Every product for sale went through many steps to get there. Whether it’s a car, a face moisturizer, or a piece of software, that item is the result of aproduct development process—a cycle that encompasses idea generation,market research, planning, and more.
Here’s how a smart product development strategy can turn a product idea into a commercial offering with longevity.
What is a product development strategy?
A product development strategy is a business practice companies employ when they build and refine products. A successful product development strategy enables a company to create goods—either new product concepts or the modification of existing products—that customers want to buy.
可以是一个产品开发策略mix of proactive and reactive strategies. Proactive strategies attempt to grow a business, perhaps by introducing existing products to new markets. Reactive product development strategies aim to hold onto market share and remain competitive in a company’s existing market (also known as a defensive strategy).
5 types of product development strategies
Here are five product development strategies for businesses of any size or industry:
1. Market expansion
A market expansion strategy involves broadening the target audience for an existing product by setting up shop in or offering delivery to multiple markets. To succeed, a company may need to adjust itsmarketing strategy, expand its web presence, or open new retail locations. One example of market expansion is when coffee chain Dunkin pushed beyond its original New England hub to set up shops in areas throughout the United States.
2. Product improvement
A product improvement strategy makes positive changes to an existing product or product line—perhaps by tweaking theproduct designin response to customer feedback or technological advances. A development team can get feedback on a product by conveningfocus groupsor scouring online reviews and social media accounts to see what the public is saying about it. This strategy prolongs a product’s development journey, keeping the product relevant for longer, which can lead to greater profits and offset development expenses.
3. Product extension
Product extension is abusiness strategy利用一个知名品牌的一部分new product name. For example, when Ford made its first major foray into electric vehicles, it named a key product the Mustang Mach-E to take advantage of the strength of the Mustang brand. The original Mustang was a gas-powered sports car, and the Mach-E is a battery-powered SUV, but market testing convinced Ford to embrace product extension.
4. Disruptive innovation
New product development strategies have the potential to shake up industries that are stagnant or have room for improvement. The technology industry has become synonymous with disruptive innovation as new technology upends old business models—Uber and Lyft in the taxi industry, Airbnb and Vrbo in hospitality, and Netflix and Hulu in television. Often, the disruption involves bypassing third-party brokers and selling goods directly to a consumer, which often lowers costs and improves efficiency.
5. Diversification
Product diversification ensures a business avoids being overly reliant on one product or niche. Companies can diversify by adding new product lines, launching ancillary businesses, or buying up other companies. An example is the ecommerce bedding company Brooklinen, which entered the pillow market with the subsidiary brandMarlow．
How to create a product development strategy
A complete product development strategy is built on six steps.
- Product ideation
- Product idea validation
- Prototyping and testing
- Production and launch
- Product marketing
- Product analytics
1. Product ideation
The product ideation process involves brainstorming newproduct ideas．If you’re juststarting a businessand trying to create a new product from scratch, you might think about gaps in the marketplace. What customer pain points aren’t being addressed by products currently for sale? If you have an established business, think about what items or services your existing client base would appreciate on top of your current offerings.
2. Product idea validation
Next, you’ll need tovalidate your product idea, or determine whether your product can command a large enough market to justify the potentially expensive development process. To get a better sense of the potential demand for the product, you can performmarket analysis, conductfocus groups, study similar products, orlaunch a crowdfunding campaignto see if there are many people who would want to back your product.
3. Prototyping and testing
If you’re confident your product appeals to a customer base, you’re ready tomake a prototype．大多数原型(或者花费大量的时间和金钱both) to create, but they’re necessary in order to test and improve your product before you commit to launching it. For a physical prototype, you might build it by hand, use a 3D printer, or outsource the work to a specialist.Product testinginvolves getting feedback from people about the prototype and using that to improve the product. You’ll be testing for a combination of product functionality, safety, and customer satisfaction.
4. Production and launch
In order to produce the item at scale, you’ll need a product development process. You may need reliable relationships with manufacturers that can turn raw materials into finished products. If you want to pick from products that manufacturers have already made, you could choose to partner with aprivate labelmanufacturer. In this case, you would simply put your brand name on an existing product. Once you decide how to make the product, you’re ready to list it on your ecommerce site for sale.
5. Product marketing
The goal ofmarketing your productis to educate the public about why it is right for them. To do this, you should come up with and offervalue propositionsfor the product. The product could, for example, be the best quality or most affordable option in the market. Marketing your product may also involve offering package deals that bundle your new product with your more well-established items, or offering a discount on the new product.
6. Product analytics
Once you’ve launched your product, you’ll need to track its sales in order to have information on how you can make it better for current and future customers. When you sell via an ecommerce platform like Shopify, you can seesales reports and analyticsfilled with relevant up-to-the-minute data, including net sales, sales breakdown, net sales by channel, net units sold by traffic source, and customer profiles. You can use this data to make continual improvements to the product.
Product development strategy FAQ
How do you identify customer needs and preferences?
In order to gauge customer needs and preferences, you can conduct focus groups, do market research, look at comments on your website, or use customer relationship management software. You could also study search engine terms for trending topics and run surveys among people in your target market.
How do you generate ideas for a new product?
One way to generate new product ideas is by looking for gaps in the market to see what customer needs aren’t being served by current offerings. You could also research what existing products don’t seem to adequately address customer pain points, like a skin care product that looks fantastic but washes off too easily.
How do you test and validate a product concept?
您可以测试和验证你的产品概念sharing them with small test audiences and measuring their responses, feedback, and level of satisfaction. You may also try crowdfunding to see how many people would be willing to pay in advance for the product before you develop and launch it.
What impact does customer feedback have on product development strategy?
Customer feedback on a product or prototype should be taken very seriously, because no product can thrive without a customer base. If a customer reports that a product fails to meet expectations, is too expensive, or is dangerous, businesses need to know that before a big product launch. Conversely, if customers rave about a test product, a business may want to make more of it or design variants that will appeal to additional audiences.