Product Development 101
With so many products on the market, people often wonder how companies determine which products to develop and market. Product development is the process from concept to fruition on any offering — whether a new skincare item, kitchen gadget, or a revolutionary social media platform. Typically, product development refers to the entire scope of a product’s lifecycle, including improvements and re-development. According to Nielsen, companies launch an estimated 30,000 new products each year in the consumer package goods (CPG) industry alone, and new product rollouts occur regularly in every other sector.
Understanding the product development process is crucial for your business, even service-oriented businesses where your service is the product. Strategies for product development vary, but there are a few key factors to consider right from the start.
Is it Worth It?
Teams are constantly bringing new ideas to the table. This could mean the beginning of an entirely new company or a new offering from an established brand. Sadly, not every idea is worthy of development past the concept stage.
Before considering any new product, you must answer several questions:
- Is there a market need for this product? If yes, what is the TAM (total addressable market size)?
- Does this product already exist in the market? If yes, what is your unique selling proposition (benefits, price, disruption), and is that USP enough to differentiate?
- Does this product align with overall business objectives? Does it fit your business’s marketing model (margins, distribution channels, brand alignment)?
Typically, the best product development cycles start by identifying and seeking to solve a problem. All too often, inexperienced companies or entrepreneurs fail to address this step first, instead insisting on bringing a product/service to bear because it seems like a good idea.
After you have identified a problem your product or service can solve and determine that a solution would likely be monetizable, conducting a feasibility study is appropriate to assess a product’s potential for success.
Turning Visions into Reality
Once you’ve identified a viable product, it’s time to make that vision a reality. That doesn’t necessarily mean pulling the trigger on a million units right out of the gate. Best practices dictate that you pursue a rollout in stages, starting with a prototype. Further evaluation of the product, the manufacturing process, and the engineering resources needed to make improvements can help refine the product before it scales up.
You might bring a product to bear as an MVP – minimum viable product – to further gauge interest, refine product specifications, and build a loyal initial following. As the Economic Times explains, an MVP is the most basic version of a product launched to gain consumer interest and gather feedback for future, feature-rich versions. Any product you can produce in small runs at a reasonable margin can enjoy a quick turnaround so that refinements can be made at each new generation. By the time the product scales up, it’s been vetted, refined, and tempered, and you can move forward with the confidence that a big rollout will succeed.
With a smart, tiered strategy that puts testing at the forefront and stays agile, you can create new products without the risk of going all in on an untested product.
Smart Strategies = Potential Growth
Ultimately, all companies must launch new products – whether brand new to the game or looking to grow, expand, and stay relevant. As reported in Forbes, an estimated 95% of product launches fail, but this shouldn’t be cause for alarm if you’re ready to step through the process wisely.
- Ideate the best concepts, and leave nothing left unsaid in brainstorming sessions.
- Identify the best ideas and test their viability before manufacturing.
- Be mindful of the P&L, scale up in stages and refine along the way.
Fortunately, product development is an attainable process with a patient and thorough approach — and any business can succeed. Contact us today to find out how Cannella Media can help you achieve success with your product.
