Product development, also known as new product development or management, is a sequential order of steps which involves the idea generation, screening, designing, developing and marketing of newly produced or newly rebranded products or services. The motive behind product development is to grow, sustain and enhance market share of a company by meeting demands of consumers. Defining the target market for a product or service must occur earlier in the process of product development because every product is not meant for every client or customer segment. The necessity of conducting a quantitative market research at each and every step of the product development process is undeniable.
Basic Methods of Product Development:
Product development is a creative process but it needs a systematic method to direct the process of getting a new product or service properly. The Product Development and Management Association (PDMA) and the Product Development Institute (PDI) stated guidelines to decide the best method for the development of new product or service. A method or framework aids in structuring the process of a particular product development.
Three basic product development methods will be briefly discussed here. The methods include:
- Fuzzy Front End (FFE) Method
- Design Thinking Method
- Development Method for Manufactured Goods
1. Fuzzy Front End (FFE) Method:
Fuzzy Front End (FFE) product development method, states the steps to be followed but the sequence of the steps will be decided by the management or marketing team depending on the type of the product or service which will be developed. The five steps of FFE method are:
Identifying the Design Criteria:
In this step brainstorming of different ideas is conducted regarding the probable new products or services and a prospective product idea is identified from them. Only then an appropriate product development strategy can be applied.
Analyzing the Idea:
This step requires an intense analysis of the product idea or concept. The feasibility or relevance of the business context to the business firm or to the consumer is determined by concept studies and market research.
In this step, an identified or selected product idea or opportunity is transformed into a concrete or real concept.
Prototypes refer to the first and preliminary versions of any product or device which will be tested further and then marketed. At this step, rapid prototypes for the product concept are created instead of the final model of the product.
The product development step ensures that the identified concept of the product has been assembled well with business value to make business sense.
2. Design Thinking Method:
Design thinking method has repetitive steps designed to be followed in a certain order for the purpose of promoting collaboration and creativity. The five steps of design thinking method are:
Empathizing: The problem should be emphasized by learning about it from different points of views.
Defining: Defining the area and actual characteristic of the problem.
Generating Idea: Brainstorming to find the best solutions to solve the problem.
Prototyping: Eliminating useless or illogical solutions.
Testing: Asking for feedback.
3. Development Method for Manufactured Goods:
Development method for manufactured goods has eight important steps:
Step 1: Generating idea
Generating idea is the continued methodical research for new product opportunities as well as updating the current product.
Step 2: Screening idea
Screening idea eliminates the infeasible and illogical product ideas through open-minded thinking.
Step 3: Developing and testing concept
Developing and testing concept is important. The idea or concept of the product must be examined or tested through customer feedback at this step. The product concept can be further developed on the basis of this feedback.
Step 4: Business analysis/ marketing strategy
Business analysis/ marketing strategy is basically founded on four P's, which are: product, price, placement, and promotion.
Product: The product or service designed to meet the demand of a target segment.
Price: Decisions regarding pricing have an impact on demand, supply, marketing strategy and profit margins.
Placement: Product placement is a technique of advertising applied by business companies to beautifully promote their products or services by appearing in a TV program, film or on other media.
Promotion: The objectives of promotion are to communicate information about the product to the target segment, describe the product’s value and enhancing the demand for the product. Promotion consists of different kinds of advertisements, marketing campaigns and, public relations.
Step 5: Feasibility study/analysis
Feasibility study/analysis provides information that analyzes the critical factors affecting the success of the product. It involves arranging different segments of people that will test a prototype of the product and then evaluate the feedback. This feedback states the target segment’s interest, experience, and expected product features and also the profitability and viability of the product in development.
Step 6: Product development /Product technical design
Product development /Product technical design combines the outcomes of the feasibility analyses. At this stage, the prototype of the product is turned into a suitable final product based on the feedback of the feasibility study by eliminating the shortcomings of the product and organizing and modifying the departments engaged in the product launch e.g. finance, production or operations, research and development, marketing etc.
Step 7: Market testing or, Test marketing
Market testing or, Test marketing, is the next stage. The motive of this stage is to demonstrate the whole concept- marketing, packaging, advertising, and distribution.
Step 8: Commercialization/ market entry
Commercialization/ market entry is the phase where the final product is introduced to the target market segment. The entire information collected through the aforementioned seven stages of this method are utilized to produce, market and distribute the final product.
Product development is an ever-changing process depending on the nature of the product or the manager who is managing the process. Some organizations have a dedicated team that conducts researches and tests on new products, while smaller organizations may outsource the new product development to a marketing agency.