Product development strategy – one of growth strategies associated with the Ansoff Matrix refers to the methods and actions used to bring new products to a market or modify existing products to create new business. Developing a product has several steps, from producing an idea of distributing products to customers. Each stage requires a strategy to be successful and generate revenue for a business.
Product development strategy is important because it uses market research to develop a plan for success in selling products. Your overall strategy should include the methods and techniques you will use during each stage of product development. This can help you overcome obstacles and focus on the most successful strategies. Making plans for how to develop various products can also enable you to adjust existing products and grow your business.
What are the stages of product development?
Product development includes all aspects of producing innovation, from thinking of a concept to delivering the product to customers. When modifying an existing product to create new interest, these stages verify the potential success of the modifications at generating business. The seven stages of product development are:
- Idea development: Idea development involves brainstorming for new products and ways to make existing products more relevant.
- Editing and selection: During the selection process, the product development team determines which ideas have the most potential to do well in the market.
- Prototype creation: Once an idea has been selected, the company must create a prototype or draft version of its proposed product. This prototype can be used to determine if the product functions as intended and appeals to your target audience.
- Analysis: At the analysis stage of product development, the company studies market research and evaluates the possible problems with the product.
- Product creation: After incorporating notes from the analysis into the prototype, the finished product can be created.
- Market testing: Before releasing the product to a wider audience, products are often released to a smaller market or focus group. The market testing phase includes evaluating customer feedback and the effectiveness of the product’s marketing.
- Commercialization: The final stage of product development occurs when adjustments are made based on market testing and the product is released to the full market.
Benefits of product development strategy
Having a strong product development strategy can support your business’ ability to turn an idea into a profitable product and then modify it to remain competitive within the market. Your product development strategy can reveal areas for improvement as well as which methods are most successful. To receive the most benefits from your product development strategy, consider how various techniques would work for each step and make adjustments based on your past experiences.
Product development strategies
Some companies may focus on adapting their current products while others may mostly create innovations, but both types of product development require a clear strategy to implement. Here are some useful product development strategies for introducing a product and remaining competitive within your market:
- Change ideas
- Modify an existing product
- Increase product value
- Offer a trial
- Specialize and customize
- Create package deals
- Create new products
- Find new markets
Modify an existing product
Creating a new version of an existing product with slight changes can provide your market with the motivation to purchase an upgrade. Modifying one of your existing products and focusing on the updates in your marketing influences customers to try the newer version of the product. This strategy focuses on determining which features consumers would like to see improved and making those changes.
Increase product value
Many companies engage customers by including additional value with the purchase of a product. You can increase value by including a larger quantity of products, adding customer support or offering premium features. New customers may be drawn to your product because of the added benefits, while existing customers may purchase your products again to receive a better deal.
Offer a trial
Offering a free or less expensive sample version of your product can convince customers to try your product who might not have otherwise purchased the full version. This method relies on the quality of the product by assuming that many of the customers who experience the free trial will purchase the full version. Offering a trial can show customers how they can benefit from the rest of your products.
Specialize and customize
Many products can be specialized to target a specific customer group or customized to create a unique and personal gift. Allowing customers to personalize your product to fit their needs and lifestyle can encourage them to choose that product over a competitor who only offers a generic version.
Create package deals
You can encourage customers to purchase more of your product by creating package deals. This strategy exposes customers to a variety of your products through sample packs or assortments that could solve different problems for the customer. Package deals can also introduce customers to a product they may not have otherwise purchased and encourage them to buy it in the future.
Create new products
Another way to develop a product line is to create a new product that relates to your market. When creating new products, be mindful of what customers are looking for without discouraging them from buying your other products. Any new products should supplement what your existing product does for the customer instead of replacing the original, encouraging customers to buy multiple products from your business.
One strategy for developing a product can be to change your product idea. If a market is not responding to innovation, the company may consider devoting their resources to researching what that market wants. Not all ideas will result in a successful product, so a willingness to change ideas when needed can be an effective strategy.
Find new markets
Many products can be successfully sold in multiple markets. One product development strategy is to consider marketing an existing product to a different market or demographic. This could include targeting businesses instead of individual consumers, marketing toward a different age group or expanding your product geographically.