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

Marketing Manager

Anastasia Shevchuk

Every new product development process begins with idea generation. Sometimes the initial idea may seem unrealistic and unachievable, but a well-structured development process can turn it into a full-fledged product by way of several stages of development.

Millions of customers who make purchases every single day by downloading apps from the AppStore and Play Market, are blissfully unaware of the tedious product development stages every product must go through before being ready for the app store.

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

Let's take a look at the product development process in detail.

New product development is the process of establishing a new product, from initial idea generation to an eventual market launch. In other words, product development involves a product's entire journey and the set of actions that brings your initial idea into being.

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.

Product development starts with idea generation, which 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 various sources, including 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 and 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 to help you rethink 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 expand its functionality?
What can you combine to maximize its number of uses?
What would happen if you combined 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 or older person use it?
Would there be other possible uses if the product were modified?

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 tried 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 in collaborative work attracting different people with different visions.

After narrowing down your ideas, you must then put them to the test by developing your concept and testing it.

Concept Development: Knowing the difference between screening a new idea and developing it into a concept is vital. Only after creating alternative concepts for the idea can you evaluate its attractiveness to customers. Concepts should be as precise as possible, and properly tested, to provide meaning. If you create vague or general concepts, you will be unable 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.

Once ideas have been 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 which aren't 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 which allows 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 the development costs and potential gains of a new product. While at this stage there are too many financial unknowns to make any concrete decisions, you can at least avoid solutions which are too expensive.

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

4.CO-STAR is a customer-centered framework implemented in order 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:

▪️ 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?

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

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Marketing strategies are all about formulating ways to reach out to your targeted audience.

Perhaps the best and most straightforward method is 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 is about 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 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 and where your product is bought.

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:

• 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

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 your new offering on the existing market.

When the New Product Development idea is in place, the market strategy is documented, and the business analysis is completed, it is time to move on with the product development cycle.

The New Product Development starts with developing the prototype followed by Minimum Viable Product (MVP).

1. Prototype

This focuses on creating the User Experience (UI)/User Interface (UX) for the product, which is then shared with the stakeholders. This helps visualize how the product will look and how it will be used.


2. Minimum Viable Product (MVP)

Once the design, development, and testing are done, the product is launched on the market with minimal features. The iterations depend on the initial response.

Remember, MVP is not a full-fledged product. It should only include 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.

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 of customers use the product and give feedback to the company.

Beta testing is about listening to the 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.

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 a product into a 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.

New products require new ideas. Creating a culture of innovation, where every idea will be heard and tested regardless of the role and seniority of the person who suggests it, will help your business spark new ideas.

Your consumers' habits are continually changing. This could be due to a volatile economy or a variety of other reasons. The new product development process allows you to keep pace with your consumers and ensure your product is still relevant.

By focusing on the needs of your customers rather than your shareholders, you will be able to uncover new opportunities and further the growth and development of your business.


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.

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

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

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

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

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

Coming up with a successful and efficient product development process is certainly not easy. However, if done properly it can eventually skyrocket your sales, increase your company's reputation, and bring in revenue for future idea development. You must build a product marketing strategy if you hope to succeed.

Every stage of the product development process is different and can make or break the idea. You must always proceed carefully for this reason, and involve the right colleagues to make it successful.

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