5d Product Development

[Raguel Charrette]

Productdevelopment -- also called new product management -- is a series of steps that includes the conceptualization, design, development and marketing of newly created or rebranded goods and services. Product development includes a product's entire journey, from the initial idea to its market release and later.

The objective of new product development (NPD) from a business standpoint is to satisfy consumer demand to cultivate, maintain and increase a company's market share. From a customer standpoint, it's to ensure a product's value as a quality good or service.

Not every product will appeal to every customer or client base, so defining the target market for a product is a critical step that must take place early in the product development process. Organizations should conduct quantitative market research at all phases of the design process, including before the product or service is conceived, while the product is being designed, and after the product has been launched.

Some organizations have product development centers that make products. For example, Alphabet Inc., Google's parent company, launched a product development center in Nairobi, Kenya, to position itself to serve a growing base of internet users.

Although product development is creative, it requires a systematic approach to guide the processes required to develop, test and get new products to market. Organizations such as the Product Development and Management Association as well as the Product Development Institute help businesses select the best development framework for a new product or service. This framework helps structure the actual development of the product.

Development frameworks, such as the fuzzy front end (FFE) approach, define the steps that should be followed early in the development process, but leave it up to the product development team to decide in which order the steps make the most sense for the specific product that's being developed. The five elements of FFE product development are as follows:

Other frameworks, such as design thinking, have iterative steps that are designed to be followed in a particular order to promote creativity and collaboration. The five steps of design thinking are as follows:

One or more product managers typically oversee and coordinate product development activities. However, these tasks are typically collaborative and involve multiple teams working in tandem throughout an organization.

The continuous and systematic quest for new opportunities includes updating or changing an existing product. The goal is to generate ideas for new products or services -- or improvements to products or services -- that address a gap in the market.

The product concept and functionality are tested on a customer base. Further development of the concept is done based on the feedback. For example, at this stage in car manufacturing, developers create concept vehicles out of clay that are shown at auto shows to elicit consumer feedback.

The optimal way to market and sell a product or service is determined. It might vary depending on if it's a new market or an existing one for the company involved. Market strategy is comprised of the four Ps of marketing: product, price, promotion and place.

Information critical to a product's success is gathered. This entails organizing groups to beta test a version or prototype of the product and then evaluate their experience in a test panel. This feedback communicates target users' level of interest in the product. It also determines if the product in development has the potential to be attainable, viable and profitable.

This stage integrates the results of the feasibility analyses and feedback into the product. It turns prototypes and concepts into workable market offerings, ironing out technical difficulties and prepping business groups for the product launch. This includes research and development, finance, marketing, production and operations. This step should also consist of creating a product roadmap that teams will follow to develop the new product.

Market testing validates the entire concept under development, from marketing angles to packaging, advertising and distribution. Test marketing typically involves offering the product to a random sample of the target market. By testing the entire package before launch, an organization can review the reception of its product before a full go-to-market strategy is made.

This is the stage in which the product is introduced to the target market. It's made available to everyone, and the product lifecycle begins. The life of the product is shaped by the reception of the target market, the competition and similar products it's up against, and subsequent enhancements to the product.

Product development is an ever evolving and fluid process. In some organizations, there's a dedicated startup team that researches and tests new products. Smaller organizations might outsource the NPD process to a separate design business. In larger organizations, the product manager is often the person in charge of product development. Regardless of which framework is used and who oversees new product development, this is just one aspect of the entire product lifecycle management.

Product development is a subset of product management. Product management is the broader category, encompassing product development. Product managers are responsible for each stage of a product's lifecycle. They generate the original concept or idea, manage its development, ensure it is adequately tested, and handle upgrades and new versions in accordance with changing customer needs. Product managers must have a range of hard skills, such as customer data analytics, as well as soft skills, such as leadership and communication.

Product development strategy focuses on the early stages of a product's lifecycle, from generating, developing and testing a concept up until it's launched in the market. Product development teams possess more hard skills than product managers. Development and testing, especially with new technology, requires a range of programming and design skills.

Those pursuing product development roles, especially managerial roles, typically earn a bachelor's degree in fields such as sales or marketing. The day-to-day work includes overseeing the creation of a product development plan and subsequently the actual development. Product development team members typically have multiple roles, such as researching markets and consumer trends, designing and developing the product, and testing prototypes.

Because they fulfill multiple roles, product developers need diverse skill sets. Some hard skills aspiring product developers might want to have on their resumes include computer-aided design, programming languages, market research and data analysis expertise. Emerging technologies, such as artificial intelligence, are expected to create new roles in the product development field in the future.

Product development is a collaborative and interdisciplinary endeavor. While the composition of a product development team may differ depending on the product being developed and the company behind it, specialists from functions such as product marketing, product design and engineering play key roles in a successful product development process. In addition, product managers may convene cross-functional teams and fill various other roles in the product development process.1 While product managers may sound similar to project managers, product managers tend to work on more strategic tasks, while project managers focus more on logistics and tactics.2

Moving from product idea to go-to-market happens during the stages of product development. How many stages there are and how they are defined varies depending on the source you consult or what template you follow. In their book Marketing Management, marketing professors Philip Kohler and Kevin Lane Keller list eight stages of the new product development process, while various companies count as few as four and as many as nine.

A product development plan known as a product roadmap often delineates exactly which product development process and stages that a product development team will undertake. The common stages of product development include:

The conceptualization of ways to improve existing products or create new ones to meet customer needs happens during the ideation, or idea generation, stage. Teams can use different techniques for coming up with product ideas, such as brainstorming and storyboarding.

Ideation is often considered the first stage of product development, although some companies consider the first stage to be defining goals for the product. The early stages of product development may be referred to as the "fuzzy front end" or FFE because of their typically unstructured nature.

Not all new product ideas that surface during the early stages of product development are viable. Idea screening can provide important validation for a product idea. Teams can conduct market research to evaluate a product idea, determining, for instance, whether it meets a market need and would appeal to potential customers.

In this stage, the product idea evolves into a product concept: something that a company can present to target audiences for gauging customer feedback. This presentation can take the form of a detailed description or a prototype that demonstrates the feasibility of the product vision but with more limited functionality.

Marketing is often associated with product messaging, social media and marketing campaigns geared toward target markets. But a marketing strategy could also include sales and market share goals and product pricing and distribution strategy, among other facets.3

Companies may choose to roll out the product in a limited fashion in specific markets before engaging in a wider product launch. In traditional test marketing, sales results are compared among multiple cities for a duration of six months to a year. What product development teams learn from user feedback during test marketing can lead to adjustments in marketing strategy.4

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