Understanding Product Development Strategies and Stages

Understanding Product Development Strategies and Stages

Nikereact.orgUnderstanding Product Development Strategies and Stages – Almost all businesses, be they small or large, are always concerned with the production, development, manufacturing, and sales of products. When the product has been produced, the management will work on a strategy on how to do product development.

In this article, the author will discuss what product development is and how to design a strategy and also the stages. Read this article to the end.

Definition of Product Development

Understanding Product Development Strategies and Stages

Product development is a process and strategy that needs to be carried out by a company in developing a product. The thing that needs to be done in developing a product is to improve the old product or add the usefulness of the product to the target market. This means, you need to present new elements that can captivate customers.

In addition, product development is included in the process of changes made to pre-existing products. At the same time as a process of seeking innovation to add value to the old product and convert it into the form of the product. By doing product development, it means that the company already understands and knows the needs and wants of the market.

The following is the definition of product development according to several book sources:

1. According to Tjiptono (2008), he revealed thatProduct development is a strategy for new products, such as enhanced products, original products, modified products, and also new brands developed through research and development.

2. According to Armstrong and Kotler (2008), product development is a strategy to grow the company by offering modified products or new products to a predetermined target market. The product development is carried out on physical products and ensures that existing product ideas can be transformed into a new product that is more effective.

3. According to Simamora (2000), product development is a process of finding ideas or ideas for new products and converting them into product lines that have been successful in the market. The search for new products is based on the assumption that the target market wants new elements. Therefore, the introduction of new products can help in achieving the company’s goals.

4. According to Alma (2002), product development is an activity carried out by producers in developing their products, improving old products, adding to the usefulness of old products, and reducing production costs and packaging costs.

Product Development Goals

The purpose of product development is to provide maximum value for consumers. Not only that, it also aims to win the company’s competition by choosing innovative products. Then also products that have been modified and have a high value, be it in terms of design, packaging, size, and others.

Meanwhile, according to Keller and Kotler (2008), there are two general objectives of product development, namely:

1. To meet new needs and strengthen the company’s image as an investor. This goal is achieved by offering a new product compared to the previous product.

2. The second objective is to maintain competitiveness with existing products. This is done by offering products that can provide different types of satisfaction or new uses.

According to Alma (2002), there are several reasons that underlie a company in product development, including:

1. To meet the needs and desires of consumers
2. Increase turnover or increase sales
3. To utilize production resources
4. Win the competition with existing products
5. Increase profit by using the same ingredients
6. Utilizing the remaining materials
7. Prevent consumers from feeling bored
8. To simplify product packaging

Product Development Strategy

Each company engaged in a different field will follow its own product development strategy. Some members will innovate, while others will focus on adapting in current product development.

Whatever strategy is used, it must be done clearly. When releasing a new product on the market, there are several product development strategies that you should do, including:

1. Improve Existing Products

This strategy is done by making new products from existing products. Then modified and adapted to the wishes of the market. In addition, you also need to motivate the target market to buy the product that you have upgraded.

It focuses on adding features and updates that will later affect consumer interest. However, there is an important thing to note, namely that you must continue to look for features that consumers need from updated products.

2. Increase Product Value

Usually, the reason customers buy a product is because of the value they will receive from the product. That way, companies need to strengthen product value again by offering premium features, improving product quality, and also customer support. The added value presented will attract new consumers. Then existing customers will get something new from the product.

3. Experiment

Offering free samples or product samples will make customers want to buy your product. Here, customers will certainly check the quality of the product and the free sample will make them more confident to buy the premium version of the product. This free offer shows customers what they will get if they buy the product.

4. Specialize and Customize

You can customize some products and make them more special to target certain customer groups. In fact, you can also offer personalized products that are relevant to the needs and desires of customers. This will make them interested in buying the products you offer compared to competitors.

5. Package Offers

Offering a new package will certainly attract the attention of customers. You can offer products in various packages. Such as bundle packages, discounts, or free samples to choose the products you offer. The package here is an offer that other customers will not get. Especially if you’re offering a limited time offer, it’s a good marketing strategy.

6. New Product Line

A new product line is the development of a new product within a product line that is still relevant to an existing product line. When you want to create a new product, then you have to be careful with the development. Don’t let it be, you only focus on offering products that are needed by customers. New products must be complemented by new features. So it will increase sales of these products.

7. Changing Ideas or Ideas

This strategy is done by changing the definition and product idea. For example, when you create a new product but the target market does not respond to the offer. Then you need to do market research and find out the appropriate customer wants and needs. Companies also need to provide new ideas for products that will be developed and adapted to customer needs.

8. New Target Market

Selling several types of products in different markets is one of the strategies in product development. Where you can sell products in different markets. In fact, you can also change your target market and demographics and shift your focus from customers to business.

Types of Product Development

Every company must have a strategy in product development. It is intended that the products being developed can be in accordance with the wishes and needs of consumers and the company itself. But still in an attractive offer, so that existing consumers still want to have the product.

According to Keller and Kotler (2008), there are several types of product development strategies, including:

1. Improve existing products. This means that companies must use existing facilities and technology to create new innovations and improve old products. By using this method, the company will not get a big risk. Because, they just need to make a complete change.

2. Expanding the product line by adding items to the existing product line. You can also add in new products.

3. Adding an existing product.In this case, the company needs to add and provide variations to existing products. Then expand the market segment by serving various types of consumers who have different tastes.

4. Imitating or modifying competitors’ strategies.This method can be done by imitating the strategies of competitors that are considered to be profitable. For example, regarding pricing.

5. Adding product lines. Usually, the company will.requires substantial funds in the process of making new products that are not related to existing products. This is because products that have never been made and the facilities needed to manufacture them require a large amount of funds.

Product Development Stages or Processes

1. Creating Ideas or Ideas

Creating an idea from a new product is the first step that needs to be done in the product development process. In the process, the company needs to follow several systematic efforts in creating new products.
Usually, there are many ideas or ideas related to a new product in the process of creating the idea. However, all these ideas must be able to proceed to the next stage. So that in this process, there will be a lot of wasted ideas after passing various eligibility requirements for a product.

2. Screening Ideas or Ideas

The next stage is filtering ideas. After carrying out the creation stage, the company needs to filter related product ideas that have been created. The screening is done with the aim that companies can get quality ideas. So that later it can be processed to the next stage. It is also useful for reducing production costs, minimizing the risk of failure, and also for selecting product ideas that are considered feasible and can be produced by the company.

3. Concept Development and Testing

After getting a product idea from the screening above, the next step that must be done is to develop the idea and test the new product concept. The concept here is a result of efforts to develop several ideas that have been selected. Where the product concept must be able to meet consumer needs. So that it can be better understood by the target market in a particular segment.

a. Concept Development

In carrying out concept development, companies must develop ideas that have been selected previously. Then make it a product concept so that it can be processed further. Therefore, in product development it is necessary to create several other alternatives that can be adapted to market needs and are also considered attractive.

b. Concept Test

The new concept that has been developed must be tested first with the intended target market. Be it on a small or large scale. The concept can be presented in various forms. For certain types of products can be presented using pictures or word descriptions. In essence, the message to be conveyed to consumers must be easily accepted by the target market.

Then after the concept can be explained in detail to consumers. Then ask them a question related to the interest and value embodied in each product concept.

4. Marketing Strategy Development

When it is decided to choose a new product, then the next step is to develop and develop a marketing strategy. The strategy must be developed and started from scratch. Starting from the release of the product to the market until the product can be accepted by consumers.

5. Business Analysis

The product development stage that you have to do if you have decided on a product concept and marketing strategy is to evaluate the business attractiveness of a previously determined new product.

At this stage, it is only necessary to re-examine the sales projections, costs and profits derived from the sale of the new product, the goal is to find out whether all business factors are able to meet the company’s main objectives or not.

If the final result of a business analysis shows a positive value and is in accordance with the company’s main objectives, the product can be moved to the next stage, namely the product development stage. These sales can be obtained by reviewing a history of other products from the company, it would be even better if the product is still in the same category as the product.

In addition, it can also monitor similar or similar products on the market, by monitoring these developments, as well as what things should be done and also avoided in order to achieve this.

Then, connect it with a variety of correct and appropriate marketing strategies, good sales distribution, as well as what promotions and communications will be conveyed.

In a sales projection, the company must make a maximum and minimum sales figure to be able to know all the risks that will occur and be passed. Besides all that, it can also be useful in order to know how much the estimated cost and what level of profit will be achieved from selling the product.

From all the results of the analysis, the company will be able to find out from the financial side and can also assess how attractive the business in the product is.

6. Product Development

In this stage, the product developed is not a real or actual product, but is still in the concept of a series of words, videos, pictures, animations, or a prototype of a product.

If you have passed the business analysis, it will be continued by developing into actual or real products. So, later consumers will evaluate the product by itself. Because the input and experience of consumers is very useful for the product development process itself.

7. Test Marketing

Before the product is marketed according to its marketing strategy, the product must pass a marketing test on a real market on a small scale.
With this strategy, the producing company will get an overview and experience related to the product to be launched, before the product is actually sold on a large scale where it requires a lot of marketing costs.

8. Commercialization

The results of the marketing test should be able to provide exposure related to the prospects for the product.

From the results of the marketing test, then the company can then make a decision whether the new product can be launched, postponed, etc. If the company is sure that it will launch the product, then the company is obliged to prepare several activities, namely commercialization, which starts from production preparation, preparation of new product launching activities such as promotion, advertising, distribution, and various other marketing activities.

Not a few products fail to enter a successful and wide market, therefore, to overcome this case, make sure all the steps above have been carried out.

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