Product Development

Before you can even consider opening an online eCommerce business you need a product or service. The process of developing a new product consists of six steps, during which the product goes through the stages, from conceptualization to launching it on the market. This process allows tasks to be broken down into smaller parts and the coordination of cross-functional collaboration. Find out how to use it while working on your products.

IDEA
RESEARCH / PLANNING
PROTOTYPING
SOURCING
TESTING
COMMERCIALIZATION

Working on a new product is exciting, but it can also be quite a challenge. The development of each new product is different, even though each must go through the same steps, from idea to market research and prototype development. However, there are some tips to help you create your own new product development process.

The process of developing a new product consists of six steps, during which an idea becomes a concrete product. It includes determining the business need, conducting market research, conceptualizing the solution, preparing a roadmap, and creating a minimum profitable product.
Developing new products has evolved over the past few years. Today it is usually laid out, breaking each step into six separate steps. This makes it easier to organize the process and break down the final products of the project into smaller tasks.
A properly implemented product development process helps not only simplify the introduction of new products to the market. It also supports cross-functional collaboration and facilitates communication.

Now let’s look at the life cycle and define the six phases of a product. This will help you successfully add new products to your offer.

1. Collecting ideas

The first step in the product development process is gathering ideas. At this stage, brainstorming sessions are organized on concepts generated from customer needs, prices, and market research.

When implementing an idea for a new product, it is worth considering the following factors:

Target Market: The target market is the customer profile for which you are creating the product. You should define it before starting work in order to adjust the product appropriately from the beginning.
Existing Products: It’s a good idea to look at your current portfolio when creating new products. Are there already products that meet a similar business need? If so, does the new concept differ enough to guarantee profitability? By answering these questions early on, you increase the chances that your new idea will be successful.
Features: While it is not yet necessary to create an accurate report of your new product’s features, it is helpful to discuss in general what you want it for. Think about what a given product should look like and what it will interest potential customers.
SWOT analysis: early identification of the strengths and weaknesses of the product, as well as opportunities and threats, will allow you to build the best possible version of a new product while ensuring that it differs from the competition’s offer and responds to market demand.
SCAMPER method: use different brainstorming strategies to make an idea concrete, for example, the SCAMPER method. It consists in replacing, combining, adapting, modifying, using for another purpose, eliminating, or completely inverting the product concept.

To verify a product concept, it’s a good idea to document your ideas in the form of a business case. This will allow all team members to clearly understand the product’s initial features and launch objectives.

2. Research and Planning

Now that you’ve written your business case and defined your target market and function, it’s time to define your product. This step is also known as scoping or developing an idea and is entirely focused on fine-tuning your product strategy.

At this stage, define the product in detail by:

Business analysis: business analysis consists in preparing a distribution strategy, e-commerce strategy, and detailed market analysis. The purpose of this step is to provide the basis for building a product roadmap.
Value Proposition: These are the customer needs that meet your product. Think about what distinguishes it from similar products on the market. This document can be useful for market research purposes and in defining your marketing strategy.
Success rates: It is important that you define your success rates clearly from the outset so that you can easily see if a product has been successful when it is launched. Are there any key metrics you want to track? For example, these could be KPIs such as the average order value, or specific metrics such as meeting your organization’s goals.
Market Strategy: Once you’ve identified your value proposition and success metrics, start thinking about the right marketing strategy. Take into account how you want to promote your product, for example on social media or blog. While this strategy may change depending on the final version of the product, it is a good idea to start planning it during the definition phase.

After the above ideas have been made concrete, it’s time to build a minimum profitable product by going to the stage of creating a prototype.

3. Creating a prototype

At this stage, your team will conduct research and create documentation, write a business plan, and build a product.

The first prototype can be a simple drawing or a more complex simulation of the original design. Such prototypes help to identify potential risks before creating a product.

At the stage of creating a prototype, details such as:

Hazard Analysis: Before building a physical product prototype, it is very important to analyze the potential risks associated with its production and create a hazard log to notify your team members about them. This way, you will prevent potential delays in bringing your product to market.
Development strategy: the next step is to develop a development plan, meaning understanding how you will assign tasks and setting their timeline. One way to schedule tasks and estimate the time needed to complete them is through the critical path method.
Feasibility Study: Then it’s time to evaluate your product strategy for feasibility. Determine if the due dates are realistic with the resources available. Otherwise, adjust the assignment dates accordingly and ask additional stakeholders for support.
Minimum Profitable Product: The end result of the prototype stage is a minimum profitable product. This is a basic version of the product with only the features that allow it to be marketed, but nothing else. For example, for a bicycle, the minimum profitable product is the frame, wheels, and seat, but not accessories such as a basket or a bell. Building a minimum profitable product will allow your team to get the product to market faster, and additional features can be added later, as available.

4. Sourcing Initial design

In the pre-design phase, stakeholders work together to create a product sketch from the prototype. The design should take into account the needs of the target audience and complement the key functions of the product.

Creating the perfect product design may require several iterations and ordering the required materials from distributors.

To prepare a preliminary draft:

Order your supplies: This is a very important part of the pre-product design process. It may require working with multiple suppliers and ordering the right materials or creating your own. The materials will be delivered from different locations, so it’s a good idea to document this in a document for other team members to refer to later if needed.
Communicate with stakeholders: During the planning phase, it’s a good idea to systematically communicate with team members to make sure work is on track. Share weekly or daily progress reports to keep colleagues up to date on project status and receive approvals when needed.
Receive initial feedback: After creating a project, check what senior managers and stakeholders think of it. Customize the final design of your project based on their feedback until it’s ready for development and implementation.

After your design is approved and ready for a follow-up, proceed to the verification stage to perform final testing before the product goes to market.

5. Verification and testing

Before a product is released, it should be verified and thoroughly tested. This process ensures that the product is functional in all respects before it is released to the public.

To check the quality of the product, follow these steps:

Idea development and testing: Although the prototype has already been successfully completed, problems may still arise as the idea develops. These can include, for example, software design or the production of a physical product from a prototype. Ask team members and beta testers to test different features to ensure a smooth transition to the next stage.
Testing customer-visible features: at this stage, you need to check that the features available to end-users are working properly, without code or interface errors. This also includes checking e-commerce functions and confirming their stability.
Marketing testing: Before you start producing your final product, test your marketing plan to make sure it is working correctly and without errors. This is also the right time to make sure all your campaigns are properly set up and ready to go.

After the initial testing phase is complete, it’s time to move on to building your final product and launching it to the market.

6. Commercialization

The time has come to commercialize the concept. This includes placing the product on the market and placing it on your website.

At this stage, the design has been finalized and the feature development and marketing strategy have been checked in terms of quality. As you face the last iteration, you can feel confident and prepare for the final product release.

At this stage, you should focus on the following activities:

Product development: This is building a physical version of the product that will be made available to customers. This step may require production or, for software, additional engineering. Share the final version of the prototype and all iterations of the minimum profitable product with your team members, enabling them to produce the final version that complies with all requirements.
E-commerce implementation: upon completion of the development work related to the project, the development team will publish the relevant e-commerce materials. This may require additional testing to ensure that the deployed product is performing as designed in the customer visible functionality testing phase.

The final version of the product has been published. Now you just need to check whether it was successful based on the predetermined indicators.

The concept of a new product

A new product is understood in various ways – depending on whether it is defined by the producer or the recipient. New products can be divided into six categories.

“New products on a global scale, creating a completely new market,
new product lines allowing the manufacturer to enter a given, already existing market for the first time,
additional products, complementing the lines of the company’s products already on the market,
improvements, i.e. new products that replace the products previously offered by the manufacturer, which are characterized by improved quality and higher value perceived by buyers,
products with a changed market position, i.e. products previously offered on other markets and intended for new markets or for new groups of buyers,
new products that fulfill similar functions at lower costs. “

In terms of marketing, product innovations are understood as:

completely new products that are to meet the needs of the unmet so far,
products that meet the expectations of recipients that were previously satisfied with other products.

Distinguishing between new products is essential to properly define the demand creation process.

Product Development Strategy

The product development strategy assumes three possibilities for the development of the company.

improving existing products,
introducing innovations to improve the quality of products already offered,
creating and introducing new products to the market.

The sale of changed or new products may strengthen the current position on the market. The product development strategy is a very important factor influencing the functioning of the company, operating in the market with rapid technological changes.

Elements of the strategy

The product development strategy consists of:

Plans to match the offer to buyers,
Informing that the offer is available on the market,
Ensuring the delivery of the product so that the purchase and sale transaction becomes possible,
Product pricing.

Product innovation strategy

The basic stimulus influencing the choice of a product innovation strategy are external changes, e.g. socio-economic development or changes in buyers’ expectations, affecting the functioning of the company.

The essence of the product innovation strategy is deliberate actions taken by the manufacturer, the effect of which is to offer new products to the previously served market, which are to effectively stimulate the demand and ensure the achievement of the manufacturer’s development goals.

The product innovation strategy can be implemented in two ways:

by purchasing a license, patent, finished product, acquiring the product through the acquisition of another manufacturer – the advantages of this solution are the avoidance of costs related to research and development activities and the associated risks, as well as the possibility of quick and easy product success. This solution does not involve the entire human resources of the company, but it is very expensive,
creating and commercializing your own product – a multi-stage process that engages the company’s resources, also including demand and supply analyses, the product testing phase, shaping individual marketing elements – mix.

Types of product innovation strategies

Taking into account the type of a new product, three strategies can be distinguished:

The strategy of technological modification of the manufactured product – is characterized by minor changes for the recipient but requires significant modifications from the manufacturer, e.g. changes in technology, and materials. This is often dictated by changes in the law or product quality requirements,
The strategy of imitating a competitor’s product – boils down to offering a product unknown on the market, drawing at the same time from the production technique and the offer of other companies whose products have been successful in other markets. Observation of buyers’ behavior in other markets, as well as the experience of competitors, allow achieving success in a relatively short time,
The strategy of an absolutely new product – it consists in implementing a product that is new both from the point of view of the producer and the recipient.

The goal for the manufacturer is to reach the position of the market leader. For this to happen, it is necessary to introduce new technological and marketing solutions.

Another division of the strategy

Another division, taking into account the priority of introduction as well as the degree of originality, distinguishes two types of strategies:

Innovation leadership strategy – in order to apply this strategy, developmental, technological, and financial potential is necessary. It aims to maintain the position of a leader and reap the benefits resulting from it,
The strategy of imitation in the field of product innovations – is the response of a given sector to the actions of the leader. The literature distinguishes five varieties of this strategy:

creative imitation strategy – means building a product based on the leader’s experience by improving the solutions implemented by him,
fast imitation strategy – assumes the purchase of a license and know-how as well as copying the activities of other companies in order to build a strong position,
A flexible specialization strategy – is based on the change and adaptation of the products that the leader had in the offer to suit the needs of buyers,
commissioned imitation strategy – implementation of changes commissioned by another company; this happens using a prototype or pattern from the company that orders the product,
later imitation strategy – consists in implementing improvements in small steps with a delay in relation to the leader’s actions.

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