Developing Products at Your Business: Key Considerations

Developing products for your business, whether it’s a new product or making improvements on an existing one, takes time and research. Knowing what resources you need to set aside and the time it’s going to take will help you plan and prepare for the design phase, production period and launch event. Learn what product development is, understand the stages of product development, review tips for a successful product launch and read answers to frequently asked questions about developing products. 

 

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What is product development? 

Product development, also known as new product management or new product development, is the process of creating a new product or modifying an existing product for market. While the term “product” often refers to a physical entity, the process of product development includes services in addition to physical products. 

Product development serves several purposes for both the company and customers. Primarily, product development: 

  • Offers value to customers: New products with innovative features provide value to customers.
  • Improves the marketplace: Bringing new products to market spurs competition and encourages other companies to increase the value of their brands. This type of competition benefits everyone.
  • Fosters company growth: Adding new products to your company’s line up should increase your profitability and help your company grow. 

Related: Roles of a Product Manager: Key Skills, Roles and Duties

 

Stages of product development

Every company handles product development differently, depending on the industry, although there are some basics when traveling through the stages of product development, such as: 

 

1. Idea generation

In the idea generation stage of development, researchers and developers are looking for great new ideas for products or services. Some companies have ongoing idea generation, some devote certain times of year to product ideation and others only seek idea generation when their business is ready to engage in the full process of product development. In the idea generation stage, employees come up with possible product ideas to develop.

 

2. Product selection

In the product selection stage, the group working on product development takes the ideas generated in stage one and assesses them for quality and feasibility. In some cases, the development team goes into the ideation phase with a general understanding of what they hope to create, while for others, the entire process is open-ended. In both scenarios, the goal of stage two is to arrive at a single permissible product idea to pursue. 

 

3. Concept development

Once the team has established a feasible product idea, they take the concept to a testing group for feedback and development. Sometimes, this team is another set of internal employees disconnected from the initial stages of product development. Sometimes, it’s a group of outside stakeholders, like current company customers. Many companies solicit feedback from both internal and external stakeholders to fully develop their product idea. 

 

4. Market analysis and development

Following the formation of a fully-fledged and vetted product idea, the development team performs market analysis. This process involves strategizing how to best bring the product to market, specifically in these areas:

  • Price: The team determines the sale price for the product based on competitor pricing, market demand and anticipated profit margins. 
  • Promotion: The development team works in conjunction with a marketing team at this stage to begin developing an effective marketing and advertising plan. 
  • Placement: Finally, the team determines where they’ll sell the product. Some companies sell exclusively online, some sell only in brick and mortar stores and others do a combination. 

 

5. Product design

Often simultaneously with the market analysis and development stage, the design team actively begins creating a prototype of the proposed product. Depending on the industry, type of product, intricacy of the design and manufacturing cost, the team may design the product using computer software, inexpensive materials like clay or plastic or make a full-fledged true-to-market example of what the company intends to sell. 

 

6. Prototype testing

After completing the design phase, the development team takes the prototype and performs several types of testing on it. Usually, there’s technical testing to ensure the product works as expected and meets any safety regulations. There’s also market testing, in which the team shares the prototype with internal and external stakeholders for feedback. After gathering the results of the technical and market testing, the design team makes any necessary adjustments to the product before starting manufacturing of the official product. 

 

7. Product launch 

The final step in product development is planning and implementing the product launch. This stage primarily falls to the marketing team. They’ll create a comprehensive plan to engage with current company customers and potential customers through traditional and digital marketing channels to share information about the new product leading up to the day of the launch. Often, there’s a big event at the store or online on the actual launch day. 

Related: How to Conduct Vision Planning in Your Organization

 

Tips for a successful product launch

Use these tips to help you structure an effective and successful product launch:

  • Plan ahead. If you can, begin planning your product launch a year in advance. This way, you have plenty of time to establish your plan and start sharing information with your customers. 
  • Use the product. Prior to the launch, ensure any employee who will have a hand in selling the product has had the opportunity to use it, as this better prepares them to answer questions about the product. 
  • Understand your competition. Know what similar products are on the market from your competitors and be prepared to discuss why your product is better. 
  • Create interest. Begin establishing interest in your product early so news of the launch spreads organically. 
  • Increase momentum. Slowly build momentum to launch day over time to keep customers intrigued and excited about the product’s release. 
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Frequently asked questions about developing products

What are the seven stages in the new product development process?

Most companies follow a seven-stage approach for product development. Those stages often go by different names, but they usually encompass the same ideas and directives regardless of stage title. The seven most common stages of product development are: 

  1. Idea generation
  2. Product selection
  3. Concept development
  4. Market analysis and development
  5. Product design
  6. Prototype testing
  7. Product launch

How do you develop an idea into a product?

Turning an idea into a product takes time and research. Most companies follow the seven-stage product development cycle that leads directly from idea generation to the launch of the final product. Each stage in the process helps develop the idea further and prepares the company to market and promote the product once finished.

What is the product life cycle?

The product life cycle refers to every stage a product passes through from its initial launch to when it’s removed from market. The product life cycle generally has four stages: 

  1. Introduction: In this stage, the product is introduced to market with a substantial amount of marketing and advertising support. 
  2. Growth: In the growth stage, demand for the product grows and production often increases to match demand. 
  3. Maturity: In the maturity phase, the product has enough awareness that it doesn’t require much marketing support, but still provides the company with substantial profits. 
  4. Decline: In the final stage, demand for the product begins to decrease, eventually leading to the product’s removal from the marketplace.

Developing new products is a substantial undertaking, but one that often provides numerous benefits. Ensure you prepare appropriately for the stages of development to create a valuable and profitable product.

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