Product Development Process: The 9 Stages (with Examples)

Updated Aug 11, 2022.
product-development-process

Without product development, product ideas will remain as ideas and never get launched into the market and reach the organization's target audience. 

Before a company’s market launch, the product development process must happen from the brainstorming session where ideas are generated till the finished product is successfully launched. 

Ensuring that an idea comes to life, becomes a widely accepted product in the market, and meets customer needs is the desire of every product manager. The product development process makes this achievable.

This article will discuss various aspects of the product development process and the factors that influence it.

Let's get started.

What is Product Development?

Product development refers to the strategic process of building a new product from start to finish. It is a vital aspect of product design. The product development process begins from the initial idea generation phase or brainstorming session till the product launch. 

The Process - Product Development
Source: LinkedIn

Furthermore, the product development process refers to all the activities and steps an organization takes to bring a product into the market successfully. It covers other aspects like introducing an old product to a new market and renewing an existing product.

Successful product development entails identifying a market need, building the product roadmap, conceptualizing the product, launching the product into the market, and collecting customer feedback.

Product Roadmap
Source: ProductPlan

Some of the best product roadmap software that helps you take a product from initial conception to development and launch include Monday.com, ClickUp, and Wrike.

New Product Development Process

The new product development process is a vital aspect of product design and does not end until the product life cycle is completed. 

In simple terms, the new product development process involves bringing an original product idea to market. You can use the best product management tools for visual product planning and effective product process management. 

9 Stages of Product Development

Different organizations use different product development techniques, but the product development process is broken down into nine stages.

1. Idea Generation (Ideation)

The first stage of the product development process is the ideation stage. Many entrepreneurs have issues moving beyond this sage; most get stuck here and either come up with unscalable ideas or no idea. 

Product development begins when a new product idea is generated or birthed. 

The ideation stage can also be called the product innovation stage, where you thoroughly brainstorm certain product concepts based on market research, concept testing, and customer needs.

The following factors should be considered when initiating a new product concept.

Target Market 

Your target market is your potential customers. A target market is essentially the customer profile built specifically for your product. 

Identifying your target market at the early stage is vital so that you can customize your product concepts in line with your target market from the start. 

Existing Products

Accessing your existing product portfolio is important when you have a new product concept. 

Some factors you must consider within your product portfolio include: 

  • Do your existing products provide solutions to similar problems?
  • Do your competitors offer a product that does not permit market share?

If the answer to these questions is positive, you must consider whether your new product concept is substantially different enough to be viable. Acquiring the right answers to these important questions will guarantee the success of your new concept. 

Product Portfolio Template
Source: Smartsheet

Functionality

You need to have a general idea of what functions your product will serve to the user and how it will benefit your customer. 

At the initial stage, it is not compulsory to have a well-crafted report of the product's functionality is not compulsory. Having a general picture of its core functionality will go a long way. 

You should consider why a potential customer will be interested in purchasing your product, what it looks like, and what esteem benefits it provides. 

SWOT Analysis

Building the best version of your new product concept is feasible when you have considered every important factor and analyzed your product’s strengths, weaknesses, opportunities, and threats early in the development process. 

A proper SWOT analysis will ensure your product solves the market gap and is distinct from competitors. 

SWOT Analysis - Internal and External
Source: ResearchGate

SCAMPER Method

With brainstorming techniques like SCAMPER, you can refine your product ideas properly. SCAMPER is an acronym for substituting, combining, adapting, modifying, putting to another use, eliminating, or rearranging your product concept.   

Documenting your generated ideas as a business case will further validate your product concept. With this SCAMPER strategy, your team members will clearly understand the original product features and the new product launch objectives.

SCAMPER strategy
Source: Consuunt

2. Preliminary Idea Validation Using Market Research (Idea Screening)

After successfully generating your product idea, you should research before going into production, as most entrepreneurs do. Failure to validate your idea may result in various issues and problems. 

Validating your idea (product validating) eliminates the constraints of producing a product that is not fit for the target customers. It prevents you from investing your precious time, money, effort, and resources on an idea that will not sell.

Producing a product your target audience will not be willing to pay for is counterproductive to the business goal of making a profit. 

Here are some idea screening techniques to validate your product ideas.

  • You can get useful and early feedback on your idea by sending an online survey using online survey software tools.
  • You can start a crowdfunding campaign.
  • Sharing your idea with friends and family is also a good way to validate your idea.
  • You can ask for feedback on forums like Reddit, where you will get detailed insight into your idea's viability.
  • With Google Trends, you can thoroughly research market demand and compare the information with your idea.
  • You can get early user feedback and gauge the interest of potential customers via email opt-ins or pre-orders.
  • Ask the opinions of people with strong industry knowledge in your target niche. 

In validating your idea, you must be conscious that you require feedback from an unbiased and substantial audience concerning why they will buy your product or not.

You can implement an effective marketing strategy by running a technical feasibility study or carefully accessing the idea to know if it will generate a good return on investment (ROI) or not.

Product validation guarantees that you create a product people will be willing to purchase. A major aspect of validation research is competitive analysis. If your idea can take up a market share, inevitably, competitors are already operating in that space. 

You can acquire relevant information to validate your product by visiting competitors’ websites and signing up for their email lists. These actions will give you clear insight into how your competitors attract customers and make sales. 

Another step you can take is to gather information from your potential customers about their opinion of your competitors’ products. This information will be of great help when you want to define your competitive advantage. 

All the information gathered from the market research you conducted and product validation will help you effectively project and gauge the demand for the product. You will get insight into the competitive landscape before you proceed to the planning phase. 

3. Product Definition

Product definition means concept development or scoping, and the main focus is to refine the product strategy successfully. 

Here are some specifics that you must define in this stage.

Business Analysis

The business analysis includes e-commerce strategy, effectively mapping your distribution strategy and more in-depth competitor analysis. Effective business analysis enables you to start building a clearly defined product roadmap.

The Role of Business Analysis by Carnegie Mellon University
Source: MobiDev

Value Proposition

A value proposition describes what exact problem the product is solving. You should compare the difference between the product and other products in the market. 

This value is useful for developing your market strategy and conducting market research. 

Success Metrics

Clarifying your success matrices should be done early in the development phase for you to measure and evaluate success after launching your product. 

Certain key success metrics you should consider are key performance indicators (KPIs) like average order value or custom set goals which are more direct and relevant to your organization.

Marketing Strategy

Start a brainstorming session to develop the perfect strategy that fits your need. Consider the best platform for promoting your product, such as a blog post, SMS marketing, or social media. 

You may have to change your strategy eventually, especially when the finished product is out and ready to be launched. Still, it is best to be prepared and plan concerning what marketing strategy you will implement.

4. Prototyping

The prototyping stage entails intensive research and documentation of the product by the product development team. 

Prototyping is done by constructing the product and creating a more detailed business plan. It involves creating a sample, release, or model of a particular product to evaluate a process concept. 

An advantage of creating a prototype is that it helps you identify major risk areas associated with the product before it is created. 

Here are the areas of focus in the prototyping phase:

Feasibility Analysis

Evaluating your product strategy based on feasibility is the next step in this process. You must eliminate assumptions and ensure the workload and estimated timeline are achievable.

After the analysis, if you discover that these parameters are not achievable, you can make the necessary adjustments by changing the dates accordingly and requesting assistance from stakeholders.

Market Risk Research

Before your product is created, you must analyze any possible risks associated with the product’s production process. Identifying the potential market risks prevents your product launch from derailing from the original business plan.

Document the information derived from the research in a risk register which is a useful tool for communicating risks to your team.

Risk Register Template
Source: Versitas

Development Strategy

At this stage, you begin to work through your development plan, which means you assign tasks, and the timeline of these tasks will follow. The critical path method can help you effectively plan tasks and estimate timelines.

Critical Path Method (CPM)
Source: The Project Management Blueprint

Minimum Viable Product (MVP)

The prototyping stage's minimum viable product (MVP) is the outcome. An MVP is a product with the necessary structure required to launch and nothing above what is required for the product to function. 

One of the advantages of creating an MVP is that it helps your team execute the product launch faster than when they have to build all the necessary features, which can extend the launch timeline. 

The desired features can be added later when bandwidth is available. For example, an MVP motorbike would have features like breaks, fuel tanks, wheels, and seats without a basket or bell.

5. Initial Design

The initial design phase is characterized by project stakeholders working together to produce a product caricature of the product based on the MVP prototype. 

While creating the design, you should make every decision with the target audience in mind. Consider the necessary features to meet your target audience's needs and complement your product's key functions. 

A successful product design entails several activities that may require repeated interaction to get the design perfect. It may involve communicating with several distributors to acquire necessary materials. 

Producing the initial product design involves:

Source Materials

To successfully design the initial product mockup, you must source relevant materials. Source materials may entail ordering equipment, working with various vendors, or creating your product.

Documenting your sourced materials in a shared space where they can be referred to later or when needed is important because these materials were sourced from various places.

Connect with Stakeholders

Communication Is a key component for any project to be successful. Regarding creating the initial design, keeping a tight communication channel is important to verify if your initial design is still on the right track and has not derailed.

You should share daily or weekly progress reports to keep the stakeholders updated and get approval as needed.

Receive Initial Feedback

After completing the design, you must request initial feedback from the senior management team and relevant stakeholders. 

With the feedback acquired, revise the product design as required until the final design has come to the point where it can be developed and implemented. 

You will then move to the validated phase once the senior management team and stakeholders have approved the product for final testing before launching the product.

6. Validation and User Testing

Before launching a new product, you must validate and test it first. The validation and testing process ensures that every aspect of the product, from the development to the marketing, is functioning before it is marketed to the general public.

The validation and user testing process entails:

Validation Testing 

Validation testing is the process of confirming that the product meets its proposed use and that its features can meet the various beads of its users, resulting in the users being satisfied with the product.

Concept Development and Testing

After developing your product prototype, you need to access the prototype and provide viable solutions to issues encountered in the physical production or software development process. 

You can test the product’s functionality by enlisting the help of beta testers and team members to assure development.

Front-end Testing

During the front-end testing phase, you are required to test the front-end functionality of the product to access risks with consumer-facing errors or development code. 

Front-end testing also includes checking the eCommerce functionality and ensuring it is stable for launch.

Test Marketing

Testing your market plan for functionality and errors is crucial before you start the production of the final product. Ensure all necessary camping equipment is properly set up and ready to launch. 

7. Sourcing (If It’s a Physical Product)

Before going into production, you must gather all the materials and secure the necessary partners. Build an efficient supply chain that includes the vendor's activities and resources required to create a product and market it to the right customers who will purchase it. 

The sourcing phase is characterized by activities like finding suppliers and manufacturers and associated factors like storage, warehousing, and shipping. 

Finding multiple suppliers and different potential manufacturers for the materials required for the product will enable you to compare costs to pick the one best suited for your needs.

Diversifying your supply chain has the added advantage of creating a backup option when one supplier fails to deliver. 

Additionally, having multiple supply options helps to protect and safeguard your business for the long term. 

During the sourcing phase, you will have to decide if you will produce your product locally or internationally. Both options have pros and cons; you should access them diligently before deciding the best fit for you.

8. Costing and Business Case Development

A clear picture of what it will cost to produce your product is essential in the development process. 

Costing is a fundamental business analysis in which you compile all the acquired information and sum up your cost of goods sold (COGS) to determine the gross margin and retail price. 

You can calculate the product cost by creating a spreadsheet with each extra cost broken out as a separate line item. Items within the spreadsheet should include your factory setup cost, all of your raw materials, shipping cost, and manufacturing cost. 

An extra cost can significantly impact your cost of goods sold (COGS). These expenses include import fees, shipping, and any duties you may pay to make your product available to your consumers.

The amount you are expected to pay is largely dependent on the location you are producing the product. 

Suppose you secured various quotes for materials or manufacturers while sourcing necessary resources. You can add different columns for each line item that compare the cost. 

You can also create another spreadsheet version, comparing local and international products. 

You can create your pricing strategy for your product after you have successfully calculated your total cost of goods sold (COGS) and subtract it from that price to get your potential gross margin, or profit, on each unit sold.

9. Commercialization

After creating a profitable and successful product ready for the world, the next step is to commercialize it.

Before you reach this stage, you must have quality tested your development and marketing efforts and finalized your product design. Checking off these activities should boost your confidence in your final iterations and be ready to produce your final product. 

Here are the factors you should pay attention to in this stage. 

Product Development

Product development involves physically creating the product you intend to launch or release to your customers. At this stage, you may require additional development for the software concept. 

You should give the development team the MVP interaction and final prototype to produce the product to the perfect specifications. 

Ecommerce Implementation

After the product has been successfully developed, it is time to launch. Your development team will transfer your eCommerce materials to a live state. 

You may have to do additional testing to ascertain that your live product performs as it was designed to function during the previous front-end testing phase. 

Marketing 

After every other important step has been carried out in the development process, the final product is then introduced to the market. The marketing team completes this step after the product development team has completed its job.

When it comes to marketing, you do not necessarily have to spend too much to run ads. Instead, you can use the following tactics for effectively marketing your product to the right audience.

  • You can run chat marketing campaigns.
  • Use gift guides to display your product features and increase awareness 
  • You can run an affiliate marketing campaign by working with major influencers 
  • Enable Instagram shopping 
  • Send product launch emails to generated leads 
  • Run chat marketing campaigns 

Product Development Examples

The product development cycle is different for various industries. Since you have acquired an adequate understanding of the new stages of product development, let us look at real-world examples where they can be applied. 

Let’s consider two popular and well-established industries: beauty & cosmetics and food & beverage. Here are some well-documented case studies about how the product development processes of these industries function. 

Beauty and Cosmetics

Within the beauty and cosmetics industry is a wide range of products constantly expanding due to self-care and wellness trends. These products range from skincare products to makeup to bath products.

Additionally, reasonable beauty and cosmetics brands diversify into all-natural ingredients and sustainability, making it feasible and easier for you to craft a product using the readily available ingredient.

A relevant example is white labeling, which involves the strategic process of sourcing for an existing product or manufacturer and packaging and branding the product they produce with your brand name. 

Whatever strategy you use is acceptable, but certain constants exist concerning mass manufacturing cosmetics. You would require a lab to carry out the manufacturing process and a chemist to ensure the quality stays consistent at scale.

Other factors to consider include:

  • Shelf Life: You must conduct the necessary quality tests and include the product's expiration date.
  • Labels and Warnings: You must identify all the available ingredients used in the product's manufacturing process and highlight the possible reactions. 
  • Laws and Regulations: You should thoroughly research FDA regulations and their relevance to your product and packaging. Factors considered include where the products are manufactured and where you intend to sell them. 

Food and Beverage

The food and beverage industry is a major player in starting a business easily and developing at a low cost from the comfort of your home. 

You can create a new soft drink business in the comfort of your home by sourcing the recipe you can purchase online and also market and sell online and in various stores within your reach. 

To produce food that the FDA would approve and to move from mixing recipes to packaging the product and selling in stores or online, you would have to get a licensed commercial kitchen to produce food that has passed all the necessary health and safety inspections. 

To set up your kitchen, you will require ovens and various cooking equipment to accommodate large batches. 

Suppose you plan to produce in mass and packaging. In that case, you will require a co-manufacturer and a manufacturing facility specializing in processing raw food and beverage products on a large scale.

Here are some other factors you should also consider: 

  • Laws and Regulations: Within various countries are specific regulations concerning allergen warnings, dietary information, and vital health claims that you must comply with. 
  • Labels and warnings: Displaying the ingredients used for manufacturing and the nutrition information is vital.
  • Expiry Dates: A clear understanding of your product life cycle helps make the right decisions about how you package, product, and stock the product to accommodate the expiration dates. 

Who is Part of the Product Development Team? 

The product development process is not successful without the input of many stakeholders and development teams who assist in ensuring the process's smooth sailing. 

Among everyone involved in the process, the major leader is the product manager. Product managers oversee all product tasks related to idea generation, research, development, and product launch.

Here is a list of relevant stakeholders involved in the product development process.

Product Manager

A product manager is primarily responsible for overseeing all areas of the product life cycle and ensuring regular and constant communications between internal and external teams. 

The product manager is responsible for initiating product creativity, new product launches, and relevant market research. He is responsible for all product management roles.

Product Development Manager Skills
Source: ProductPlan

Project Manager

When it comes to cross-departmental communication in product development, the project manager plays a vital role. 

Project managers assist product managers with task delegation, role and project management, and goal tracking. Every project manager must have the essential project management skills to manage projects successfully. 

Design Team

The design team plays a vital role during the design and prototyping phase regarding the visual product concept. 

Connecting UX best practices with product design and brand guidance is crucial for successful product development.

Development Team

The development team's responsibility is to make the implementation of your product on your website possible. In most cases, a team of developers collaborates to build the new product offering depending on the complexity of the concept.

Marketing Team

Before launching the product, the marketing team is responsible for creating and testing an effective marketing strategy. The marketing team measures the success of the marketing initiative.

Sales Team

The sales team collaborates with the project manager to develop a crafted sales strategy and a detailed report on the success metrics after product implementation. 

Senior Management

Before the product can launch, the senior stakeholder has to access it and give the final approval. 

Apart from these roles, other teams involved in the developmental process include finance, engineering, and other key stakeholders.

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Anastasia Belyh

Editor at FounderJar

Anastasia has been a professional blogger and researcher since 2014. She loves to perform in-depth software reviews to help software buyers make informed decisions when choosing project management software, CRM tools, website builders, and everything around growing a startup business.

Anastasia worked in management consulting and tech startups, so she has lots of experience in helping professionals choosing the right business software.