Product Development Process: Create a New Product in 7 Steps

Product development is the act of turning a product concept into tangible merchandise or services. The process is the first stage in the product life cycle. Whether you rush a new product to market via a design sprint or carefully develop your product over the course of years, you’ll invariably follow some version of the product development process.

The product development process is the multi-step process by which market analysis yields new product ideas, which in turn yield actual goods and services to target customer needs. The process of new product development traditionally follows a set business plan overseen by a product team that reports to a manager or business owner. The business plan lays out a systematic approach to the entire process, from sourcing innovative ideas to manufacturing to an initial marketing strategy to the launch phase and beyond.

A cross-functional team typically leads the product development process. This group of individuals may initially form as a concept development team, but by the time the final product rolls off the line, they have become the full-bore product managers that guide every major step in the product's lifecycle. Even after the product launch, product management continues in the form of customer service, manufacturing logistics, expanding market share, and iteratively improving the product.

The product development process is important because it provides a systematic approach to original product research and development. Using proven methods like a SWOT analysis, project managers and their senior management team can guide the process using methodical data analysis, whether that's naming a target market, beta testing, supply chain logistics, marketing, or shipping consumer goods.

The following steps go into the product development process:

1. 1. Product brainstorming: Brainstorming helps you develop a product that fulfills a specific need in the marketplace. Use this early stage to pitch ideas to the entire team. Find a product that both resonates with others and inspires passion within the team.
2. 2. Market research: Use customer research to create a portrait of your target customer. Is your ideal customer male or female? Old or young? Urban, suburban, or rural? Tech-savvy? More likely to shop in a physical retailer or online store? What similar products or services do you imagine them using? Answering these questions will help you appraise current trends and satisfy a real need in the market.
3. 3. Strategic planning: Creating a strategic plan involves crafting a statement of purpose, running a SWOT analysis (SWOT stands for "strengths, weaknesses, opportunities, threats"), establishing a defined management process, and drafting a roadmap to goal attainment. The management team may want to commission a feasibility study to ensure the great products they're scheming up really can reach their intended customers. The best strategists combine short-term and long-range planning, and a time-based roadmap can help keep the whole team on the same page.
4. 4. Building a prototype: Unless you're revamping an existing product, you will need a product prototype for your merchandise. Even a services-based business needs a prototype for what they will provide. A prototype will help you understand the user experience, facilitate front-end innovation, and improve your final design.
5. 5. Funding: Based on your team's business analysis, you may need to finance your project via crowdfunding, business loans, or angel investors. Unless you have a track record, venture capital and private equity are unlikely to be options at this initial stage of your business, so plan accordingly.
6. 6. Manufacturing: The manufacturing process will burn through money faster than any other product development phase. Therefore, it is crucial to have the most economically efficient supply chain, physical space, and production staff. Whenever possible, your design team should craft their technical specifications to make manufacturing as easy as possible.
7. 7. Distribution: For new offerings to reach groups of target consumers, project management teams must devise effective marketing and distribution platforms. If your company has a marketing department, it should present a marketing strategy statement that identifies a viable price point, advertising budget, and customer conversion rate. Whether you're partnering with brick-and-mortar retail stores or selling your product via your e-commerce website, you must nail this final phase to make the product development process a success.

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