Simple Guide for the Product Development Process
Innovation is at the heart of operations in companies across the world. Individuals and businesses work round the clock to find sustainable solutions to persistent and dynamic consumer problems. At the same time, global competition is disrupting consumer trends and uptake of products. To improve the chances of market penetration and business success, companies have to streamline their product development processes.
What formula can entrepreneurs and businesses use to bring fresh ideas to life? Are there alternative approaches for them to shorten product development turnaround times? Let’s take you through the stages of the product development process.
What is the product development process?
Let’s say, after interaction with consumers or business peers, you identify a challenge or bottlenecks that impede routine operations. Upon reviewing the problem, you manage to conceptualize how to solve it. However, there is a need for rigorous research, concept development and testing before finalizing products for release to target markets.
A product development process is a series of activities for converting ideas and concepts into viable products or services to serve target markets and improve workflows. It is a strategy that aims to improve market penetration and success of new or advanced products. The process requires adequate planning, market research and extensive consultations to ensure maximum value and increase chances of success after product launch. The initial stages involve market research and analysis. Upon establishing a market need, the development teams develop a proof of concept and test prototypes before launching and releasing finished products.
The product development process does not only aim to introduce new products to the market. Some businesses use it to optimize the value of existing products, spruce up their performance and minimize safety risks due to poor quality. With the scarcity of resources and increasing calls for sustainability, it is becoming inevitable for businesses to adopt lean practices to reduce the cost of operations and enhance flexibility and control over products.
Design Thinking and The Product Development Process
Design thinking is one of the approaches that developers and innovators use to introduce fresh ideas, modern business tools and futuristic product models to the market. Design thinking is a five-stage framework that approaches problems from the user’s point of view. Given its simplicity, design thinking helps small-scale and multi-million dollar businesses to develop software and hardware products.
The five stages of design thinking are:
- Problem definition
The product development process is a comprehensive framework that deals with the development of physical products. Organizations tweak this strategy into different stages featuring six to eight stages of development, depending on the complexity of their products. It is safe to say that design thinking is an integral part of the product development process.
Product Development Models
When working on a solution, the development teams need to adopt a specific product development strategy that informs the subsequent establishment of the product roadmap. The development models provide sufficient guidelines to protect entrepreneurs, startups and established businesses from mistakes that may derail their product development quests. The models are vital for enhancing the success rates for new product launches. The models include:
Booz, Allen, and Hamilton (BAH) model — focus on eliminating risks during the product development process. It is a seven-stage process that provides additional guidelines for strengthening the product life cycle. The model considers failure as part of the product development process. The strategy is a little slow and maybe untenable for solving dynamic challenges.
The execution of the BAH model occurs in seven steps. They are:
- Establish a strategy for new products.
- Generate ideas
- Evaluate possible solutions
- Analyze business prospects
- Build solution/product
- Test final product
- Launch and commercialize
The Stage-Gate model — the model segments the development process into eight steps. It is a popular strategy that enables cross-functional teams to evaluate, build and monetize different products. The model applies to software and hardware development. After each stage, the development team presents its findings to the management, who approve or reject them.
The eight stages of this strategy are:
- Idea generation
- Idea screening
- Prototype and test the concept
- Perform business case evaluation
- Develop products
- Perform a market penetration test
- Commercialise solution
The IDEO process — by using this model, the designers develop products with the user in mind. Each stage of development depends on data collected from customer feedback on the practical utilization of products.
The six stages of the IDEO process are:
- Observation and customer interaction
- Idea generation and brainstorming
- Rapid prototyping
- Testing and feedback collection
- Refine viable solutions
- Implement and mass-produce
Each of these strategies has its benefits and shortcomings. Although all these models aim to boost product success rates, innovators require sufficient time to think through ideas and implement them. The development phase involves iterations, trials, errors and failures. These models act as guidelines to protect innovators from pitfalls, facilitate predictable workflows and strengthen the quality of solutions. Note that the product development process deals with a lot of probabilities. What are the chances of the idea working? How frequently will products fail or succeed?
Stages of the product development process
Introducing a new or foreign concept to the market is a challenge that affects innovators and consumers. Development teams deal with a myriad of incomplete or scarce information, often relying on unconventional practices to test concepts. They have to develop and test a market strategy, outline a pricing strategy and definitive guides for continuous value addition to products and services. Consumers will sit on the fence, wondering about the reliability and durability of the product.
Some activities could be identical and may complicate the development process. How can innovators minimize schedule clashes and standardize the flow of processes? This section provides comprehensive coverage of these stages.
1. Product Ideation and Conceptualization
It is the first stage of the product development process. It focuses on the generation of workable ideas. Senior management organizes brainstorming sessions where cross-functional teams meet and evaluate the intensity of the problem at hand. They list down all the viable solutions and figure out their workability. The development teams rely on fresh ideas to establish a product road mapping strategy and guidelines for streamlining the entire process.
To collect product development ideas, the team relies on resources such as:
- Web forums
- Google trends
- Business to business publications
- Business-to-customer publications
- Consumer interviews
To enhance idea generation, the team needs to focus on customer problems. It enables them to create a comprehensive problem statement that reflects customer challenges and is presentable to stakeholders. During the ideation phase, the company may identify some of the challenges that face their business operations. Such challenges are a way for the company to work on concurrent solutions that are both customer-focused and business-focused.
After identifying a customer need, the team shortlists all the possible problems and qualifies them based on their workability, urgency and lack of alternative solutions. After shortlisting all issues, the development team focuses on coming up with possible solutions. In the product development process, every problem ought to have a potential solution. The team evaluates the cause and effect of the problem, which informs the solution plan and rationale.
The team has to answer questions like:
- What can we do to solve this problem?
- Why should we choose this solution?
- How will this solution work?
- What is the inspiration behind this solution?
When working on idea generation, the teams may notice that the problem is common and has alternative solutions. Should a viable product or service exist, the project team focuses its energy towards improving or advancing the version or developing a radical yet unique solution to the same problem. In essence, the product development process does not limit innovators to creating entirely new solutions.
The final activity for this stage involves narrowing down to one or two tenable solutions for the predominant problems. The development team creates a comprehensive list of all user problems and viable solutions for circulation within the company and stakeholders. The comparative analysis of challenges and their solutions is vital for collecting feedback from experts and in-house teams.
Stakeholders will likely reject some problem statements and their solutions. It does not mean that the team has to stop its pursuit of creating, testing and launching new products to consumer markets. It provides them with an opportunity to repurpose existing products or solutions, build new products by replicating competitor products or upgrade business models to focus on better-performing products than those of their competitors.
2. Idea Generation, Research and Validation
Bring the brightest ideas to life.
After settling on a product, the team moves to the next stage of development. The project team subjects the idea to a thorough screening process to improve the potential for market success. Idea screening is a rigorous activity that involves reviews by internal teams and consultations with experts in the industry. The team must provide a proof of concept to verify the feasibility of the product.
At this stage of the product development process, teams have to collect plenty of data to avoid working on expensive and complex ideas. The research phase enables the company or the innovator to identify if their target markets will use their products. There’s no point for innovators to spend plenty of time working on an idea, yet the purported target audiences are unwilling to pay for the service or the product.
The team working on the new product needs to conduct a SWOT analysis. It is a proven process for the seamless validation of all feasible ideas. They identify the strengths, weaknesses, opportunities and threats that may arise during the product development cycle. The robustness of the solutions and other market opportunities are vital for achieving project objectives. Weaknesses and threats involve all the constraints that will slow down or impede the success of the product development process.
What are some of the ways for innovators to validate product ideas?
- Leverage social media sites to conduct question-and-answer sessions
- Send surveys and polls to potential customers
- Research demands in online platforms and forums
- Use paid advertisements to reach online audiences
During this stage of the product development process, innovators research possible competitors. They review the offerings that these companies have, their marketing strategies and solution approaches with the aim of standing out in the crowd. Try to understand what the potential customers dislike about the services offered by competitors. Customize your niche with the intent to acquire a sizable market share. Insights from this stage are vital for establishing a market penetration strategy and a vision for monetizing the product. The innovator estimates the market demand for the product and the extent of competition, essential for subsequent planning.
3. Concept Development and Testing
At the end of the screening phase, the product development teams settle on realistic ideas. With that in mind, the project team begins working on a comprehensive implementation plan that caters to financial and human resource requirements. The concept development stage focuses on user experiences. The development teams work on the value proposition to ensure that the solution approach is tenable and does not constitute more technical errors.
How can one navigate the concept development stage?
Define the gain and pain ratios — try to identify all the benefits that a customer gains from using the conceptual product. How does it simplify the workflows? Does the problem solve the problem entirely or partially? The pains refer to how much effort customers put in when using the product. A quality product is easily understandable and usable.
Outline key product features — In the concept development stage, teams working on new products have to enlist the unique features that the products have. The innovative features of the product are what will attract customers. The target market needs to know how the ground-breaking solution addresses their challenges. They need to understand the key differences that the product has from the available market alternatives. The way you package the product features potentially makes or breaks the business.
Create a value proposition chart for your product — the end-user requires a clear definition of how the product works. At the concept development stage, innovators must develop a value proposition chart. It is a tool for describing who should use the product, what it does, the number of solutions that the product provides and the unique features that differentiate it from available market solutions.
After creating a value proposition for the new concept, the team needs to move ahead and test it. The company selects a focus group to test the product concept and revert to development teams with feedback on its usability. The feedback informs the innovators if the product is promising. If the target markets feel dissatisfied with the product, the development team
re-evaluates the screening stage to rectify the design. Engaging target customers ensures that the innovator avoids obvious pitfalls that may slow down the product development process.
re-evaluates the screening stage to rectify the design. Engaging target customers ensures that the innovator avoids obvious pitfalls that may slow down the product development process.
Product development teams have to come up with the concept testing report, which captures the opinions of the end-users depending on:
- Comprehension of the product concept
- Quality and uniqueness of the concept solution
- Likeability and appeal of the concept
Innovators use prototypes, product mockups, or wireframes for websites and mobile applications for testing purposes.
1. Business Case and Market Analysis
After proving that the product concept is workable, the team works on a market strategy. They develop a comprehensive plan for packaging products, pricing and promoting the new solution to reach a broad market. The teams will rely on the data collected during the concept testing stage to refine and finalize designs.
A business case or plan should define how the company prefers to brand products or services, outline all the licensing needs, define a strategy for marketing the new products and have a solid plan for maximizing profits. At this stage of the product development process, the development team will outline discounting policies for customers and outline suitable payment methods.
Business Analysis is a crucial stage in the product development process.
Since the development team will be working on a new product, they must agree on a brand visibility strategy. The goal is to ensure the target audiences grasp and understand the unique features of the new product. The availability of this information helps them to make quick comparisons against available market alternatives. When developing a business case, the company should maintain frequent communications with its target audiences. The project execution team deliberates on the measures for resolving customer issues and assigns specific individuals to handle public relations and marketing.
Business analysis enables innovators to estimate financial returns from the new products. It involves setting the base selling prices for new products. The main models for identifying the best prices of new products are:
Market-focused pricing model — the development teams researching the cost of similar products in the market. Businesses benchmark against the quality of similar products and customer satisfaction to set the prices of new products. Under this model, the innovator can decide to keep the prices of the new products below, above or equal to the prevailing market rates.
Cost-based model — A pricing model that factors the total cost of production. The team calculates the amount spent to develop a concept into a viable product. They then add a markup percentage to come up with the actual cost of the new product. It is a realistic pricing model to ensure maximum returns on investment.
5. Product Development
After validating the product idea and documenting the market strategy, innovators proceed to the product development cycle. Before the stage, most product ideas exist as drawings, digital designs and basic prototypes. This stage of the product development process introduces physical products into the market.
It is the stage that the company begins pumping in cash to develop and refine products. The product development stage starts with the development of prototypes. The teams then work on the minimum viable product (MVP), clearing the path for a market launch and future iterations.
Building a prototype during the product development process enables the end-users to visualise and understand the working mechanisms of new products. Prototypes are used to test features such as safety, reliability and ergonomics. The prototyping stage is an opportunity for the innovators to solve hidden technical issues and incorporate new features as demanded by customers who enroll in the beta testing program. The prototypes are small-scale versions of the final products and are vital for estimating the cost of production and validating the practicality of conceptual ideas.
Innovators introduce minimum viable products to established markets to evaluate acceptance and marketing dynamics. Product developers use MVP for collaborative designing and communication with their customers. Users provide feedback while the development teams perform iterations on the MVP models to refine their performances. These products have minimal or critical features of the desired end product.
During the stage of the product development process, innovators and developers evaluate every aspect of the product. They utilize prototypes and MVPs to estimate production time, cost and appropriate tools for full-scale production. The teams collect data and feedback from the focus test groups and treat the designs accordingly to meet specific client demands.
The product development process can take a few days or weeks to complete, although complex projects may require several months to years to complete. Product development for a hotel room booking mobile app takes a few months to complete, unlike a production line for a food and beverage company which requires several years to test before operation.
6. Market Testing
How can innovators and companies test the success of the new product in the market? Does a successful product development imply that the new product or service is error-free? In practice, businesses deal with plenty of uncertainty after validating and developing a product. This stage of the product development process aims to reduce skepticism relating to the penetration of the new product in the market and the efficiency of the marketing campaigns.
There are two market testing methods for new products.
Beta testing — a feedback collection method that enlists the services of a target group of service users or product consumers. They provide actual experiences on the simplicity or difficulty of using a product, its functionality and applicability to routine workflows. The developers and innovators use feedback from the users to evaluate the readiness to release products to their target markets.
Alpha testing — an in-house set of testing practices for evaluating the quality of products and testing their performances. For software development, alpha testing will involve activities such as bug identification, while for hardware development, development teams will be looking into features such as safety guards, emergency switches and controls.
7. Commercialise Solutions
Test marketing provides the company with vital information that informs its next course of action. Feedback from consumers and focus groups help the senior management to decide whether to launch a new product or not. In simple terms, commercialisation is introducing a new product into the market. The company has to decide on the most appropriate time to introduce the product to the market. The company or innovator should introduce the product when the prevailing economic conditions are favorable. They should perform due diligence to ensure that they push for the introduction of the product earlier than any of their competitors working on the same product.
At this stage of the product development process, the innovator decides the exact launch location for the product. Does the product serve customers within a specific locality or region? Does the company have the capacity to serve national and international markets? The product commercialization stage is cash intensive because it involves several activities that include:
- Logistics and distribution
- Marketing, promotions and advertisements
- Establishment of sales facilities and warehousing units
- Customer support related activities
The company may require a considerable amount of time to recover returns on investment after a successful product launch.
A definitive guide to getting the best out of your product development process
Different businesses use different approaches to execute the development. They develop plans and metrics for evaluating success depending on the type of product or services that they intend to offer. There are few practices that businesses of any category can implement to enhance the quality of their product development processes. These are:
- When evaluating the product market and defining problems, focus on the human user of the solutions or product.
- Set realistic objectives and implementation timelines for the product development teams.
- During the ideation and concept stages, focus on the market fit of the solution.
- Encourage transparency and clear communications among the product development teams.
- Try to Validate product ideas in the early stages of the development process.
- Conduct extensive research on the new product.
- Establish a framework or system for team collaborations and documentation of work.
- Embrace agile product development processes. Deliver delightful products or services to customers using few resources.
Embrace The Product Development Process
Innovators have to overcome a series of hurdles to bring a finished product into the market. Some product development tasks may seem impractical to execute or demand intensive human and financial resources. Other activities create a whole new set of problems. When developing something new, innovators may be uncertain over which resources or tools they should use. The shortage of funding may push some innovators or companies to ditch their plans to introduce disruptive products or services into the market.
Irrespective of all these challenges, innovators must start somewhere. Customize the needs of your product development process to match the above stages. Utilize online product development tools, conduct extensive research, consult industry experts where possible, and plan adequately for the journey. Remember that finalizing a product does not mark the end of the product life cycle. Always watch out for customer feedback and explore opportunities for improving your product. Iterate your solutions to develop advanced versions and improve the baselines of your business.