Products and services rendered are what keep a business afloat. You can’t have a business if you aren’t selling a product or rendering a service to the public. And so that is why understanding this topic is essential. To develop a product doesn’t necessarily mean you have to start from the very beginning.
It can also mean to adapt, modify, combine or repurpose an existing product. The product may be one belonging to your company or a competitor. Today, we will look at the steps to follow when developing a new product or service.
Understanding The Life Cycle Of A Product Or Service
Before we get into the topic, there is a principle we would love to explain, and it is the life cycle of a product. This explanation is relevant for two reasons. The first is what to expect if you decide to launch a brand new product, and the second is the various stages the commodity will go through.
Both are important because it gives you a picture of your product. And if you decide to rebrand an older product and relaunch it, you need to understand what stage that product is at before considering it. The following are the different stages when launching something:
- Development: This is the stage where investment and research take place.
- Introduction: The company introduces the product or service to the market.
- Growth: The product or service is growing and establishing itself in the market. An increase in revenues and profits usually accompanies this stage.
- Maturity: The product has its regular customers in the market, and the cost of production fall, but the price increase because of the competition.
- Decline: New products from competitors are in the market, sales and profit start to fall.
It’s best to tweak or modify a product when at the maturity stage, where the growth peaks. Apple does this with the iPhone, releasing it when it has gotten to the maturity stage. They do these by adding new features and tweaking the phone’s body.
These changes keep their product fresh and their customers happy. Now that we have gone through the cycle of a product. And the possibility of creating a new one from an existing one. Let’s now look at the steps to build a product from scratch.
Generating Your Idea
An idea can hit you in a flash, or you may have to brainstorm it. When thinking of an idea, consider some of these questions:
- What product or service do I use that inconveniences me?
- Is that inconvenience the result of the product or service lacking in an area?
- If it is, how can I make it better?
- Is it possible with the current technology available to us?
- Is the inconvenience so dreadful that people will buy my product?
You can also go through the same thought process if it is for an entirely new product. Because coming up with an idea isn’t easy, you can ask family, friends, work colleagues, and even customers what they think about the concept and ask for their input. You should also consider other factors, like if the idea follows regulatory rules and the possible environmental impact of the product.
Survey the Market
Now that the thought is crystallizing in your mind, it’s time to conduct some market research. This step is necessary because you want to confirm if a market for the proposed product or service exists. Surveys and study groups are two very effective ways to get feedback.
The surveys and study groups will show if the product solves the most pressing needs of the target market. Aside from potential customers, it is also wise to look at the competition in the market. Studying the competition in the market allows you to see what they do right and wrong, needs not being met by them, and potential gaps you can exploit.
Pick a Team
Picking a team for the project is a crucial step. You need the right mind and skill set to launch the product successfully. To find a dedicated team, you would need to identify the various positions to be filled and look within the organization to see if you have all the skillset available or if you have to employ some new staff for the project. The team can be a permanent one or a temporary one depending on the project plan. A piece of advice is to pick a project leader who will be held responsible and accountable for the product’s progress.
Draw up a Pricing Strategy
Be strategic in picking the price at which you want the product to sell in the market. The pricing of the product will depend on different internal and external factors. Some of the factors that can affect the price include:
- Cost: The cost will comprise the unit projected cost of raw materials, packaging, distribution, general overheads, and cost of development. Calculating the cost to produce one product help in deciding the price.
- Pricing strategy: If your company chooses penetration pricing, they will need to set the price as low as possible to enter the market. While if you go for a value-based pricing system, then you set the price as high as the customer will pay.
- Market: The target market you are going for will play a role in determining the price. If a high-end market, a relatively high price may suffice.
- Competition: The price of similar products already in the market can also influence the price.
Choosing the price is a delicate decision, so consider all likely factors.
Finance Your Idea
Financing can be tricky. Every investment in a product starts with success in mind. So it can be tempting to pour all your resources into it at once. While feasibility studies, pricing, and even cost may all be fine, keeping your spending in check is more effective. You can divide the project into various stages and release additional funds at the end of each phase if it meets the criteria set by the project team. Of course, the amount would have been budgeted and agreed upon, and even if the project goes above the budget, it should be a reasonable variation.
If you are struggling for funds to finance the project, then you can try the following options:
- Borrow from the Bank
- Borrow from family or friends
- Borrow from Credit Unions
- Government Grants
- Pitch your idea to an angel investor
Secure your Intellectual Property
If your product is one of a kind, you should file for a patent for it. Protect that idea of yours from the competitors.
Market The Product
When marketing, it’s best to employ a content strategist or have one in-house who can help craft the words that resonate with customers. Their job is to increase the customer experience. While marketing the product, ensure you tell customers how the product will help in their day-to-day life. Make it something they can easily understand and support.
The medium in which the marketing team will advertise depends on the target market. The marketing team will have to research and use the most effective channel. Those channels can be through blogs, emails, social media platforms, paid adverts, etc. The essential point to note here is the appropriate channels should be where the company’s brand voice is heard.
Launching the Product
After the marketing and advertising are done, it’s time to launch the product to the public and watch it. Put all the efforts necessary into launching as you planned—then reap the rewards of all that hard work.
In conclusion, developing a new product is a big task that requires a lot of time and resources but also one that most businesses will have to carry out to remain relevant in today’s market. There needs to be a high level of expertise, experience, patience, and funds to bring an idea to the customers. If the company plans to reintroduce a product, they need to understand the various lifecycles of their products and ensure they reintroduce them to the market at the right stage.