How to Develop a New Product
Developing a new product is essential to the success and survival of every business, especially one that is just starting.
Without a new product launch, a business will not grow or become profitable. However, developing a product is not an easy thing to do; it requires a considerable amount of planning and resources.
This is why you must approach product development in the right way. Anything different from this might result in failure and wastage of all the resources we pour into it.
This guide will proffer a plan of action you can follow to develop a new product with a high margin for success.
What is the Definition of New Product Development?
New Product Development refers to the entire process involved in product launching, from ideation to marketing. Products are usually developed to fulfill a market need or consumer demand. There are several steps involved in the product development process. We have highlighted them below:
Developing a new product can help a company in several ways, such as:
• Replace an existing product
• Expand the market for an existing product
• Open a whole new market
You should understand that there is a difference between developing a new product and a product extension. While a new product encapsulates both, a product extension, on the other hand, is a variation of a product that helps capture a new market.
Steps Involved in Developing a New Product
If you want to develop a new product, there are steps you can take to ensure market acceptance. Following these steps will position your product for a higher probability of success. The steps are highlighted below:
1. Generating a product idea
The very first step on the path to successful product development is the generation of an idea. Most aspiring entrepreneurs find this to be the hardest step in the product development process. This is because ideating a perfect product that will take the market by storm is often a complicated and demanding process.
Only a few entrepreneurs with unrivaled passion and desire for product launch give it a try. However, while building a product from scratch can be tasking, it is easier to iterate upon a pre-existing product.
As an entrepreneur, there’s a model that will enable you to generate new product ideas just by asking questions – the right questions – about the existing products. The model is called “SCAMPER.”
Let’s briefly dissect it.
Substitute: “What can we change in our new product, the process involved, the people in charge, etc., to make it better?”
Combine: “Which two ideas, products, services, etc. can I combine to generate a better product?”
Adapt: The next step in the SCAMPER model has to deal with adaptation. Here, you will ask questions about what you can adapt from other sources to enhance your product development process.
Modify: This part requires an in-depth understanding of your product. The question here is, “What part of this product is less important, and thus can be minified?” The question is also, “What can we enhance to make this product better?”
Put to another use: “How else can consumers use the product?” It helps you to discover if there are other ways to utilize your new product.
Eliminate: This step involves eliminating the “extra” parts of your product. This can be anything from parts of the production process to components.
Rearrange (Reverse): here, you will ask questions like, “What can I rearrange to get a new, better product? What might happen if I reverse this process? etc.”
Once you establish your product idea, the next thing to do is to research. Having a notion that the market will instantly jump at your product can be disastrous. Often, entrepreneurs make the assumption that they are creating what the market needs. Unfortunately, most times, consumers buy more of what they want than what they actually need.
Nobody would like to develop a product you think will help solve a problem, only for consumers to reject it.
To ensure that there is a place for your product in the market, do product validation. There are several ways by which you can accomplish this. They include:
• Discussing your idea with family and friends who have the problem you are trying to solve
• Conduct an online survey
• Sourcing case studies of companies who have plied a similar route as yourself
• Deploying in-depth competitive analysis
Follow these guidelines will help to establish whether your product will be successful or not. Prioritize feedback from an unbiased besides friends and family. Also, keep in mind that not every potential customer who says they will purchase your product will do so eventually.
The next step in the product development process is the planning stage. This stage involves establishing every aspect of your product from what it will look like to how it will function. If you do not adequately plan your product, there is a high propensity that you will encounter insurmountable problems while prototyping.
Start with a detailed product sketch; if you can’t do it yourself, hire an illustrator. Sketch the different components you expect your product to have.
Consider the kind of material(s) you will use. Is it premium or standard? Plan out every aspect of your product in this stage, including packaging and labeling.
Most entrepreneurs delight in this stage. Here, you will manufacture a finished product. Depending on the success or failure of this product, mass production will follow if successful.
You can either prototype your product yourself or engage the services of a third-party depending on the complexity. For instance, entrepreneurs in the cosmetics and food industries usually prototype their products themselves. Same as some in the fashion, pottery, and design industries.
Certain objects need more expertise to create, e.g., accessories and electronics. Such items require 3D rendering, which you can use with a 3D printer to manufacture the product.
Once you have your prototype, the next thing to do is to test it. Assess if it does the following:
• Satisfy the needs of your potential customers and solve the problem it was created to address
• Effectively execute the tasks it was designed for.
• Justifies its development and manufacturing costs
• Achieves an equilibrium between the launch cost and its profit capacity
If your product scales through the testing stage, the next thing to do is full-scale manufacturing.
First, gather for the materials you will need and identify a manufacturing partner. Do not forget to sort out the storage, shipping, and warehousing of your products post-manufacturing.
If you get to this stage, that means your product is ready for launch. All the steps above should help you establish what your cost of goods sold (COGS) is. With this information, you can then determine the retail price of your product as well as the gross margin.
8. Positioning and Launching
The final piece of your product development process is to decide on how to strategically position it for market launch. To do this, you will need to consider several elements, such as economic, functional, and emotional factors.
Strategically positioning your product before launching will help distinguish your product from that of competitors. Consequently, your product will resonate with your target audience, thereby enhancing its acceptance and success.
The product development process is not straightforward. It involves a lot of trial and error, and you might have to go over specific steps more than once. If you follow the steps above, you will eventually develop a product that solves a problem and is profitable.
Instead of going through all the steps above – which could be daunting – there is a one-stop-shop solution you can use!