Did you know that, according to multiple studies, including Harvard Business Review, 80-90% of new product launches fail? There are many reasons for this, but rushing and not thinking through product development is a major factor. But what is product development, why is it useful and who is it beneficial for?
Nowadays, people often search for the best products in any category. When people buy a phone, they look at the camera, screen quality, and storage space. Washing machines should have a dryer and be able to wash a lot of clothes. They should also be small and look nice. Is this all achievable? That’s where product development comes into play.
What is product development?
Product development is the creation of new products or the enhancement of existing products to meet customer needs and preferences, reduce production costs or fulfil other business objectives. You could address functionality, look and feel, materials, technologies etc.
What can product development help with?
Product development is useful in a wide variety of situations, let’s have a closer look at some of them.
Idea for a brand new product
Do you have a brilliant idea for a new product that the consumers are currently missing out on? Then you should start thinking about product development to turn the idea into reality.
Providing added value for a product already on the market
If you noticed a product on the market that you think you could make more user-friendly or add value to then it is worth exploring. The important part is that the end user sees the added value as well, otherwise you might not get the results you want as the customer might not be willing to pay more for your product or switch from the current one.
Developing your own existing product
In order for your product to keep bringing in good sales figures, it needs to be developed. Consumer needs change with time and the products need to keep up with these changes or they won’t be as attractive anymore and sales figures will slowly decrease. What was a popular product 10 years ago might not fulfill customer wishes and needs in the current day.
Product simplification
People are looking for the best of the best normally, but it could also happen that a product is over-engineered trying to fulfill every customer need - even the ones that the end user might actually not see as critical. But a product that is too complicated and too expensive might not sell. Product development can also help simplify a product if this happens.
Reducing production costs
You have a product that the customers love but the production costs are high and the profit isn’t quite where it should be? In that case, it is time to have a look if small tweaks could help bring costs down without sacrificing the quality and features of the product - product development is perfect for this as well.
Regulatory changes
If regulations change, companies have to ensure that their products comply with the new regulations to be able to keep selling them. Product development may be needed in this situation.
Risk reduction
Businesses that only have one product or a couple of products might be at a higher risk if those products lose popularity on the market. Product development enables you to increase your product portfolio and thus reduce risks.
Entering new markets
When a business plans to enter new markets, product development might be needed to make sure that the product complies with the regulations and customer needs of the target market.
7 step product development process
The product development process itself is fairly consistent - it starts with an idea or concept and ends with a new product coming to the market. However, it also has some steps that should be customized based on what the product or industry is if it is done well - that’s why we don’t have a generic product development process that we follow as a mantra at Raab, we like to adapt the process to the project at hand instead.
Creating a product roadmap as part of the product development process is beneficial as well. It helps define the product vision, product strategy, value proposition, success metrics and marketing strategy. This roadmap helps organize the process and break deliverables into smaller tasks, ensuring a structured approach to product development.
Ideation (Idea generation)
Product development process typically starts with ideation or idea generation in simple words. The main aim of the ideation phase is to generate new product ideas by finding potential gaps in the market or improvement areas for already existing products. You could even come up with something brand new that has never been done before. Don’t overthink in this phase, just let the ideas run wild and write everything down - you can adjust them later if needed.
And yes, we know that generating product ideas could be tricky, especially in a crowded marketplace. Here are some ideas you could try:
Gather feedback from your product development team and customers
Conduct market research
Check what your competitors are doing - are there any potential improvement areas?
Have a think whether your current products could be adapted for other markets or whether features from different products could be combined to develop a completely new product.
- You could also get ideas from trade fairs and conferences or by partnering with external product development companies or consultants.
Validation (Concept selection)
Assess and prioritize the ideas generated during ideation by conducting concept testing, which involves validating product concepts through market research and business analysis considering factors such as feasibility, market potential and alignment with business goals. Discard ideas that do not meet the key criteria until you land on a single most promising product concept.
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Concept Development
Once you have chosen which product idea you would like to keep working on, the concept development phase starts. This includes the creation of a product concept and product design. In this stage, the customers’ needs are mapped out for product features and customer feedback is gathered. Adjustments are made to the original concepts if needed.
If you don't have an in-house development team and haven't involved any external agencies so far but need help with the technical part of product development then this phase is a good time to start including product design and product development services into your process.
Prototypes & Testing
Once you have finalized the product concept, it is time to move on to the prototyping phase. Now is the time to start building a prototype or a minimum viable product. Depending on the complexity of the product, product developers may use various prototyping techniques such as 3D printing, CNC machining or digital simulations. Prototypes allow developers to evaluate the product’s functionality, ergonomics and user experience before moving into mass production.
The testing and validation part encompasses various aspects such as performance testing, stress testing, reliability testing and compliance testing. Engineers gather data, analyze results and make necessary adjustments to optimize the product performance and address any identified issues. Test marketing can also be conducted to validate the entire concept, including marketing angle, packaging, advertising and distribution, by offering the product to a random sample of the target market.
It is also completely normal that there might be a need to return to the development phase to adjust different elements whilst you are building or testing the prototype or have launched an MVP. Only once you are fully happy with the final product, should you move on to the next phase.
Production
The production phase is the final big step before product's launch. It includes production planning, set-up and manufacturing. Production is normally the most expensive stage of the product development process. For example, in addition to the normal production costs like material, labor and logistics, you might also need new machinery to organize mass production.
You should also think through the distribution strategy in this phase. How do you get your products from the manufacturing locations to the stores or end users?
Product Launch
The next stage in the product development process is product launch - bringing your final product to the market for the customers to buy. User feedback is essential during this stage to observe the product's performance and make necessary adjustments.
A well-thought-through marketing strategy is crucial for a successful product launch. You should identify your target audience and create buyer personas to understand what channels are best to use. Then you can start mapping out the campaign, planning PR, setting pricing strategies, producing marketing materials and so on.
Improvements & New Developments
But product development doesn't stop with the launch. You should step back and observe the performance of everything. Assess market interest, monitor usage and carefully observe the buyers of your product. Observe how users interact with the product, identify which features they like and pinpoint areas that could be improved further.
So who needs product development?
The answer is quite straightforward - every business that wants to create a new product or already has a product and wants to be successful in the long term as well will need product development.
The competition for every product is a lot higher nowadays than it was 10 years ago - people shop online and this means that businesses worldwide are now your direct competition. There is no time to snooze, any moment someone might come out with a cheaper or improved version of your product.
Technological advancements are also happening very quickly which means that you should start thinking about improvements to your product straight away - consumer needs and preferences change constantly and therefore what is expected from a product is also changing, you need to keep up with these changes.
Not enough time or expertise in the business to do product development? Don’t worry, product development services can help with that - get in touch for more information on what we can help you with.