What is Product Development? 7 Steps to Making a New Product

Napoleon

Jul 14, 2024 — 8 min read

With the advanced technologies and innovations going around, many business owners and aspiring entrepreneurs are currently releasing new, exciting products into the market. Product development starts with identifying a problem and coming up with ideas in the form of products that solve the problem.

Not every idea comes to life and not every product launched becomes a success in the market. To avoid major hindrances to business success, you have to get it right from the product development stage. In this guide, Foundeck explained what product development is, the 7 crucial steps of product development, why you should have a product development plan, and so on.

What is Product Development?

Product development involves the process of building or creating a product right from the stage of generating ideas till the product enters the market or is launched. It therefore involves the process of identifying needs, coming up with product ideas, researching the market, testing the product on the audience, costing, launching and marketing the product, and so on.

Similarly, product development also involves the process of modifying an old product or making an existing product available to a new target market. Whether a product is created from scratch or renewed to suit a particular audience, product development process continues until the product life cycle ends. As such, you would always see most big brands improving on their product and collecting customer feedback in order to generate more product ideas and adjust to the ones they have.

Factors to Consider Before Developing a Product

Before embarking on the process of developing a product, you should be on the lookout for the following prerequisites as this will help you ensure that you are on the right track and more so saves lot of time and effort.

1. The demand for the product

If you are modifying an already existing product, then there is the possibility that there is a market for it. But in a situation when you are developing an entirely new product that hasn’t been previously produced, then you must ensure that your concept or idea is problem-driven, that is the idea must be one that involves identifying a problem and as such a product will be needed to solve the problem. Apart from that you will need to figure out if the problem is one that reoccurs as this will affect the potential market size and audience you will have.

2. Competitors

Another factor you would want to take into consideration is the competitors. If you have a similar product already in the market, then your product should potentially add more value compared to the available ones. Doing this would potentially help you stand out and gain more audience.

So first, you need to research your competitors and their products. On the other hand, if your product is unique, then you would most likely be only required to meet up with the striking needs of the people.

3. Possibility of producing the product

Not every product idea can be brought to life. If you have a product idea, be sure it can be created. Even if you are able to sketch or map out the product in drawing, be sure to consider the engineering and technical aspects of the product creation.

Moreover, you would to check if there are skilled manpower that are capable of producing the product. While so many products do not require much brainstorming, developing sophisticated machines, equipment and tools might involve a lot.

4. Financial capacity

Another factor you will need to consider is the finance that will be needed to bring the idea to life. For every stage of your product development, you will need funds and while some product ideas require a little amount, others might involve a huge investment before you reach the product launching stage. As such, you would want to ascertain the amount needed and possibly source for investors or creditors if needed.

5. Know your audience

Lastly, you must be able to identify your target audience. This will help you know who your audience is, where they are located, what common characteristics they share and so on. Ascertaining who your audience is and how your product could reach them is key. If you are selling to Gen Z within your locale, then your logistics, marketing and sales pattern would be quite different from when you are targeting them globally.

7 Steps to Making a New Product

Developing a new product involves the following 7 crucial steps that are discussed below

1. Idea Generation

This is the first step involved in developing a new product. At this stage, you need to brainstorm on the idea that you have. While you don’t necessarily have to do this alone, you could involve a friend, colleague or business partner that you trust. Product ideas could spring up from anywhere.

Is there a specific market or community you would like to serve, have you noticed a particular market problem and you wish to offer your product as the solution, is there any specific existing product you would like to modify or are you willing to create a new product based on the feedback you’ve gained from past customers. All of these and more would guide your idea creation process.

In fact, so many entrepreneurs get their product ideas from many sources. You could also get inspiration from competitors, suppliers, customers, newspapers, social media, journals and many more. Your ability to identify specific and unique needs and problems of the people would determine your chances of coming up with a viable product.

2. Market Research

Once you have your product ideas ready, the next stage is to start your market research. A thorough research of the market helps you ensure that you are allocating your time, energy, effort and resources to the right idea.

Creating a product, on the other hand, without going through market research could lead to a waste of resources and frustrate you as an entrepreneur. As such, you would want to devise the necessary steps that will be followed in your market research process.

You could carry out an online survey to see what people view about the product idea. You can research Google trends or run a marketing campaign that targets small individuals from your target audience.

Similarly, you can run a crowdfunding campaign, or ask for feedback through Reddit, Emails, Social media handles and many more. More importantly, you should ensure that your market research features your target audience as they are your end users and could determine if your product will boom in the market or not.

If there are already competitors of your product, then you would want to research them to see what customers are saying about their product and how you could make adjustments following such research. Apart from that, researching your competitors will help you comprehend how they attract customers and the marketing and sales strategies they utilize.

3. Creating a Product development plan

At this stage, you would want to create your product development plan. Creating a product without proper planning could make your development process difficult. As such, you need to find out what your product design, branding, pricing, marketing strategies, costing and so on would be like at this stage.

Importantly, you would want to design a hand sketch of your product. This should be as detailed and clear as possible and it should outline all the various parts of the product. While you can design the product yourself, you can also outsource to a professional as the case may be. Similarly, your product development plan should also identify the materials that will be needed to create every aspect of the product.

4. Creating a Prototype

Creating a prototype involves building a sample product that will be utilized for overall production. Rather than producing a lot of products for public consumption, prototyping involves coming up with a sample that will be used in mass production. As such, this sample can be modified, worked on, improved, etc before coming up with a final one.

The prototyping stage most times involves collaborating with a colleague and an expert in the item production field. While some products could take less time and effort, some could involve adequate brainstorming, modeling, and adjustment before coming up with a desired final product.

Importantly, your final prototype should as much as possible represent the product that will be released to the public. So you can test your audience's interest and likely pricing options with this prototype.

5. Sourcing production resources and partners

Now that you have the prototype ready, sourcing for materials and partners that will aid in the actual production process is next. Here you will need to figure out all the activities, labor, resources, suppliers, and manufacturing units that will be used in production.

Apart from that, you will need to factor in the warehousing, shipping, and delivery options that will be utilized. It is crucial that you get several suppliers of the production resources needed at this stage and compare their costs. You will also want to figure out if the raw materials should be sourced locally or internationally and if social media handles would help in getting these materials.

Apart from sourcing the partners and materials needed for the product, carrying out the product production or development process proper would take place at this stage.

6. Costing

At this step, you should already know the cost of each of your products as it will influence your pricing. You would therefore want to gather all the information and expenses made towards production. This would include labor, raw materials, shipping costs, import fees and many more. It is important that you do not miss out on the necessary costs made during the production at this stage. Once you have your costing properly calculated, then you can determine your profit margin, pricing, and pricing strategy to be adopted.

7. Launching and advertising your product

Now that you have your product ready and you’ve determined the price to sell it out, then you should go ahead and launch the product. The product should be made known to the public, especially to the target audience. Marketing at this stage is crucial and you would therefore need to collaborate with the marketing team to achieve this.

Research made earlier could also be useful at this stage. While you also do not have to go through expensive marketing options to succeed, you must understand your audience and figure out the best marketing options that work best for your product. Having a functional website to aid your product launch and awareness is key. You would also want to maximize social media handles to fast-track your marketing campaign.

What is a Product Development Plan?

A product development plan is a strategic plan or outline that guides a product development process until the actual product is launched. It is a mapped or worked-out guide that a product development team follows to ensure that the aim and objectives of production are achieved. It therefore helps ensure that this team meets up with every crucial milestone without missing out on a step. A detailed plan is necessary for every type of product being produced, as it could help actualize the goal of the product development process.

Why You Should Create a Product Development Plan?

A product development plan is important to a production team in the following ways.

Carrying out a product development process with an already prepared plan helps ensure that every team member is on the same page, and understands the process involved in the production and, as such, prevents conflict and misunderstanding to the minimum.
Also, a plan serves as a checkpoint guide that helps members ascertain if they have achieved the goal of each stage. As such, they can easily maintain or go back on track when needed.
A product development plan helps to minimize risk as it ensures that every step, activity, and strategy is followed. Without a mapped-out plan, a crucial step, follow-up, research or activity, etc could be missed out.
Lastly, the plan helps you check if the product development process is successful. By checking through the plan again and evaluating all the steps taken, you will be able to ascertain if the development process is successful or not.

Conclusion

Developing a new product involves following all the necessary steps and strategies. While most successful entrepreneurs also do not have every aspect of their business figured out right from the start, they take cognizance of their product development process, which they actively build on.