We are all familiar with the adage “There’s nothing new under the sun”. The gaps between new and existing products seem to be steadily shrinking. Companies can no longer sit on old product lines and expect to reap revenue from them for years. In this age of cheaper and convincing dupes, businesses must constantly innovate and differentiate their products. Enter, the product development strategy.
Product Development Strategy Definition
A product development strategy is a part of the overarching corporate strategy by which a company offers new products, product improvements, and product line extensions to existing markets. This is in order to disrupt the competition, to retain market share, and to meet sales growth and revenue goals. This strategy establishes the goals and funding framework of the new products.
Product development strategies can follow a variety of approaches.
● The platform-based approach relies on brand loyalty to shore up the family of products and to get the customer interested in new products. Apple employs this.
● The customer-oriented approach works backward, starting from the customers’ wants to decide the product. A good example of this is Amazon.
● The market-oriented approach seeks to keep pace with or lead market advances. Google is focused on this market innovation, leading the charge.
Product Development Life Cycle Stages
The product development life cycle is part of the overall product life cycle. The former focuses on the development and assessment of the product while the latter is about the performance of the product in the market.
The product development life cycle stages is broken down into 7 stages.
This stage consists of market research and competitive analysis. The aim is to discover the target market, the viability of the product, potential market share, the competitors, the cost of production, and price points. This step will yield a product roadmap and strategic plan.
In this stage, the product is broken down into features and the first release is created with only the essential features. This is a minimum viable product (MVP) that will allow you to assess the market response while spending the minimum resources possible.
The early feedback on the product is tested against premises made in the planning stage. Suggested changes can be implemented at this stage. The success of the product is assessed using key metrics such as cost of acquisition, revenue, and rate of revenue growth.
Launch events, advertisements, and press releases let the target market know that the new product is live. This stage is the same as the introduction stage in a product life cycle.
Analysis of sales and marketing data is key at this stage. It is important to carry out A/B testing to improve ROI as well as assessing the effectiveness of marketing campaigns and the efficiency of customer relationship management.
Iterate or Kill
At this point, all the data and analyses should inform decisions on which features are of value and should be iterated or upgraded and which features need to be scrapped. The product development life cycle begins again ensuring a circle of continuous innovation.
What Is Product Life-cycle Management
What is product life-cycle management? It is the series of strategies that a business implements throughout the life cycle of a product in order to optimize lead times, improve product quality, reduce costs, identify sales potential, and mitigate the environmental impact at the end.
In conclusion, when it comes to product development strategy, constant innovation, augmentation, and new applications need to be carried out away from the company’s core offering. In order to make the product development process profitable and accountable tie it to the overall company vision and strategy as well as budget.