Definition of Product Development
In general, the Product Development can be defined as "creating, innovating, or developing entirely a new product , or presenting an existing product with enhanced utility, improved features, more appealing design, better quality and reliability to satisfy the requirements of its end-users."
Meaning of Product Development
Product means a good, service, idea or object created as a result of a process and offered to serve a need or satisfy a want. Development means the act or process of growing, progressing, or developing.
Product Development is a process of improving the existing product or to introduce a new product in the market. It is also referred as New Product Development. The functions of product development are as follows :-
- Creation of an entirely new product or upgrading an existing product,
- Innovation of a new or an existing product to deliver better and enhanced services,
- Enhancing the utility and improving the features of an existing product,
- Continuous improvement of a product to satisfy rapidly changing customer needs and wants.
- Idea Generation - The first step of product development is Idea Generation that is identification of new products required to be developed considering consumer needs and demands. Idea generation is done through research of market sources like consumer liking, disliking, and competitor policies. Various methods are available for idea generation like - Brain Storming, Delphi Method, or Focus Group.
- Idea Screening - The second step in the process of product development is Idea Screening that is selecting the best idea among the ideas generated at the first step. As the resources are limited, so all the ideas are not converted to products. Most promising idea is kept for the next stage.
- Concept Development - At this step the selected idea is moved into development process. For the selected idea different product concepts are developed. Out of several product concepts the most suitable concept is selected and introduced to a focus group of customers to understand their reaction. For example - in auto expos different concept cars are presented, these models are not the actual product, they are just to describe the concept say electric, hybrid, sport, fuel efficient, environment friendly, etc.
- Market Strategy Development - At this step the market strategies are developed to evaluate market size, product demand, growth potential, and profit estimation for initial years. Further it includes launch of product, selection of distribution channel, budgetary requirements, etc.
- Business Analysis - At this step business analysis for the new product is done. Business analysis includes - estimation of sales, frequency of purchases, nature of business, production and distribution related costs and expenses, and estimation of profit.
- Product Development - At this step the concept moves to production of finalised product. Decisions are taken from operational point of view whether the product is technically and commercially feasible to produce. Here the research and development department develop a physical product.
- Test Marketing - Now the product is ready to be launched in market with brand name, packaging, and pricing. Initially the product is launched in a test market. Before full scale launching the product is exposed to a carefully chosen sample of the population, called test market. If the product is found acceptable in test market the product is ready to be launched in target market.
- Commertialisation - Here the product is launched across target market with a proper market strategy and plan. This is called commercialisation phase of product development.