by Product development strategy is the process of bringing a new innovation to consumers from concept to testing through distribution. When existing business revenue platforms have plateaued, it is time to look at new growth strategies. New product development strategies look at improving existing products to invigorate an existing market or create new products that the market seeks.
The steps involved in product development are similar in each type of strategy.
- Improve Existing Products
Improving existing products is an efficient method for product development. It is not as expensive as creating a new product because a lot of the time and resources were already devoted to creating the original product. Businesses then take feedback from consumers and find ways to improve upon products. .
The technology industry is well known for this. Think about the latest version of your smartphone or desktop operating system; the foundation was created in a previous version. Sometimes there are 10 previous versions, each building on the one before.
- Across all Industries
However, improving existing products is not limited to any one industry. Exercise equipment rolls out new models. Even pen manufactures find ways to improve ink flow and reduce smudging, making the product better. The goal of improving a product is to take an already successful product that consumers love and use, and then improve the product to maintain, or increase, the competitive advantage.
- Create New Products
Innovative new products are risky because you don’t know how consumers will respond to something new. This is why developing the product properly is imperative. New products enter into the market all the time. Large corporations are constantly developing new products.
The evolution of home deodorizers started with candles and air fresheners to plug-in wall diffusers. Each was a new product intended to improve upon older, less effective methods.
- Bringing New Products to Market
Crowdfunding, infomercials and television shows such as Shark Tank encourage inventors to bring innovations to market. One such product was a bee box with a spigot that enabled honey to be collected more easily. New products require that the maker identify a need and then develop a solution to make life easier, safer or more enjoyable.
- The Steps in Product Development
Whether you’re improving an existing product or innovating a completely new product, follow a process to ensure you are creating a product that consumers will buy and use. Identify the need. If this is an existing product that needs improvement, there may have been an oft-reported problem with the product. Creating a new product often results from hearing common complaints about a similar issue.
For example, tablets were created because people enjoyed the convenience of smartphones but wanted a larger yet portable platform to work on.
- Develop Prototypes Based on Research
Survey the market and develop a prototype based on the collected data. Find out what people like and don’t like about an existing product. Determine if any patterns exist for consumers that are showing a trending problem.
For example, vacuums have become more nimble with articulating joints, because consumers reported that they did not like heavy vacuums that were difficult to maneuver. Once prototypes exist, develop a financial plan for scaling production and establishing the target market with reasonable sales estimates.
- Test the Market and Adjust
Test the product in the market with smaller runs. Keenly observe sales and actively seek feedback from real consumers on the real product. Adjustments might be required before going into mass production and commercialization.
Developing a product strategy is the toughest and the most difficult job that has to done by the marketer. Creating an efficient marketing strategy for a new or even existing product is done by every marketer and consists of different steps which are as follows:
- Establishing the objective that the product should acquire
- Selecting the strategic alternatives for the achievement of the objective
- Selecting the customers who should be targeted
- Identifying the competitor target
- Deciding on the core strategy for the product
- Description of the marketing mix i.e product, price, place ,promotion
- Deciding for the supporting functional programs
Establishing the objective: For deciding the objective of the product , it should be taken care that it should have the following characteristics:
- They can be quantified based on the performance.
- The should be more of challenging and practical.
- They should focus more on increasing the revenue for the firm in terms of share of market
- They should increase the profitability of the firm
Positioning strategy for the firm: In order to develop the product strategy the firm also needs to focus on the positioning strategy. Some factors that affect the positioning of the firm are:
- The product
- Firm behind it
- Competitors
- Customers
Positioning: Choice of customer targets
The choice of selecting customers for effective positioning is based on some important considerations:
- Size of the segment selected
- Resources available
- Various opportunities for obtaining the competitive advantage
Positioning: Core Strategy
The core strategy defines the unique or distinctive advantage that has to be delivered to target customers in terms of price of the product and the values or offerings from the product.
Positioning Methods
The type of the product has a major impact on the positioning techniques. Different types of product are positioned in different way. According to this products are classified into different types:
- Daily use product
- Impulse product
- Speciality items
- Industrial products
The technique in which the product needs to be positioned is also classified on the basis of following considerations:
- On the basis of benefits delivered
- On the type of usage
- For a particular user category
- On the basis of the price
- On the basis of the quality
- On the basis of product specification
- On the basis of lifestyle of the user
- On the basis of reference groups
