product-development

The process of product development

• One way to stay ahead of the competition is by developing new products and innovating existing ones

• New product development can be valuable for a number of reasons

  • A successful launch opens up a new income stream

    • Nintendo‘s launch of its Switch console in 2017 turned falling sales into record profits

  • Tastes change, so fresh products keep a business in fashion

    • Skechers Slip Ins are easy to put on, making them a comfortable alternative to lace-up shoes that align well with less formal working lives

  • Novel features create a competitive advantage over rivals

    • The Samsung Galaxy Z Fold offers a folding screen that mainstream phones lack

  • Extra product lines spread risk across different segments

    • The LEGO Botanical Collection targets adult hobbyists, not just children, diversifying sales

  • Regular innovation can improve brand image

    • Unilever’s Dove refillable deodorant pods underline its sustainability credentials

Key factors that influence new product development

The product development process

• There are several steps in the product development process

1. Generate ideas

   • Product concepts are discussed and brainstormed using customer suggestions, ideas from competitors’ products, employees’ ideas and information collected through market and technical research 

2. Select the best idea

   • Ideas are compared, with some being dropped and others chosen for further research

   • This decision relates closely to costs and likely demand

   • Research includes looking into forecast sales, size of market share and cost-benefit analysis for each product idea

3. Develop a prototype

   • This allows the operations department to see how the product can be manufactured, any problems or difficulties arising from its production and how to fix them

   • Computer simulations are often used to produce 3D prototypes on screen

4. Test launch

   • The developed product is sold on a small scale to a limited market to see how well it sells before its full launch

   • Changes may be needed prior to an expensive, large-scale launch

   • Digital products such as apps and software run beta versions, which is a method of test-launching

5. Full launch of the product

   • The finalised version of the product is launched to the entire target market

Sources of ideas for product development

• Product development is important for helping a business stay competitive, grow and meet changing customer needs

• Before creating a new product, a business will explore different sources to get ideas and understand what customers might want

• Customers

  • Feedback, complaints, reviews or suggestions can highlight what people want or need

• Employees

  • Staff working in sales, customer service or production often notice problems or spot opportunities for new ideas

• Competitors

  • Looking at what rivals are offering can inspire new ideas or show gaps in the market

• Market research

  • Surveys, focus groups and trends analysis help businesses understand customer needs and spot new opportunities

• Technology and innovation

  • New inventions or improvements in technology can lead to better or completely new products

• Suppliers

  • A supplier might offer new materials or production methods that help create a new product

• Trade shows and industry events

  • These can show off the latest trends and generate ideas for new products

• Internal research and development (R&D)

  • Some businesses invest in their own R&D teams to create new products or improve existing ones

The importance of research and development

• Product development is a key part of business success, as it supports growth and helps a business compete and meet customer needs

Key benefits of product development

• It helps a business stay competitive

  • Developing new products allows a business to keep up with changes in customer preferences and technology

    • E.g. Apple regularly updates its iPhone models to stay ahead of rival smartphone brands

• It supports business growth

  • New products can open up new markets or increase sales, helping the business grow in size and profits

    • E.g. Greggs launched vegan options to attract new customers and grow its market share

• It builds customer loyalty and strengthens the brand

  • Offering fresh and useful products shows customers that the business listens and adapts to their needs

    • E.g. Coca-Cola released zero-sugar versions of its drinks to meet health concerns and keep loyal customers