Product Development
Understanding Product Development
- Product Development is a crucial part of the business strategy, involving the process of designing, creating and marketing new products.
- This process is undertaken with the goal of enhancing a company’s market position, improving sales or meeting customer requirements.
- Product development encompasses various stages from the initial idea conception, through design and development to final production and marketing.
Stages of Product Development
Idea Generation
- Starting with idea generation, this involves brainstorming and research to devise potential new product ideas
- Ideas can originate from various sources such as market research, customers’ feedback, competitors’ products or technological innovation.
Idea Screening
- The second stage, idea screening, involves evaluating the feasibility and market potential of these ideas.
- The primary aim here is to eliminate unfeasible ideas early, hence saving time and money.
Concept Development and Testing
- Once an idea has been refined, it undergoes concept development and testing.
- This involves creating detailed product concepts and testing them out with target consumers.
- It is to identify how well the proposed product would be accepted by the consumers.
Marketing Strategy Development
- Now a marketing strategy needs to be developed around the product.
- This includes defining the target market, positioning for the product, pricing, distribution strategy and marketing communication.
Business Analysis
- During the business analysis stage, businesses evaluate the financial implications of introducing the new product.
- Projections for sales, costs and profit are made at this stage to assess the viability.
Product Development
- After thorough analysis, the product concepts are translated into physical products in the product development phase.
Test Marketing
- After the product has been developed, it undergoes test marketing where the product is marketed in a specific geographic area as a trial run.
- Test marketing helps to evaluate real-world customer responses, providing valuable learning for the full launch.
Commercialisation
- The final stage of product development is commercialisation (or full launch), where the new product is introduced into the market.
- During this stage significant promotional activity is often seen to create awareness and gain acceptance for the new product.
Importance of Product Development
- Product Development is vital for a business to stay competitive, meet changing customer needs and foster growth.
- With the help of new product development, a business can explore new markets, attract new customer groups and increase sales.