The need to diversify and add new product lines into your business or modify existing products is an essential element of growth for most companies. But the catch here is that product development is not a piece of cake. An immense amount of research, planning, time, money, and effort are channeled into product development. Hence, companies planning on developing a new product or modifying existing ones must ensure that they undertake calculated planning rather than jumping the gun before to a product launch. In fact, according to experts, the failure rate for a new product launch is often as high as a whopping 90% in some sectors. To increase the odds of your product not having to face the same fate, here are five product development steps to follow:
#1: Identify an opportunity
The starting point for any product development should be to identify the needs of current and potential customers, their level of satisfaction with the competitors’ offerings, their consumption habits, and the technical possibilities for improving the existing products. To achieve this objective, it is vital for companies to have managers with considerable experience and a strategic vision of the company, the clients, the competition, and the suppliers. When you identify a gap between what is being offered and what the actual demands are, it sparks the idea for a product launch.
#2: Measure the opportunity
Once information on market trends and the strategic objectives are gathered, the next step is to analyze the segments that the product is geared toward and predict future buying habits as accurately as possible. Companies can also rely on several product development tools that can help them identify the needs and systematically group them by established criteria.
# 3: Build the concept
In this phase, the new product idea is refined to serve the needs of potential clients and differentiate products from the competition. But how can businesses achieve this? To deal with this situation., begin with getting opinions from leading users who may foresee future needs in the market. Furthermore, build a team with expertise in various disciplines. This includes design and production people for the technical requirements, marketing experts for reaching out to customers, and finance and management experts for determining the funds that are available.The ultimate aim of this step is to stand out from the competition, satisfy the client, and show the highest potential for turning a profit.
# 4: Create a prototype
Testing is an essential step in determining the likeliness of a product to succeed or fail after the product launch. Creating a prototype will also help identify the flaws in the product and make the necessary changes before it is too late. This phase will also help the company to analyze whether a there is a healthy equilibrium between the launch cost and the product’s capacity to return a profit. It is advisable to keep in mind that investing in cost reduction at an early stage can increase profitability in the long run. Cutting down product prices can boost market share, which, in turn, trims distribution costs and discourages the competition.
#5: Product positioning and product launch
Once the product is designed and studied thoroughly, the next step is to decide on its strategic positioning. This is concerned with how you want potential customers to perceive the product? This stage needs to take into account economic factors and functional and emotional factors. Companies should identify how they can create an impact in the minds of the customers regarding the product. This will act as a primary driver for customers to buy the product after the product launch.