Product development strategy is something a new startup might need to build and launch a successful product in the market. You face many challenges when you launch a new product in the market. Whether your product satisfies the needs of a specific group of people or not? Are people willing to pay for your product?
A Product development strategy is an important method which must be adopted to plan and develop the process that ensures a better product in the market. It can include market research, change features based on customers needs, product tests, and more. In this blog, we will learn about the product development strategy and how we can create one of the most effective product development strategies.
What is a Product Development Strategy?
Product Development Strategy is a well defined planning which guides organisations on how to build and launch new products or make updates in existing ones. It includes everything from the beginning i,e.. Planning, design research, development, testing, and launch of the product. Product development strategy also guides future releases of products. KPIs, feedback loops and other factors to achieve a more successful product.
An effective product development strategy acts as a guiding light for the organisation through each phase of the product development lifecycle. It also ensures that the product delivers the solution its users needs, aligns with the company’s objectives, and provides a clear goal for future growth.
Product Development Strategy: Key Takeaways
- Product development strategy covers everything in the product development lifecycle to ensure a successful launch.
- Make sure you understand your customers and their needs along with a well defined product vision aligned with the user market and business goals.
- Find unique selling points of your product that includes usability, quality, cost, customizability, features, niche focus, and more.
- Collaborate with stakeholders and cross team in organisations to develop an effective solution by the end of the cycle.
What are the Benefits of Product Development Strategy?
There are countless benefits when you implement the right product development strategy. Check some of the major points below.
1. Better Chance of Success
When you place the right product with an effective product development strategy then there are higher chances that your product might receive an overwhelming response from your target audience who might be willing to purchase your product and become a valuable customer for a longer run.
2. Competitive advantages
With a well planned product development plan you can stay ahead of your competitors by offering better and innovative solutions when compared with your competitor. Making frequent improvements in the product can help you gain new customers including retention of existing ones due to continuous improvement.
3. Increased Customer Satisfaction
When product development planning is aligned to customer needs and preferences chances of positive results become higher. Especially it leads to greater customer satisfaction and trust with more and more people adding to the family.
A satisfied customer can be an asset to your organisation as they can promote your product without any charges frequently through mouth advertisement, they can be your repeated buyers, and more. With effective solutions for the users organisations can build emotional connection with users easily.
4. Growth in Revenue
With better planning and keeping all important metrics in consideration you can create many opportunities in the market with a significant growth in sales volumes, and opportunities to expand and enter new markets. With revenue growth you can expand and remove your dependency on a single product line which will ensure long term sustainability and profitability.
5. Effective Resource Utilization
With effective and proper planning you can eliminate wastage of money, resources, time on the product and process allocated during the development cycle.
Stages of the Product Development Strategy
The product development strategy includes various stages starting from planning to launch of the product. Let us check some of the most important stages in the development.
1. Idea Generation
In the first stage you develop an idea for the type of product you want to build to solve problems for a specific group of people. You can take inspiration from these ideas from market research, market trends, competitors, or based on emerging technologies. The main goal is to provide effective solutions for a group of people and solve their problems.
You can conduct SWOT analysis, take customer feedback, brainstorming sessions, surveys and more in determining your plan and locking it for development. The more diverse you keep your input the better are the chances for an innovative product idea.
2. Idea Screening
It is important to make sure that your idea is worth the cost and time you will put in development. Not every idea is worth pursuing and must be validated based on various feasibility metrics. The screening options take care of factors like cost, feasibility, market potential, and alignment with the business goals.
Only the ideas which show real potential and can solve problems of a large section of people must be adopted.
3. Development and Testing
In this stage the concept of the idea takes the shape of a product where everything is included i,e. Target audience, benefits, features, pricing, positioning, market fit, and more. A concept of product positioning statement is created along the way.
With the help of feedback many things can be improved in the product concept before it comes into the development stage. It is important to understand customers’ needs, preferences and willingness to buy the product. This stage ensures that the product provides the right solution in the right way before you start going all in i,.e. Choose heavy investment on product development.
4. Business Analysis
In this stage product viability in the market is decided based on the financial perspective which includes profit possibility, cost incurred, Return on investment (ROI), break even points, sales forecasting, and more.
This stage is also important as it analyses and ensures that the product not only meets the audience requirement but also fulfils the business objectives. It helps decision makers in the organisation to decide whether or not the product is worth the development cost.
5. Product Development
This phase is purely dedicated to development after approval from the decision makers of the organisation. Prototypes are built and engineers, designers, and developers collaborate to start building the actual product. The product after development is tested for any design flaws, user experience, functionality, and more.
This may involve multiple iterations of the product based on real time feedback loops. It is important to address any issues in the early phase of the development and make sure that the product performs as it needs to be.
6. Market Testing
After the product is successfully developed it is then passed onto the testing stage where not only it undergoes functionality testing but also tested based on the market analysis to ensure feedbacks are positive and it solves people problems for which it is made.
When the product is kept in a small part of the market it can provide information on how the product is in the eyes of people, pricing, promotion strategies and demand. This helps make important changes in the strategy and last minute improvements if needed which also minimises any type of risks followed.
7. Commercialization Or Product Launch
At this stage the product is successfully launched in the market with total distribution, production and marketing strategies in place. In this process the product is available for purchase, promotions and any kind of feedback.
Customers start providing feedback for the product which can be used in the important improvements for the later stages of the product. A successful launch with an effective marketing strategy is important for a product growth and success.
How to Create a Winning Product Development Strategy?
A winning product strategy might require you to keep all important points in mind such as market research, user research, testing, and planned launching. Let us go through the overview of each step below.
1. Define the Problem
After deciding the complete problem, collect a complete description of the problem and think of the challenges you face. Complete an overview of all the pain points you have identified, narrow these points and select some of the most feasible and based on market needs.
You can distribute these points with your product team to add some additional points to arrive at a conclusion.
2. Brainstorm Potential Solutions
After careful consideration of the problem statement, its time for you to develop the most effective solution for your product. Connect with cross teams to conduct an open brainstorming session.
Share all your collective research with your team to reach a more productive solution considering every point important.
1. Conduct Market Research
The first step you have to consider in your product development strategy is to conduct an overall market research based on people you are targeting, general market and the competitive landscape in the market.
The point here is to understand whether your product can reach your defined metrics of success. You have to carefully consider all industry reports, articles or stats available in this matter. All this market research must be within the reach of all teams working on this product which facilitates easy access of data.
2. Leverage User Research
The market research about the product gives you a general idea of the product scope and chances of success. While the user research is more oriented to gathering first hand information, individual preferences or needs of the stakeholders.
You can conduct market research using various available tools in the market such as customer interviews, analytics, remote user tests, focus groups, and more.
3. Build a Prototype
You can coordinate with the design and development team to prepare a prototype of the product. A prototype is the first model or design of a product on the basis of which the entire product will be delivered. You can put real users to understand their level of interest in your product.
At this stage you will collect enough feedback with ideas to make improvements in your product based on what is required in the market. You can then forward this requirement to the designers or developers in the organisation.
3. Conduct Testing
After careful user and market research your next step is to understand how useful the product is for customers you are targeting. At this stage we also test products for errors or functionality deficiencies (if any).
You can make testing earlier with mockups or wireframes rather than waiting for a minimum viable product (MVP). Make sure you keep a habit of continuously testing and capturing feedback in every iteration of the product. You can take the help of product market fit to understand where your product stands.
4. Product Launch
The final phase of the product development is the launching stage. This is the exact position where you finally release your product with the latest ready features in the market.
Also Read:
- Product Vision: How To Define Yours In 4 Steps?
- What Is a Product Team? Functionality, Responsibilities
- Product Positioning: Tips, templates, and examples
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Product Development Strategy FAQs
Q1. What is product development strategy?
Ans: Product Development Strategy is a well defined planning which guides organisations on how to build and launch new products or make updates in existing ones. It includes everything from the beginning i,e.. Planning, design research, development, testing, and launch of the product.
Q2. Why is product development planning important?
Ans: An effective product development strategy acts as a guiding light for the organisation through each phase of the product development lifecycle. It also ensures that the product delivers the solution its users needs, aligns with the company’s objectives.
Q3. What are important stages in product development strategy?
Ans: Some of the important stages in product development strategy are idea generation, idea screening, development, testing, business analysis, product development, market testing, commercialization.
Q4. How to make a good product strategy?
Ans: You must take care of the following points such as intensive market research, product team focused, effective solution for your target customers, stay inclined to business objectives.
