Creating a product can seem like a simple task; come up with an idea and make the product. Unfortunately, the process is not that simple. In fact, the product development process is a pivotal process on which hinges a company’s future success and life.
When product creation is done right then businesses will be able to carve themselves a comfortable and lucrative niche within the market. However, if product development is done incorrectly, the company may find it incredibly difficult to recover from the losses they will incur from the debacle. In fact, studies indicate that the cost of product failure can sometimes cross a staggering $105,000 per product!
To ensure the new product development process is done correctly and that the stage is set for a successful product, companies need to follow a few key steps. Below, we delve into the process of developing a product.
6 Essential Stages of the New Product Development Process
Firstly, companies must ideate and choose a specific product to build. Once businesses are certain of the products they wish to sell, it becomes easier to align their actions with such ideas and the new product development process can begin.
Some of the ways to ideate a new product are:
- Brainstorming – Team members can come together and bounce ideas off one another. This way, various perspectives can be amalgamated into a holistic product.
- Mind mapping – Team members are provided with a central word/idea and new ideas are mapped around the core concept. These connections can be evaluated to see if a new product idea emerges.
- Focus group – Companies can organize focus groups. This involves interviewing a small group of people to understand their perceptions, ideas, and needs. These are then used to create a product that is aligned with the market.
- SCAMPER technique – This technique stands for:
Substituting a part(s) in an existing product
Combining two or more products to make a super product
Adapting the product to embody higher-order/complex specifications
Modifying either the construction/design of the product
Putting an existing product into a different market/use case
Eliminating certain sections of the old product
Reversing the product engineering to restructure it into something entirely new.
- Storyboarding – Developing a story with a specific situation and creating a product from scratch to fill the need of the story.
Market research & Idea screening
Once companies have a few ideas to work with, they must check the feasibility of the product within the market. This can either be done through secondary research, by reading previously similar studies, or primary research can be conducted to obtain first-hand information.
When doing market research, companies can vet and screen their shortlisted ideas to check whether:
- The product can fit a visible need in their target market
- The product has the USP necessary to attract customers
- The product can be realistically developed by the company with the resources they have
- The product can withstand the test of time.
Developing a concept
Did you know that 42% of companies release products that the market actually doesn’t need? Product concepts can prevent this.
Market research gives companies sufficient information to develop a product concept. The concept refers to the various features & qualities that should form part of the product make-up. This concept is dynamic and constantly changing. It can be modified to incorporate any aesthetic or functional requirements that the final product should have.
MVP testing & Product development
Once the concept is ready, companies can make a Minimum Viable Product (MVP) from that cand test it on the target market. MVPs are the most basic version of the product with the bare minimum features. They can help businesses show customers a working model of their product and seek feedback about it. The MVPs can also identify any product strategy vulnerabilities that need to be fixed before spending their precious resources on making the final product.
The best way to test MVPs is to have customers:
Test each feature individually
Use the MVP in various use cases
Be rough with the MVP to test material endurance – if applicable
Offer suggestions for product improvement.
Collecting this feedback is essential to the product development process. Research in the Zendesk Customer Experience Trends Report 2020 shows that at least 50% of a company’s customers would defect to competitors if they have a poor product experience. So, MVPs can help businesses build a version of their product(s) that has the highest chance of succeeding in the market.
Product validation & Beta launch
The product creation process doesn’t end with new product development. In fact, ideally, companies should first do a soft beta launch.
In a beta launch, some bugs will be known to users, while others won’t. As prospective customers try the product, their test results and feedback can enable companies to distill and fine-tune their product design further. This enables them to make the product highly usable and visually attractive.
Once the product design is deemed suitable by a majority of customers, the product is considered to be validated. From this point, it can be produced in small batches and readied for the official hard launch.
Hard launch & Commercialization of the product
The final stage of the product development process is taking the product to market. This is the stage where companies plan their marketing, sales, and distribution strategies. The product is produced in a larger batch to meet the needs of the larger market. Other tasks performed during commercialization are:
- Contacting wholesale and retail distributors to stock the new product
- Hiring social media, PR, and advertising agencies to create content for product introduction
- Designing a pricing model for the product
- Setting SMART sales targets for the short & long-term.
New Product Development Case Study: Netflix
Netflix is one of the fastest-growing OTTs on the market. In 2020, the company had a large audience base of 203.66 million from around the world – with its largest markets in developing countries like India. By year-end 2020, the company generated a whopping $24.99 billion in revenue. One of the main reasons for this is its robust new product development process.
When creating a product (i.e. TV show/movie), Netflix studies the demographic and psychographic features of its various audience groups. The OTT company charts the cultural revolution taking place in the target country, to identify the content consumption trends it may foresee in the future. This is why you’ll see more local content in non-English languages on Netflix today, than ever before. The company is also financing soaps created by country-specific talent, in order to make the content more relatable and realistic.
Additionally, Netflix is making its content available on numerous platforms depending on the audience characteristics in each market. For example, did you know that India is the only country in the world to have a base, mobile-based Netflix subscription offering today? This is because more people in India have smartphones than they do laptops and smart TVs.
By making their products more localized and accessible, Netflix has aced the process of product creation.
New product development need not be a challenging and confusing task. By following the above steps carefully, companies can ensure they make fewer product development mistakes and create a money-spinning machine.