The business world is full of stories about exciting new products hitting the market and revolutionising industries — from cutting-edge technologies like quantum computing and robotics to solutions that empower people’s everyday lives.
Organisations often spend years researching new products and solutions before bringing them to market, but while the process might seem complicated and arduous, it’s fairly structured and based on solid research and insights.
Not to say that some instinct doesn’t play a big part in the product development process — it definitely does.
In this guide, we’ll take you through the product development process from start to finish to give you a fresh look at how it works and how you can utilise it effectively.
Let’s start at the beginning.
What is product development?
Product development is the process of taking a new product to market from start to finish. This includes idea generation, concept development, identifying your target audience, building a marketing strategy, promotion, and more.
Developing a new product requires a considerable amount of research — and further still, it’s a continuous process that doesn’t end even after your new product has launched.
Indeed, leading brands ensure that they continuously improve and iterate on their products and experience, using customer feedback to identify areas of improvement and new product opportunities based on customer segments.
Let’s look at the key steps you should take to develop new products that have a great chance of success in the market and with your target audience.
The 7 steps to product development success
Before we get into the new product development process, let’s talk quickly about who needs to be involved on your product development team.
When it comes to developing a product, it’s important to include the right stakeholders to ensure you create a marketable product. While market research can give you insight into what people want and need, technical engineers, for example, can tell you whether or not it’s possible to deliver on customer expectations. Similarly, your finance team can help you to understand the costs of production, ongoing development and delivery, marking your costs against forecasted profits to see if it is an opportunity.
Also, leverage both qualitative and quantitative market research to get the most accurate opinions from your audience and customers. This kind of information will help you to build products that always meet market needs.
Ultimately, the product development process requires input from multiple people across the business to ensure you come up with a marketable, great and financially sound product idea.
Now, let’s look at the different stages of the new product development process:
1. Idea generation and research
The first stage of the product development process is idea generation. During this stage you and your team will brainstorm new ideas and start to build a product concept based on market research and customer needs.
Now, there are a few factors to keep in mind during the idea generation stage of your product development, including:
- Your target market
While you’ll no doubt have buyer personas built out, remember to always think about how you can deliver value to your customers. What exactly do they want or need? Market research will help you to uncover buyer intent and if there are gaps in the market you could address.
- Existing products and competitors
Before you decide to create a new product, look to see if it exists already. If there are competitor solutions out there that meet the need you’re trying to solve for, can you improve on them? If not, can you create something new to satisfy a similar or different need?
- Success metrics
Even if you come up with an idea, how will you measure its success once you bring it to market? Key performance indicators, such as average order value, deal size or something more specific such as customer lifetime value as you bring purchases in, can help you to understand just how fruitful your efforts are — and justify doing the same in the future.
If you’re stuck for product ideas, another great way to quickly come up with them is to use the SCAMPER model, which is:
- Substitute — can you swap one part of a product with another?
- Combine — can you bring together certain features? E.g. a phone case and battery pack
- Adapt — can you innovate on the product? E.g. adding automation to action feedback
- Modify — can you change an existing feature? E.g. making a processor smaller but more efficient
- Put to another use — can you make it possible to use the product elsewhere or for a different market? E.g. adding features to a HR product to allow other teams to benefit from it
- Eliminate — can you get rid of barriers to sale and deliver savings to consumers?
- Reverse/rearrange — can you rethink your product to do something else?
With the SCAMPER model, you can revise your products and transform them into something new or even adapt them for a new target audience or problem.
Similarly, you can use a SWOT analysis — which is a Strengths, Weaknesses, Opportunities and Threats analysis technique. It’s widely used by everyone from large organisations to small businesses to develop and bring to market new products.
If you want to learn more about developing more user-centric products, our guide on how to solve your users’ problems with the design-thinking process can help.
2. Idea screening and product strategy
Once you’ve come up with a product idea, the next stage of the product development process is to check its validity using product scoring models, checklists, market research and insights. This is the screening phase — and there are a few things to do here.
Align your product idea with your overall goals
During idea screening, you should also ensure your new idea fits in with your brand identity and overall corporate strategy. For example, if you produce and are known for sneakers and t-shirts, transitioning into microprocessors might not be the best idea. You should have a clear business case and value proposition, e.g. the why and for who.
Assess market trends and where you fit in
As well as product-market fit, what market trends are happening in your industry and where does your product idea fit in with them? For example, if you produce travel storage solutions — such as suitcases, backpacks — what about using more sustainable materials? Not only will you appeal to the trends of the day, you’ll do your bit to help improve the environment.
Establish a marketing and pricing strategy
And what about marketing? So you’ve identified the value proposition of your ideas and agreed on your success criteria, but how will you advertise your new product to the masses? What’s your core messaging and what platforms will you use? At this stage, it’s worth tasking another team to brainstorm the marketing strategy so that it aligns with your product’s USP and your overall goals.
Typically, the best and most straightforward approach is to follow the 4 p’s of marketing for a new product:
|Product||Finalising the software product based on the concept testing report||Product Design
Level of services offered
|Price||Strategising around product licensing cost, estimating profit margins, and creating an unbeatable marketing strategy||Pricing Strategy
|Promotion||Distinguishing the new solution from others by highlighting the hero point or unique feature||Balancing advertising, marketing, and public relations strategy
The mediums to reach out to the target audience
Maintaining a fair to-and-fro customer communication frequency limit
|Placement||Communicating how it solves the key problems of the customer||Finalising product distribution strategies
Defining the product’s scope, i.e., local vs Global
This kind of business analysis will help to determine if your product idea is worth the financial investment — and time.
If you need help with product pricing, check out our guide on pricing a new product.
Evaluate the technical feasibility of the product
Finally, you should assess the technical feasibility of your idea and whether your company can produce the product you’ve come up with. This is where your finances and people resources come into play. You may need to hire more experts to help develop your product, or you might have to scale back on certain features (or other areas of your business) to afford it.
Whatever the situation, the research you do during your idea screening will help with the next phase of your product development: Product concept testing.
3. Product concept development and
In this stage of the product development process, you validate your best and most promising product ideas from the screening process using concept testing.
Concept testing allows you to capture real-time feedback on product concepts early in the development cycle by evaluating the strengths and weaknesses of your ideas. It’s super valuable as you can identify [customer] perceptions, wants and needs associated with your product or service.
It’s important to bear in mind that concept testing is not a replacement for the ideation phase. Instead, it tests the basic ideas that come out of the ideation phase, whether they’re fully formed or not.
After you’ve validated your new product concepts, you should have a minimum viable product idea that you can start to prototype.
During this stage, you extensively research and document your product by creating a detailed business plan and developing a “prototype”.
These early-stage prototypes could be as simple as a drawing or as complex as a computer-rendered design, either way — these prototypes will help you to identify areas of risk (or opportunity) before you create the final product.
What you’ll want to do at this stage is work on the following:
- Feasibility — Determine the workload and estimated timeline and whether you have the resources to achieve your goal.
- Market risk — Determine if there are any barriers to the new product development process before it’s created. Eliminating these barriers will ensure that your product is launched on time.
- Development strategy — Who will do what? Assigning responsibilities to certain tasks and setting them against a timeline will hold people accountable and keep your project on track. One way to plan effectively is to use the critical path method.
- MVP — You’ll want to come up with a product concept that’s the minimum viable product that you can launch with. In other words, functions as intended but without all the bells and whistles.
Once you’ve conceived a prototype and tested it against the variables above, next up is the initial design.
5. Initial design and testing
Following the MVP prototype, it’s time to produce a mockup of the product. Ideally, you’ll want to involve key project stakeholders to ensure your initial design meets all of the previously specified requirements. You’ll also have to keep tight communication with them so they’re aware of progress and potential roadblocks (which they may be able to help with).
When the design is complete, ask everyone to pitch in. Feedback is essential if you’re to create the best possible product for launch. Revise the product design as needed until you arrive at a final design that everyone’s happy to develop and launch with.
You may have to make several versions of your initial design before you get it right. Once the design is approved and ready for hand-off, you can move onto market testing.
6. Market testing
This product development stage is critical to ensure the long-term viability of your new product.
Some companies will carry out their market testing by going through a ‘soft launch’, where they’ll release their new product to a small fraction of the market to test how it works and how it’s received.
Alternatively, they’ll send out their product to select individuals to essentially review and provide feedback on the product before it’s shared with the wider market. Something like a “beta” test or an “early access” preview. These individuals will usually put the product through its paces to see if there are any issues or areas for improvement.
At this stage, you can use several internal and external sources to test your product to understand how likely it is to perform and become a successful product after launch.
You should also look to finalise your marketing strategy in preparation for your product launch.
7. Commercialisation and product launch
This is the final stage of your product development and revolves around making a success of it.
By now, you’ll have finalised the design of your product and tested it rigorously and constructed a robust marketing plan — not just for the launch of your product, but for its ongoing promotion.
At this stage, you should be working on product development and improvement through constant iteration. You should have feedback cycles set up every quarter or half-year so that you can review progress.
- Product iteration and development
From initial uptake and usage, what are you seeing that needs improvement? Or perhaps there are features that you can add to address the needs of a specific target market? Either way, post concept development you can start to work on the existing product. In the software space, organisations typically have updates or “patches” that improve the functionality of the software and add new capabilities.
As part of your marketing efforts, you’ll no doubt have a platform through which to advertise and promote your new product and its availability. For software solutions, ‘availability’ isn’t so much of a concern as it is for brands or organisations that sell physical items, e.g. computer processing chips, laptops and so on. Therefore, you’ll want to think about how you distribute your product if it’s a physical item.
- Customer service and support
Every new product launch requires a dedicated customer service team for those interested in the product, as well as for those who have purchased it. As well as customer service, there should be a support team for any technical issues or inquiries.
- Sales measurement
As mentioned above, you should have a sales team set up to measure performance against your key performance indicators outlined in the earlier stages of the product development process. Furthermore, the sales team should help drive deals and purchases by leveraging marketing collateral and messaging. Ultimately, they are your best tool in getting your product out there and into the hands of customers.
Create products your customers will love
A key stage in making a success of your product ideas is to ensure you generate thorough research to understand the needs and wants of your existing and potential customers.
Understanding these needs of your customers can help guide the development of your products so you know you’re giving your customers what they want — before you even start the product development stage.
With Qualtrics’ product research development, you can understand what the market and your customers want before and during launch, and during the full product life cycle.
Qualtrics research solutions can help you understand everything from market research and product pricing through to developing concepts and gathering customer experience feedback. You can identify the features users want, shorten development lifecycles, and drive usage and loyalty — all on one easy-to-use platform.
And there’s more — if you need help creating a market research project to support idea generation and concept testing, as well as ongoing product feedback, our research services team is more than equipped to facilitate your needs.