Last month, the consulting firm I was a consultant for began the process of developing new products to add to their extensive list of products (business consulting, entrepreneur courses). This inspired me to take what I learned from this experience and share my knowledge with the many entrepreneurs who read my site.
The decision to develop new products for a business should really be approached systematically because there are so many ways that new product development can go wrong.
Whether it’s a bad marketing decision that damages the brand, or something as simple as poor product design. The decision and process to develop a new product line should be approached carefully.
Since this process can be extensive I thought it would be best to split this post into 2 Parts.
Part 1 which will cover the crucial steps entrepreneurs should take when developing their new products. Part 2 will cover how to market new products.
So what are the steps to successfully create a new product for your business?
Step 1: Brainstorming for Ideas
The brainstorming process is really important for the creation of new products because it’s the step that really decides whether a product will be a success or not. I tend to think of this step as the ‘research process’ since brainstorming new products ideas can easily be inspired by taking a look at the latest market research results.
Perhaps a recent survey (market research tool) that your company gave to past customers gave you a bit of insight into what new products you should develop.
For example, your startup provides tech services and you recently found that customers wrote on the survey that they would like to better their social media skills.
From this, you have an idea that perhaps your tech startup could start offering online courses in social media. Or social media-type consultancy services.
Step 2: Screening Ideas
This stage is crucial in weeding out product ideas that are unattainable. It’s important that during this stage you evaluate if this product will actually be profit-yielding for your business or not.
Having a realistic practical mindset is crucial since we all need to be brought down to earth from time to time.
It’s important that during this stage everyone involved feels comfortable enough to voice their concerns if a product is a dud. In the long run this can save your business time and money.
Step 3: Developing Your Concept
Develop a concept for your product and have the idea for your product written down. Don’t feel as if your need an in-depth business plan. There is always time down the line to retool your ideas.
This step happens right after the screening process because it’s important to take ideas which you decided upon during the screening process and test these ideas out with your target market.
A great way to do this is to utilize social media and actively engage with customers to see if the concept your team developed is really one that will they will buy.
Step 4: Developing Your Product
I always think of this stage as the customer service stage because it’s the time when you begin to work out the kinks of your product based on feedback. It’s easy to believe that this stage should be saved until after the product/service has launched and feedback is received.
But, it’s important to begin this stage earlier in the process so that you can head off any potential costs/expenses that you might incur while developing your product.
Step 5: Marketing Strategy
I think that this step should be done in succession with Step 4 Developing Your Product because both steps are crucial for seeing how the new product tests with the target market.
For example, say that you are a beauty brand that is developing a new line of foundation. You could wait until the product is finished and the reviews are in to make changes to your foundation line.
However, it’s better to be proactive about your product to make sure your target market is satisfied with your product.
A way that you could do this is to develop samples of your foundation for a group of people. Test samples of about 10 people who represent your target market.
Record the kind of feedback you receive. Maybe your test sample thinks your foundation is too cakey and dry? Maybe that prefer full coverage concealers?
A great way to receive the full benefit of test marketing in this crucial step is to test your product in several regions to see how well it does.
Part 2 of this blog series will discuss how to market your new product.
Step 6: Commercialization
I always think of this step as the Public Relations component of developing a new product. This is the stage where your business team will decide:
When the product launch will happen?
How the product launch will happen?
Where the product launch will take place? Online? Trade show?
Which markets will you target? Regional? National?
Step 7: Analyze Results
The last step of the process in developing new products is so important for seeing what worked and what did not work for your new product & service.
Hopefully during the initial testing phase of your new development process you headed off a lot of this retooling process. However, no product is perfect.
It’s important to constantly develop and re-develop your product so that it continues to have value in the lives of your target market.
Changes happen and occur. The lives of your target market changes as well.
Perhaps where you had success with a product in the past, you no longer are having the same success now.
Market research techniques (surveys, questionnaires, product reviews) are great tools you can use to see how you can better improve your product.
Next Week, check out Part 2 of this Blog Series: How to Market New Products.
Cover Photo: UChicago