken down into the following areas:
1. Identify Market Need
The first stage in creating a product is determining if there is a need for it in the market. By speaking with customers and taking on other research activities, such as test marketing and surveys, you should be able to tell if there is interest in your product and the problems that it will solve.
2. Quantify the Opportunity
Just because there is a problem to be solved or an indication of market interest, does not necessarily mean that a product should be created. Not every problem needs a product-based solution and there should also be a willingness for a customer to pay the required price for the solution too.
3. Conceptualise the Product
You team can now begin to get creative and brainstorm ideas to design solutions that solve the problem and meet market needs. This can lead to the creation of several potential solutions that will need to be assessed.
4. Validate the Solution
Prototype design and creation can be costly, so it is worth taking time to assess and validate your concepts. This assessment can be carried out at a conceptual level to weed out those designs that are not worth pursuing further.
5. Build a Product Roadmap
Once the proposed concepts have been settled, it is time for the product management team to create a roadmap for your product. This will identify which themes and goals are to be developed first to solve the most important parts of your challenge. This step should lead to the creation of an early version of the product that can be tested and examined by sections of the market. See below for more information about product roadmaps.
6. Develop a Minimum Viable Product (MVP)
Following your product roadmap should lead to the creation of a product that has enough functionality to be used by your customer base. It may not be the finished product but should be enough to test the market and gain initial feedback.
7. Release MVP to Test Users
The MVP should be released to sections of the market to test interest, gain feedback and allow you to begin to determine marketing messages, channels and sales team plans. This can go further than the product itself and also encompass packaging design ideas and pricing. This important stage provides a feedback loop between you and you customer base to provide ideas, complaints, and suggestions to improve your final product.
8. Ongoing Assessment and Development
Using the feedback gained from the MVP release, you can now begin to work on enhancements and changes to your product. By following the feedback from your customers you can make sure your design aligns with their needs. This requires strategic goal setting and may involve several iterations before you achieve a finished product that is ready for market. This step can feed back into the product roadmap and then lead to the subsequent stages being repeated several times. Even when a finished product has been achieved, this stage can continue in order to optimise your product further for later adaptations or improvement.
Many people mistakenly mix up product development and product management. However, product management is actually just one aspect of the work that makes up your overall product development cycle.
Some companies think of ‘product development’ as the work done by developers, engineers, and quality assurance, however true product development covers the overall process of taking a design from concept to market, involving the input of many teams across a company, including:
- Product Management
- Product Marketing
- Project Management
- Testing and Quality Assurance
Each of these areas plays an important role in the process of defining, designing, prototyping, testing and delivering a final product.
Agile product development is an alternative version of regular product development, which includes all of the same steps but with the addition of agile software development principles added in. These principles include factors such as rapid iteration based on user feedback.
An agile framework can shorten the time from brainstorming and design through to a product launch, since it allows a product team to push out versions of the product much faster with fewer updates and improvements. This is achieved by engaging actual users more efficiently throughout the process.
A product roadmap is an important part of your product development strategy as it allows you to prioritise, summarise and capture the key objectives and themes of your concept. This roadmap should convey your product’s themes while also establishing the steps to take your design through to market readiness and is therefore best presented visually.
While your product roadmap can change over time, a visual roadmap offers two key benefits to developers:
1. Ease of Reference
A visual representation of your roadmap allows for ease of reference for your team. Being able to see the high-level objectives can help keep things on track and make sure you address the priorities for your project. The more visual your roadmap is, the easier it is to understand, as opposed to using a spreadsheet of ‘to-do’ items with no real structure.
2. Gain Buy-In
A visual roadmap makes it easier to gain buy-in from executives and other key stakeholders. A compelling presentation of the goals of your product can aid product development and investment, making it worth spending some time to leverage the best advantage possible through your roadmap.
Product development offers advantages for everybody across all levels of your product design, testing, manufacturing, marketing and sales teams. It makes sure your product is viable and that the process stays on track throughout. This also offers benefits for customers as it ensures your product aligns with their needs and pricing demands, in turn meaning that you have a saleable product too.
Almost any product will have undergone some level of product development. This is particularly true for new and innovative items but can equally apply to some more unexpected examples, for example, by a fast food company to create a new burger.
The process is particularly important where large sums of money are at stake or where there could be a detrimental impact on the environment or health from a deficient product. Whether it is the device you are reading this FAQ on or the kettle you used to make your morning cup of tea, there is a good chance that product development was an important part of the process.
The development process can also be scaled up to entire projects, covering several smaller aspects to create a larger final product such as a wind turbine or aeroplane. The product development process can be assisted with tools such as augmented reality or machine learning to reduce costs and speed up the delivery of the final product.
What are the stages in product development?
Depending on who you ask, there are a number of different stages in developing a product lifecycle, but it usually involves between 5 and 7 steps.
The stages in a product development lifecycle generally include:
- Ideation (idea generation)
- Idea validation and market research (or screening)
- Concept development, prototyping, and testing
- Market strategy, business analysis, and marketing
- Product development
- Commercialisation and improvement
While the process differs according to industry, and the exact terminology used also changes, product development typically involves a product development team investigating the target market as well as creating, improving and promoting the product itself.
How is product development important for a company?
Product development is important for a number of reasons, from ensuring your products are of a high quality, provide value for customers and are in demand. For businesses, a new product can improve the market share of a company and deliver growth as well as economic sustainability through the creation of new revenue streams.
Product development can take years, depending on the complexity of the item, so it is important to create a plan for new and existing products to be developed. Good product development can seek gaps in the market or solve problems for consumers, helping businesses get ahead of the competition, gain revenue and build customer loyalty.
How does marketing interact with product development?
Marketing is important to product development as it helps build interest in a product before it launches. A good marketing strategy will communicate the benefits of the product, creating demand and building a new customer base and generating loyalty among existing customers.
What is the role of R&D in product development?
Research and development (R&D) helps businesses to innovate to deliver new products and services or improve existing ones. R&D can keep a company ahead of the competition by meeting new needs and wants in the market. R&D varies between companies, industries and products but will tend to include a planning and strategy phase, research, development, testing, launch, and often post-launch improvements.
Can product development costs be capitalized?
The Corporate Finance Institute reports that companies can capitalize product development costs only if they can prove the product will become commercially viable. However, it is worth checking the rulings for your area and industry.
What are the common strategies in product development?
Common strategies for product development include an exchange of ideas, modifying an existing product, increase product value, offer a trial to customers, product customisation and specialisation, create package deals and new products, and to find new markets.
What skills are needed for product development?
The skills needed for product development depend upon your role in the product development team. However, general skills will include creativity, attention to detail, problem solving and good communication skills.
It is also important to have a good understanding of the desires and problems of the customer base. This will require user research, testing, product and trends analysis, and customer feedback.
Product development team leaders will also require analytical, strategic and coordination skills, including leadership and entrepreneurialism as well as motivational skills to help manage a team.