What is the Life Cycle of a Product’s Development?
When a company wants to successfully release a new product or service, there are a myriad of steps, phases and even models (or frameworks) associated with the Product Life Cycle. Within the lifespan of commercial products, from development to release and post-deployment phases, undertaking the endeavor of creating a new product allows a company to occupy a greater market share, to target new customers for their overarching business model, and to increase their top and bottom lines. The entirety of the Product Life Cycle is associated with five core phases, including:
- Development: The development stage is where a possible economic opportunity is defined, which evolves into a concept, idea, and prototype, until the product is fully developed after the key steps of research (including demographics research) and testing.
- Deployment: Deployment is where the product is promoted, marketed, and released to the public, and where sales processes begin.
- Growth & Support: This phase is where profits greatly increase and sales begin to produce more customers out of leads, resulting in the product growing via marketing and promotion. This progression should result in an increase in market shares. This phase is also where support staff may need to help customers, and where the product undergoes tweaks for it to be optimally utilized by the end-user.
- Stabilization: In the last phase (with the exception of the unnamed “legacy/decline” stage where the product falls out of use), economics associated with the product, such as sales, should stabilize and reach a type of plateau (typically), where engineers and executives should revisit the blueprints to determine how they can innovate and make the product evolve to reach more customers.
The first and most critical phase or step is the development phase, where the product must go from a concept to a defined and developed product. There are many important steps within this major phase, but - typically - the first step within this phase should be economics-based, and not product-based. In other words, think-tanks and engineers should first research economic opportunities and ways for the business to increase their market shares by meeting the needs of customers, resulting in a profit. That way, market needs and potential sales should drive the very foundational conceptualization step that serves as the precursor for the creation of an idea, prototype, and product.
Additionally, any product’s design scope and developmental/deployment plan should align with the overarching Strategic Plan and blueprint of the organization, so that the business model is being followed and each step of the development and design process is justified in furthering the company’s core goals. The New Product Development (NPD) phase can also be aligned with a variety of product developmental frameworks, such as those provided by the Product Development and Management Association. Regardless of what framework is used, most frameworks agree on a few key steps for the development of a new product under new product management guidelines, including Ideation and Conceptualization, Design Analysis, Prototyping, Development, Testing, Release, and Maintenance/Support. At all steps, a Chief Finance Officer (CFO) should take a central role in determining projected financial outcomes, resources and funds required for the entire project, and a long-term plan on how well the product is estimated to do in the market.
The Ideation Step
The first step is the overarching ideation step, where a market/economic opportunity becomes a general concept, which transforms into an idea, which should be based on a potential client-base, and a target market. This step should begin with quantitative market research and carried out throughout the design of the product to determine what is needed most in any given market and what will draw more customers and maximum profit gains.
Determining the Innovation Goal
Whether the company is innovating on an existing product or creating a brand new product type, the first step within the ideation phase is to determine what type of economic opportunity - or what is needed most by customers that is not being met by competition - is best for a product. In other words, it is best to begin with setting goals based on known opportunities, which is always followed up with concrete research to determine if any given opportunities can truly be profitable.
As noted above, after an opportunity is thought of by think-tanks and personnel, there must be robust research carried out by marketing teams, finance experts, business analysts, etc., to determine several factors about the product’s potential success:
- Target demographics: This is as simple as who the product is targeting.
- Customer buyer personas: As a precursor to the product’s future marketing plan, this step determines what type of people will be buying the product, and how best to reach them.
- Competition: This step determines how much competition is within the market for the given product.
- Initial Pricing models: Will a Penetration Strategy or Skimming Strategy be used? While a Penetration Strategy sets the initial price very high and gradually lowers it, a Skimming strategy starts off low and increases the price later on.
- Design and Development Criteria, and Resources/Funds needed: This step determines what is needed for the project to be completed, from the development to the support stages (including pre-release and post-release stages).
- Strategic Alignment: This step should ensure that every step of the development process aligns with the company's business model and can be justified throughout the entire process based on the overarching blueprint/Strategic Plan.
After research is carried out, the opportunity, or general concept, can be more defined as an idea, which can then take the form of a rough model that seeks to determine whether the idea has a true business relevance and value. The prototype can then be used for further analyses, such as pre-release tests and technical assessments.
Testing the Idea
Once a prototype is created, it is then possible for personnel to test the idea to determine if the product idea is feasible and profitable. In this step, it is best to analyze factors such as the product's potential strengths and weaknesses, and whether anything on the market does its functionalities better.
Before a prototype is tested - or even created - it is easy for managers to speculate on whether an idea may be very successful.But even when a concept seems very good, only when a prototype is made and tested can it truly be deemed a potentially profitable business venture.
The next step after turning the idea into a developed product is assessing whether the prototype can feasibly be created and turn a profit, based on the requisite resources. In other words, once a goal is set, the idea-turned-prototype must be shown to be a goal that is actually attainable.
Once the product concept has been successfully created and the prototype has been shown to be conceptually feasible, it is necessary to further define if the actual manufacturing process is profitable, and if the entire blueprint of the product can be readily communicated, to, for instance, shareholders and potential customers. Additionally, any potential obstacles to development and deployment should be identified at this point, while engineers should also determine how to integrate all internal components of the product, and what materials/parts (and supplies) will be needed.
Once the ideation phase has been completed, it is now possible for the design teams to begin implementing the blueprint into actually developing the product based on approved blueprints.
After the technical assessment in the prior phase, design teams who will turn the prototype into a reality now begin obtaining all of the materials required for the prototype’s initial design requirements and specifications. Such teams also prepare the facilities that will manufacture the product, and collect supplies for the development of the product.
At this point, the product is fully developed by engineers and manufacturing teams based on design specifications and blueprints. At each step of the development process, costs should be analyzed, resources should continually be monitored, and the status of the product’s development should be compared with the blueprint, and with the product's development timeline.
Once the product is developed, it must be validated and tested before it can be released. This step includes re-assessing the product’s reliability and relevance within the targeted market, and ensuring that the product aligns with the overall strategic goals of the business, and with its initial blueprint.
Once the product has been validated as fulfilling its initial design goals, the product can go into full production by manufacturers. At this point, products can be further tested right before deployment to ensure that the product works correctly. Warranty periods can also be determined and validated at this point.
Once the product has been fully produced, it is time to launch it. At this point, the product has been released and deployed in its pertinent market, and is marketed to its appropriate demographic. Marketing teams and Sales teams begin to play a pivotal role in ensuring that customers learn of the product and have the ability to purchase it in a feasible manner, with all questions associated with the product being answered in the best way possible.
Once a product is released, it is critical that the management teams assess whether the product is performing as expected, and how the product is doing when compared with its competition in the market. At this phase the product is fully evaluated and tweaked as needed (either in production/functionalities, or regarding its marketing) to meet its target goals and reach target demographics.
Teams who evaluate the new product should evaluate each feature of the product (release testing) to ensure that everything works as expected, and to evaluate whether there are features worth keeping and iterated on, or being dropped from the product completely. Additionally, the Chief Marketing Officer (CMO) and Chief Data Officer (CDO) should evaluate marketing and economic data in conjunction with the CFO, to decide whether the product should be marketed to a different demographic, or whether a different marketing strategy should be employed.
Iterate or Remove
Once a new product is released and evaluated, it is up to personnel to decide whether a feature will be retained (and upgraded) or removed from the product. Support admins determine if faults exist in the product, how to support customers, and change features as needed so that the product operates optimally.
Measuring the Success of a Product
The success of a product must be measured with regard to its pricing strategy (penetration vs skimming), competition prices, and potential future market analyses. The product should at least match projected financial goals, and should require minimal resources for its upkeep, such that ultimately it increases the company’s bottom and top lines. Additionally, the product should retain a good market share, and should be compared to its competitors, and should always be aligned to the projected financial goals and sales projections based on the initial finance/competition research in the ideation phase.
These 5 Steps All Weigh Up to Successful Product Launches
There are several frameworks that exist to determine if a new product can succeed when companies determine that there is an opportunity to create something new within a market. While there is no “one size fits all” guide to successfully launching a product, there are a number of standard best practices that should be followed when producing a new product within the market. While creativity is key when launching a product, it is also important to note that utilizing tried-and-true practices in conjunction with creativity is the most sound business practice. Starting with an economic opportunity, turning it into a general concept, then a defined idea and a rough prototype are the proper steps that can result in a finely-tuned, well tested, relevant product that reaches its defined demographics.