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PRODUCT DEVELOPMENT PROCESS: A COMPREHENSIVE STEP-BY-STEP GUIDE

Marketing Manager
Anastasia Shevchuk

INTRODUCTION

Every new product development starts with idea generation. Sometimes, the initial idea seems unrealistic and unachievable but a well-structured development process can turn it into a full-fledged product by going through several development process stages.

Millions of customers making purchases on a daily basis, downloading apps from AppStore and Play Market are unaware of what a tedious product development process every product endures before appearing in the app store.

Having a thorough understanding of the market, consumers, and competition is crucial for ensuring that the product can meet a real demand and offer satisfaction and quality to customers.

Let's consider the product development process in detail.

WHAT IS NEW PRODUCT DEVELOPMENT?

New product development is the process of establishing a new product, from an idea generation to a market launch. In other words, product development incorporates a product's entire journey, the set of actions that puts your initial idea into an incredible effect.
The New Product Development (NPD) process is about taking the market opportunity that revolves around customer needs, checking the idea's feasibility, and delivering working software.

The seven stages of the New Product Development process include — idea generation, idea screening, concept development & testing, marketing strategy/ business analysis, product development, market testing, and market commercialization.

These stages can vary depending on the specifics of the market and your business.

STAGES OF THE NEW PRODUCT DEVELOPMENT PROCESS

Idea generation is the first stage of the product development life cycle. This is where you develop your initial product concept.

The ideas can be collected from different sources: marketing research aimed at discovering customer needs and shifts in their preferences, internal brainstorming sessions, competitor analysis, and social media surveys.

A popular brainstorming technique to produce new ideas is SCAMPER, initially developed as a method for boosting students' creativity. Nowadays, companies use it for enhancing creativity, improving or changing their existing offerings. The acronym SCAMPER stands for Substitute, Combine, Adapt, Modify, Put to another use, Eliminate, Rearrange / Reverse. Each verb includes a question that you need to answer for rethinking your product or service.

They can be formulated as follows:

1.Substitute

Which features can be replaced to make your product better?
Can you use this product somewhere else, or as a substitute for something else?
Can you use this idea for other projects?

2.Combine

How do you combine your technology with something else to extend its functionality?
What can you combine to maximize the number of uses?
What would happen if you combine this product with another, to create something new?

3.Adapt

Can you adapt this product to other customers and markets?
Which ideas could you adapt, copy, or borrow from other people's products?
How could you adapt or readjust this product to serve another purpose or use it in the future?

4.Modify

What can you add to change this product?
What element of this product could you strengthen to create something new?
What can be made higher, bigger, or stronger?

5.Put to another use

Can you use this product in some other way?
How would a child use it?—an older person?
Would there be other possible uses if I were to modify the product?

6.Eliminate

Which features can be removed to make the product cheaper, faster, or simpler?
Can I split my product into different parts?
What can I remove without altering its function?

7.Rearrange / Reverse

Can the product evolve into something new?
What if you try to do the exact opposite of what you're trying to do now?
What can I rearrange in some way – can I interchange components, the pattern, or the layout?

Usually, the key to success lies not in a particular method, but collaborative work attracting different people with different visions.

Stage 1. Idea Generation

Stage 2: Idea Screening

After ideas are generated, a business should decide which of them will work best and which are not worth investing in. This stage is about rejecting poor ideas, those not aligned with the company's objectives, and thus prevent wasting money on unprofitable projects.

Here are some popular techniques used to select and rate ideas.

1.Evaluation matrix is a simple rating scale prompting experts to evaluate how well the idea meets different criteria. The matrix lets you compare ideas by each criterion as well as by the total score, giving you a clear review of competitive concepts.

After identifying the most promising ideas you can perform a more detailed financial and value analysis.

2.Preliminary financial analysis is made by experts to estimate development costs and potential gains of a new product. While at this stage there are too many financial unknowns, you can at least avoid too costly solutions.

3.SWOT analysis is another well-known technique for assessing a product's Strengths, Weaknesses, Opportunities, and Threats.

4.CO-STAR is a customer-centered framework to get a view of the additional value created by your innovation.

When considering a new product idea, your company team should find clear answers to the following questions:








The more detailed and persuasive the answers, the higher the chance of success.

Stage 3: Concept Development & Testing

After narrowing down your ideas, put them to the test by developing your concept and testing it during this stage.

Concept Development: The difference between screening a new idea and developing it into a concept is vital. Only after creating alternative concepts for the idea you can evaluate its attractiveness to customers. Concepts should be as precise as possible to provide meaning and be properly tested. Creating vague or general concepts won't allow you to test the validity of your idea correctly.

Concept Testing: Once you've developed your concepts, test them by presenting them to a select group of consumers. Does your concept have a strong enough appeal? You can change your concept until you find success, but don't be afraid to throw out any concepts which fail to grasp your consumers' attention and provide value.
Who is the Customer?
What is the Opportunity?
What is your Solution?
Who should be on the Team?
What is your competitive Advantage?
What are the expected Results?
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Marketing strategy is all about drafting a way to reach out to the targeted audience.

Perhaps the best and most straightforward method is to follow McCarthy's 4Ps of marketing for your New Product Development project.

Here's what the 4P's imply:

1.Product.
Product is about finalizing the software product based on the concept testing report.

Purpose:

a) Product Design
b) Branding Strategy
c) Level of services offered

2. Price.
Price revolves around strategizing around product licensing costs, estimating profit margins, and creating an unbeatable marketing strategy.

Purpose:

a) Pricing Strategy
b) Discounting Policies
c) Payment Modes

3.Promotion.
The hero point or the unique feature that distinguishes your solution from others.

Purpose:

a) Balancing advertising, marketing, and public relations strategy
b) The mediums to reach out to the target audience
c) Maintaining a fair to-and-fro customer communication frequency limit

4.Placement.
How your product is bought and where.

Purpose:

a) Finalizing product distribution strategies
b) Defining the product's scope, i.e., local vs Global

Business analysis provides you with valuable information about:

Stage 5: Product Development

Stage 4: Marketing Strategy/Business Analysis

the selling price of your product (including the minimum sale price);
product market potential;
the break-even point (sales volume or price required to cover development and marketing costs);
expected sales volume and revenue;
the lifespan of your product on the market.
When the New Product Development idea is in place, the market strategy is documented, and the business analysis is completed — it is time for moving on with the product development cycle.

The New Product Development starts with developing the prototype followed by MVP.

1. Prototype

This focuses on creating the UI/UX for the product, which is then shared with the stakeholders. This helps in visualizing how the product will look and how to use it.

2. Minimum Viable Product (MVP)

Once the design, development, and testing are done — the product is launched in the market with that minimal features. The iterations depend on the initial response.
Remember, MVP is not a full-fledged product, it should include only a MINIMAL set of features. MVP is not supposed to be the final product, but it will achieve its goal by subtraction. Categorize 'must-have,' 'nice-to-have', and 'don't care' features and add only 'must-have' features at this stage.
If the business analysis proves the profitability of your innovation, it's time to start moving it from concept to customer — in other words, to build a product marketing strategy, that defines a clear product vision, and helps you determine how to position the new offering on the existing market.
HAVE A GREAT IDEA FOR AN MVP?
The goal of this product development stage is to check the viability of the new product.

There are two market testing strategies to follow:

1. Alpha Testing

Alpha testing is a form of internal testing performed mainly by the in-house software QA and testing teams. Alpha testing is the last testing done by the test teams at the development site after the acceptance testing and before releasing the software for the beta test.

In case of any issues, the changes are planned and implemented before the final go-ahead.

2. Beta Testing

The target groups or customers use the product and give feedback to the company.
It is about listening to the voice-of-customers. If any issues are reported, they are moved back to the development team for bug fixes.

After test marketing, you may need to modify some features or design elements to make your product more useful and attractive in the eyes of your targeted users.

Stage 7: Market Commercialization

Stage 6: Market Testing

After the testing stage, you'll know whether you're ready to launch or return to an earlier stage. The commercialization stage means you're prepared to launch your new product into the market. You'll need to ensure that your production, distribution, marketing, sales, and customer support team are all in place to ensure a successful launch and ongoing campaign.

BENEFITS OF A NEW PRODUCT DEVELOPMENT PROCESS

New products require new ideas. Creating a culture of innovation, where every idea will be heard and tested no matter their role and seniority, will help your business spark new ideas.

Create an innovative culture

Keep pace with your consumers

Your consumers' habits are continually changing due to volatile economies and many other reasons. The new product development process allows you to keep pace with your consumers and ensure your product is still relevant.

Discover new opportunities

By focusing on your customer's needs and not your shareholders, you're able to uncover new opportunities and further your business's growth and development.

CHALLENGES IN NEW PRODUCT DEVELOPMENT PROCESS

Make sure to spend additional time to sync thoughts with the software developer on a global vision and practical implementation. Ineffective communication can also be a factor that results in different expectations from a project.

Different expectations

Redundancy

Sometimes you build more features than needed. Focus on the 'must-have' features first and don't miss the opportunity to launch an MVP.

Not enough attention to tech debt

Changes to the software architecture during the development process can accumulate and become a problem of scalability. The code must be cleaned regularly and stay up-to-date with changes in the product.

Proper testing

It is impossible to overestimate the importance of testing the product. Use your QA team to their maximum advantage and always plan more time for testing than needed, in case something goes wrong.

Budget constraints

Change in the plans can make adding new features a necessity. This may lead to spending extra money and cutting existing features that were planned. Make sure to have an additional budget in your project for unexpected turns in the development direction.

SUMMARY

Coming up with a successful and efficient product development process is certainly not an easy process. However, if done properly, it can eventually skyrocket your sales, increase your company's reputation, and finally bring revenue for other future ideas development.

Every stage of the product development process is different and can make or break the idea. For this reason, proceed carefully, take the right decisions, and involve the right colleagues to make it successful.
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