How to Develop a Product from Concept to Market
When you’ve got an idea for a new product, it’s easy to get excited about its future. Let’s not count your chickens before they hatch, though, because the reality of product development can be a less optimistic one than you’re imagining.
Truthfully, only a handful of products developed make it to the market. With so many things that can happen between making your dream product a reality, it’s all too easy to get your hopes up and feel disappointed when things don’t work out.
With that in mind, if you’ve got an idea for a new product, you need to understand the product development process before you get to work building prototypes. This ensures that you’ve got a clear picture of what you need to achieve before your product can go to market.
New Product Development: Step-By-Step
Step 1: Ideation
If you’re reading this, then chances are that you’ve already got an idea for your product in mind. Whether you already know what product you want to develop or you’re looking for inspiration, it’s good to keep the SCAMPER model at the forefront of your mind.
While developing a completely new product can be fulfilling, it’s also extremely risky. With some of the best products in modern times being improvements on older ones, the SCAMPER model prompts you to think about changing aspects of existing products. For example:
- Substitute: Changing plastic packaging to metal
- Combine: Adding a wallet to a phone case
- Adapt: Shirts with magnetic “buttons” to make it easier to dress
- Modify: Toothbrushes with a more ergonomic design
- Put to another use: Photo frames made from reclaimed wood
- Eliminate: Sell cosmetics directly to consumers without needing sales representatives
- Reverse/Rearrange: A suit cover that can be rolled without wrinkling the clothes
Step 2: Research
With your idea in mind, you need to make sure that it’s a product that there is a genuine need for and that people are willing to buy. This makes sure you’re not wasting time, money, and resources on prototyping something that won’t sell well, or at all.
To validate your product ideas, you need to get feedback from a variety of sources. Here’s how you can go about product research:
- Asking family and friends
- Surveying current customers via email or social media
- Starting a thread on Reddit or an industry forum
- Using Google Trends to research demand for products and services
- Creating a landing page for customers to show interest through pre-orders or email sign-ups
- Searching competitor’s websites and social media to gauge interest for competing products
Step 3: Planning
Before you move on to building your prototype, you need to plan how your product will look, function, and an idea of what materials you’re looking for. A hand-drawn sketch will suffice here, as manufacturers want to see you’ve at least got an idea of what you want. Your sketch should be labelled with the different features and functions of your product.
You should also begin thinking about price points for your product, and how you see your product being used, as this will help when it comes to marketing your product. Thinking about packaging and merchandising now will also set you up for success later down the road.
Step 4: Prototyping
Prototyping is arguably the most expensive and time-consuming aspect of product development, but it’s the most important step in creating a product that fits your vision.
Depending on the product, you may be able to do some of the prototyping yourself, particularly if you’ve already got the skills to make the product you’re designing. If you’ve got access to a 3D printer and know how to design 3D models, this can also help you to save money.
However, don’t be afraid to work with third-parties - and a variety of them - to prototype your design. You’ll likely find that you have to work with multiple designers and several versions of your product to find a design you’re satisfied with, so don’t expect this stage to be quick or cheap.
Step 5: Sourcing
Once you’re satisfied with your prototype, you need to start building your supply chain. This means talking to suppliers to source materials, manufacturers to determine overall costs, shipping options, and potentially even warehousing and storage.
You should also weigh up whether you want to manufacture your product locally or overseas, as both can have their advantages and disadvantages. Either way, you should spend plenty of time going through your options and looking at every detail of your product sourcing, as it will all add up to the overall cost.
Step 6: Costing
At this stage, you should have a clear understanding of how much it will cost to produce your product. Now you’ve got figures for every part of your product, you now need to work out your cost of goods sold (COGS) to determine the product’s retail price and your profit margin.
To do this, you need to make a spreadsheet with each cost as an individual line item. Remember to include every single detail of your product, such as shipping costs, import fees, any duties and taxes, and warehousing costs, as these will all have an impact on your COGS.
If you’re still comparing prices, then it’s recommended that you have multiple spreadsheets with different COGS so you can compare overall prices.
Step 7: Commercialisation
The last stage is to determine when you introduce your product into the market. The timing of commercialisation can make the difference between a profitable product and one that flops, so you need to weigh this up carefully. Factors like the health of the economy, competing products, and current trends should be taken into account when you consider timing.
You also need to consider where you’re introducing your product. If you’ve got an eCommerce business then this might not matter as much to you compared to if you’re launching products in stores. However, you might consider only rolling out new products through specific platforms, or in specific areas, so you don’t take on too many costs at once.
New Product Development: An Overview
To develop a new product, it’s important to spend the time planning and researching your product ideas before you get to prototyping, as you might find there’s no market interest in your proposed product. When you know people are interested, then you can move forward with prototyping, before you begin finding manufacturers and other vendors. Finally, you need to accurately cost everything to work out a final retail price and your gross profit margin.