Product development strategy transforms the product vision, problem statements, and solution proposals into powerful products that can be presented to the targeted audience.
To ensure effective efforts of product development, product managers should consistently focus on the product and customer experience.
Succeeding at product development needs the ability of design thinking, agile methodologies, determining the difference between MVP and Prototype as well as skills to collaborate with the developers. It will help to ensure that the product will be delivered as expected.
With a well-thought-out product development strategy, businesses can avoid time, money, and resources wastage. The strategy will also help with product planning, analysis, receiving customer views and expectations.
This post will walk you through the importance of product development strategy and how it will help businesses to conquer the market. So, let’s get going.
Introduction – Product Development Strategy
A product development strategy is a process of presenting a new product into an existing/new market by performing constant market research, comprehensive testing, and thorough product concept planning. It also helps to update existing products to drive new business revenues.
Product development strategy doesn’t mean a single strategy, rather it comprises a collection of strategies, plans, and actions implemented at different product development phases.
Whether you have a successful product or not, you can leverage a product development strategy to enhance business growth.
Why Do Businesses Need Product Development Strategy?
Product development strategy is significant as it leverages thorough market analysis to make a success plan that helps sell products.
According to McKinsey Global Institute, see these four statistical facts.
- Only four product concepts out of seven reach the product development phase.
- Only three products get released from fourteen product concepts.
- Only a single out of seven product concepts will help with a successful ROI.
- Released products have a 25-45% failure rate.
Research reveals that some of the products collapse as they lack a structured development strategy. By adhering to a well-planned set of procedures and targets, businesses can prevent some of the drawbacks that lead to the new products’ failure such as,
- Misinterpretation of users’ needs
- Poor designing
- Overestimate market size
- Very high prices
- Wrong launching time
- Poor marketing
- Competition risks
- Increased cost due to resource overuse and overrun
How Product Development Strategy can be a Game-changer?
#1. It establishes a culture of innovation
New ideas help to create new products. With new products, development strategies occur. A new product development strategy drives new revenues. New revenues can be leveraged to foster fresh ideas.
This is called a culture of innovation where every step assists the next step. It will help brands and businesses to grab a greater market share.
#2. It drives a higher value proposition
When a product development strategy is focused on addressing users’ needs, it will help to drive a higher value proposition for the basic demographics of a business.
With increased value propositions, it is possible to have more repeat buyers as well as optimistic word-of-mouth marketing. It can generate greater business revenues.
#3. It can expand professional network
The right product development strategy will appeal to a targeted audience from within the industry of a business as they are seen as a leading-edge organization. People would love to connect to the groundbreakers and experts who are running the modern business.
It means the business-to-business and business-to-consumer network will always have a chance to grow with the right product development strategy.
#4. It can save money and improve competitiveness
The product development strategy is aimed to mitigate the business risks by assessing the potential of the product concept and the current market conditions.
Determining the product effectiveness before launching in the market facilitates businesses to adopt the concepts based on users’ needs that ultimately save time and money. Having this detail can act as a secret weapon to present a business idea and keep the business economically stable for longer.
#5. It can boost sales
A product development strategy is helpful when you want to boost sales. The initial step is to assess the historical data to identify the best year of sales. Analyzing any previous marketing strategies to understand how productive they were can also help build the right development strategy.
Once you have this information, you may have a clear understanding of what worked well and what to improve. Based on that, it is possible to set strategic goals for sales. Certain goals are quite more feasible as it is possible to make a strategy with clear and precise steps.
Best Practices for the Product Development Strategy
Many enterprises often deliver successful products to the market although each of their particular methods differs from each other. Here are some of the best practices to consider for the new product development strategy.
- Acknowledge the users’ needs.
- Assess market research and users’ feedback.
- Interact with your employees for more precise reviews and insights.
- Use available frameworks to build a product.
- Test the product in small units before launching a full-scale product in the market.
- Involve cross-functional teams into the brainstorm and ideation phase because excellent insights for the targeted market come from anywhere.
- Set a feasible development deadline.
Summing Up
In a highly competitive market, a business should constantly adapt the new product development strategies to excel. The understanding of product life cycle and extension strategies results in the growth of a business.
Note that listening to customers’ needs is a must for the success of any product development strategy.