Product Development: The 8-Step Process
August 30, 2022
Product development sounds fun in concept, but it’s an enormous amount of hard work that includes product conception, design, strategy, and logistics.
Anyone can think of a great idea, but without the right process in place, that idea could slip between your fingertips and never make it to fruition.
In order to bring the most successful products to market in the most efficient way, you want to have a clear product development process mapped out before you even start.
While different brands may use different processes, let’s take a look at the eight-step product development process we recommend.
1. Brainstorming & Idea Generation
You can’t have a great product without a great product idea!
The first part of any new product development process is idea generation. This is true whether you want to launch an entirely new brand, an add-on product like a headrest for a chair that you already sell, or a new feature for a SaaS tool you’ve created.
If you have a product idea already that you want to run with, great! This is the stage where you can start to flesh out more details, like what it may look like, what you want it to do or how you want it to function, and other core features you want it to have.
If you don’t yet have a product idea but know you want to expand your business (or start one!), brainstorming is the way to go. Think about what interests you, what industry you have knowledge in, or what problems you want to solve in your own life. These are typically good places to start.
As you’re brainstorming, take the “no idea is a bad idea approach,” especially if you’re working with a team, because shutting down pitches could hinder creativity or keep others from sharing. You also don’t want to brush off a great idea due to an obstacle that would actually be fairly easy to overcome if you thought about it more.
After you come up with a list of ideas during brainstorming, you’ll want to take some time to whittle them down to those that you’re most interested in, that you think are most possible, or that you think would perform best in the market.
2. Conducting Market Research
Market research is a vital part of the product development process, so you’ll want to dedicate a solid chunk of time here.
Good research can prevent you from going down a very expensive rabbit hole that leads to nowhere.
You may realize, for example, that there’s already a large number of products similar to yours on the market and you’ll need to find either another way to stand out or another product. Your team could also find that there’s a lot of demand for the type of product you want to create.
Market research will involve the following:
- Assessing what direct or indirect competitor products are already on the market
- How much customer demand there is from potential buyers in your niche
- General current consumer behavior (during recessions, for example, spending on items like fashion jewelry may drop but spending on groceries won’t)
- Projected growth and competition levels in the industry you’re breaking into
Keep in mind that just because you’ve got a solid list of competitors or the market may be tough doesn’t mean that you shouldn’t move forward. It does mean, however, that you’ll want to account for these factors throughout the product development process, finding ways to counteract any challenges so you can overcome them.
3. Create Your Roadmap
You’ve got the product idea. You’ve got the market research.
Now it’s time to look at the logistics.
What do you need to do in order to create this product?
You may need to:
- Create a prototype
- Find manufacturers and suppliers
- Develop product packaging
- Come up with a marketing plan, including creating a website
- Apply for necessary permits or licenses, depending on the industry you’re in and what locations your business is operating from
- Start a business
- Generate pricing
- Secure funding or financing, whether it’s through personal accounts, your existing business’s funds, investors, or business financing options
Who will you need to work with? What needs to happen and who do you need to connect with to make this happen?
Again, make a list. Research can help with this if you’re feeling lost about what you’ll need or where to start, especially since it’s different for every industry. Someone who wants to sell organic crackers using their grandmother’s recipe is going to have a different process than a brand that wants to launch a new type of lawnmower.
4. Create a Prototype
When you’re creating a product, it makes sense that you need a prototype.
You want to create a finished product that you can put your hands on. This will help you make sure that the product is how you envisioned it (and with both the function and quality that you want), and to have a finished product that you can use as a sample when you’re ready for true mass production.
Keep in mind that it typically takes multiple tries to get a prototype that you’re happy with; most of the time, it does require testing a few different options, and making improvements and changes until you’re happy with the end result.
Start with drawings and a list of the materials that you want to use for production. Then start testing different versions, slowly working your way up to the end result.
Some products you can prototype yourself, like that homemade cracker recipe. Others, like the new lawnmower, are going to be much more expensive and time-consuming to create, so you may need to spend more time consulting other experts, looking for issues, and narrowing down options before you create true prototypes.
As a note, if you aren’t able to draw the product well yourself, consider working with a designer who can offer a sketch. Make sure that they’ll sign a non-disclosure agreement (NDA) and a non-compete that prohibits them from launching their own competing product.
5. Build Your Supply Chain & Find Your Partners
When you’ve got a prototype in hand (or even when you’re in the final stages), it’s time to start finalizing what your supply chain will look like.
A standard supply chain for someone making vegan purses might include:
- Suppliers of raw products, including vegan leather, zippers, felt for the interior of the purses, and the gold-colored purse hardware
- Manufacturers that will help stitch the purses together
- A packaging company that will offer customized-to-your-brand packing solutions, including a dust bag, a printed brochure about your brand, and a customized shipping box with your branding on it
- A warehouse that will store and ship your products for you
The more complicated the products, the more complicated the supply chain may be. Watch designers are still in the fashion industry, for example, but there are a lot more moving parts— literally. They may need to source different types of gears, different types of crystal watch faces, and unique elements to make the watches visually stunning.
It’s crucial to understand who you’ll need to work with and remember to shop around because your variable costs will absolutely impact your break-even point. The lower you can keep your costs without sacrificing the quality or reliability of your supply chain, the more profit you make.
6. Set Your Product’s USP
At this point, you’re going to have a good idea of the product that you’re creating and the brand that you want to build around it.
Now it’s time to fine-tune your unique selling proposition.
Your unique selling proposition is the reason why your target audience is going to purchase from you. It’s what makes you different from the other competitors on the market, and it’s the answer to the always prevalent “what’s in it for me” question that customers have.
Your USP is all about the unique value that you offer.
Here are a few examples:
- Hermes bags have a USP of high quality, status, and exclusivity; only a very small portion of the population could even consider (let alone justify) owning a 14k handbag
- Aldi grocery stores focus on an affordability USP, promising that they can offer good prices while still delivering good quality
- Grove Collaborative promotes an ethical and sustainability-focused USP, offering a line of plastic free products and assuring customers that all of their cleaning products are safe for your family and the environment.
Your USP should be influenced by the value you want to offer customers, but also what you believe customers are looking for. I found Grove because I was actively looking for high-quality, safe plastic-free products; that’s a powerful USP because it brought me to them when there are dozens of competitors I could purchase from on my next visit to the grocery store.
This is where some of that market research comes into play. Do additional research and see how you think your USP will fit into the existing market landscape, and then start weaving it into your core brand.
7. Determine Your Pricing
After you come up with your USP, you can finally get into pricing.
Developing a pricing strategy can feel overwhelming because there are a lot of factors to take into consideration. These include the following:
- Your fixed and variable costs, both now and what you project for the future
- What your competitors are charging
- What value offer you’re focusing on, and what your USP is
It’s a fine balance to strike. You absolutely must be profitable, and you need to account for things like broken returns, lost shipments, and damaged items in the warehouse.
You need to price competitively, but this doesn’t mean “be the lowest cost option.” If you’re going for an affordability USP, then yes, you’ll want to come in at a low price tag, but there are clearly plenty of brands out there that are extremely comfortable and successful when it comes to charging more than their competitors.
Many people, for example, are willing to spend more on high-quality items that will hold up well over time, including items like kitchen knives or even clothing.
Some will shell out more for products that give them better functionality or additional features, like the latest iPhone or an upgraded oven.
Plenty will spend more with brands that align with the USPs they’re looking for. Millennials and Gen Z shoppers, for example, consistently look for (and spend more with) sustainable brands. It’s why I spend more on plastic-free cleaning products.
Remember that you can test out different prices and see what works and that you can always increase or decrease pricing as the market changes if needed.
8. Marketing & Go-to-Market Strategies
You’ve strategized, researched, and created.
Now is the time to get started putting the rest of the plan into action.
As your products are mass-produced (even if it’s just on a small scale), you can launch your go-to-market and marketing strategies.
At this point, you’ll need to do the following:
- Develop a comprehensive go-to-market strategy that will help you get your product in front of customers and, potentially, influencers
- Consider partnering up with different retailers to help sell your product at a wider volume
- Determine how you’ll sell your products, and put the appropriate pieces in place (whether that’s creating an eCommerce-friendly site, signing up for conferences to show off your product, or creating an Etsy shop)
- Determine what your strategies will be on different marketing platforms, including email, social media, pay-per-click ads, influencer marketing, and more
The marketing aspect of product launches can be difficult, especially since many brands need to start from scratch and test as they go. If you need help with any part of marketing— including PPC ads, landing page development, and email creation— we can help. Learn more about how we work here.
Product development can feel just as overwhelming as it can be exciting, and having the right process in place can help you keep the logistics in order at every stage.
The best advice we have is to research well and outsource wherever you need to.
Need help copyrighting a product? Consider reaching out to a copyright attorney.
Need help creating the product? Reach out to manufacturing companies that have the specialized skillset you need.
There are so many professionals available at every step along the way. There are plenty of freelancers that can help create CAD designs of prototypes, and we can help with all of your marketing needs.
Find the right teams to help you so you can successfully focus on making your product the best it can be.
Ready to bring your new product to the market? We can help! Get in touch with us to learn more about how we can help you.