Product Development Process – 6 Simple Stages With Example
February 14, 2022 Edwin Kooistra
Product development in any company or organization is not only a core operation but is around what every other function is focused on because what you develop in your organization is what you take to the market as your value proposition.
- What Is Product Development?
- Why Is It Important to Have a Product Development Process?
- Who Is Involved in the Process?
- Tech Product Example of a Product Development Process
What Is Product Development?
Product development includes all the activities, steps, and efforts that any company puts in when they want to bring a new offering, product, or service to the market.
The idea for a product can be conceptualized anywhere in a company’s product development lab, during customer focus group sessions, or even derived directly from customer feedback.
The new product development process involves a lot of systematic steps that are spread across the whole organization and involves multiple stakeholders from the organization’s competitive environment as well.
It is pertinent to note here that revitalizing an already existing product or service or optimizing it based on customer feedback or re-evaluation of market needs, also falls under product development and follows similar stages and steps just like for a new product from scratch.
Why Is It Important to Have a Product Development Process?
Product Development Process (PDP) is not only critical to an organization’s first venture into its target market but, as research has proven it is imperative to its survival, sustained growth, and eventual progress into newer areas and segments as well. The product development process itself is known as the lifeline of companies no matter which industry they belong to.
The product development process delivers the achievement of important objectives which are delivery of customer value, betterment of the community in general, and continued growth of the company without stagnation. Without a new product development process in place, any organization would not be able to survive in today’s competitive market as they will not be able to cater to their customers’ evolving needs or compete with their adversaries.
Let us look at the product development steps that make up the process.
1. Idea Generation
In this first stage, the idea for a new product or some new features to be added to an existing product is generated using several methods which include a SWOT analysis, customer feedback, focus groups, market research, etc. Alongside, the possible buyer persona and market segment for the product or service is also defined and the ideas are then pitched to decision-makers within the organization.
2. Defining The Product
In this second stage, the idea is then further refined to cater to the market needs of the market segment in the more demarcated end detained manner. The core functionality of the product or service itself is highlighted and made understandable for the segment; it is being targeted towards. Market size and possible revenue streams for the product are also developed and researched during this stage.
3. Developing The Prototype
This is a very critical juncture for the product development process (PDP). At this stage, the product development team needs to put up the prototype for the product as well as create a minimum viable product (MVP) that they can take to market. Here the product development process allows for the prototype to be tested within the organization and the MVP to be taken to the market for testing. This allows for market research and customer feedback to be incorporated into the product for further improvements.
4. Detailed Designing
Now that feedback has been received from the market and relevant stakeholders, it is incorporated into improving the product and developing a detailed design that caters to the needs of the target segment.
An iterative process is followed in which constant feedback and communication are developed with the market, especially the targeted customers. While this is happening, alongside the marketing and sales team start working on the product launch and sales campaigns for the same, to ensure a timely and streamlined process execution.
5. Testing and Validation
Testing validation refers to not only ensuring that the product developed is well suited to be operational for the market segment but also that it is validated and accepted in the eyes of the customer.
This also involves validation and testing within the organization itself in terms of financial budgets, sales revenue projections, and the achievement of strategic objectives. This is the last stage to ensure that the product or service is good enough to deliver a value-based proposition to the customer while generating revenues for your organization with possibilities of future growth.
Because after this stage the product would be taken to the market and then they won’t be any possibility of turning back to revisit the product development process(PDP) to either improve the product or revise the business plan.
6. Market Launch
This is the stage where the product is finally taken to market in the form of a launch. The sales and marketing team start working their magic and executing the plans that they had been working on. The production is put into full swing with the hopes that the revenue streams will be generated soon enough, to support the acceptance and growth of the product in its target market segment.
Who Is Involved in the Process?
Traditionally it is accepted that marketing, product engineering, manufacturing, and technical services are involved in the product development process.
But in changing times and evolving dynamics of both the industry and academia, it is now a well-accepted fact that all different departments in an organization such as finance, operations, human resource as well as the stakeholders outside the organization especially the customers, distributors, and third-party vendors, are also a part of the new product development process as they not only provide useful feedback but their ideas can be generated into profitable products.
It is also noted that in one way or the other all the internal, as well as external stakeholders, are involved in the process at some stage.
Tech Product Example of a Product Development Process
Zoom, a cloud-based conferencing tool despite existing since 2011 came to the limelight in 2019 as one of the most powerful tech tools, especially in the covid pandemic.
The team at Zoom used the product development process and optimized the tool using a customer-focused approach where flexibility and product-led growth were introduced into the software experience and business model, making it one of the most successful product developments (of an existing solution) in recent times.