In the new-product development process, which statement best describes the development stage?

Bringing your vision for an original product to life is frequently one of the biggest hurdles for aspiring entrepreneurs.

The product development process can seem almost mysterious, and when you hear the origin stories of other great businesses, the journey to a finished product rarely resembles a straight line.

Certain products are born because of an absence of similar solutions in the market, while others are created because of the gaps that exist in the available products. For example, the owners of Einstein Box could not find the right educational toys for their child, which led them to research the market and create a curated box of age-appropriate toys for kids from ages 1 to 12. 

Tina Roth-Eisenberg, for example, realised that semi-permanent tattoos were lacking when her daughter brought some home, and mobilised her community of fellow designers to create Tattly.

On their own, these inspiring stories don’t provide an end-to-end blueprint for product development, but the similarities they share reveal some of the steps founders consistently take on the road to starting a business and shipping a finished product.

In this blog, we will take you through the fundamentals of the product development process and the steps you can follow to successfully plan your product development journey.

What is a product development process?

The product development process describes the steps a product owner should follow before releasing a new product to the market or upgrading the features of the existing product. It involves all the essential steps, from identifying the product-market fit to planning the best approach for developing and releasing the product to its costing and go-to-market strategy.

Choosing the proper process flow is crucial to ensure a start-to-finish for product development. The two most popular product development frameworks are:

1. Design Thinking Approach: In this framework, you start with understanding the users, their issues and then identify the possible solutions for the user group. This framework ends with creating a prototype and testing the solution in the market to check the market fit.

2. New Product Development Framework: This is a more commonly accepted approach where you begin with your product ideas and validate them in the market to check for the fit. Once it's validated, you build a prototype, plan your entire production and post-production, and work on the costing before actual development.

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Why do businesses need a product development process?

A product development process helps you test the new product developed for market-fit and its usefulness for the customers. Here are some ways in which a thoroughly defined product development process can help you:

1. Provide valuable features
2. Better quality
3. Greater control on development
4. Foolproof your concept
5. Reduce cost significantly

1. Provide valuable features

It helps you add the features the customer is looking for, thus providing better value to them. Then, when you test the waters for the idea, you will know what functionality/feature will pull the user to the product. This will help you plan the product accordingly.

2. Better quality

You will plan everything from the raw materials to the product's features at the planning stage. Additionally, you are also checking the market fit and will end the process by testing your prototype. This will ensure that you release a high-quality and accessible product to the market.

3. Greater control on development

Proper planning allows greater control on what you will do next and how you will release the product to the market. The strategy will also ensure that the product is aligned to the user's needs and the business goals. This helps foster product success and further your growth.

4. Foolproof your concept

This approach allows you to validate the concept with the actual audience and get their feedback before prototyping the idea. In addition, it gives you accurate data on whether the product is approved or not and identifies the pulse of the audience for the idea.

5. Reduce cost significantly

When you take a planned approach, you can simplify the development processes, reduce the cost of materials and ensure you release the product with the essential features. Subsequently, it allows you to reduce the price of the product.

The new product development process framework explained

The new product development process framework involves bringing an original product idea to the market. Although the process differs from industry to industry, it can essentially be broken down into six stages: ideation, research, planning, prototyping, sourcing, and costing.

This six-step framework is widely used in the product development industry and has been cited in several studies and academic papers, an example being the academic paper titled  “A framework for successful new product development,” written by Nadia Bhuiyan. The purpose of this paper was to propose a development framework that would help launch a new product successfully into the market. It also proposed the inclusion of relevant metrics for measuring and monitoring the success of the framework. 

As a stakeholder in the product development process, you might be aware of the complexities involved in developing a product from scratch. These six stages aim to simplify the process, and help product developers release an innovative and useful product in the market. 

Below, we have explained the factors that you must consider at each stage of the product development process. 

1. Ideation

Many aspiring entrepreneurs get stuck on ideation, often because they’re waiting for a stroke of genius to reveal the perfect product they should sell. While building something fundamentally “new” can be creatively fulfilling, many of the best ideas are the result of iterating upon an existing product.

The SCAMPER model is a useful tool for this stage. It helps you quickly come up with product ideas by asking questions about existing products. Each letter stands for a prompt:

• Substitute (e.g. fur in faux fur)
• Combine (e.g. a phone case and a battery pack)
• Adapt (e.g. a bra with front clasps for nursing)
• Modify (e.g. an electric toothbrush with a sleeker design)
• Put to another use (e.g. memory foam dog beds)
• Eliminate (e.g. the middleman to sell sunglasses and pass the savings on to consumers)
• Reverse/Rearrange (e.g. a duffle bag so that it doesn’t wrinkle your suits)

By asking these questions, you can come up with novel ways to transform existing ideas or even adapt them for a new target audience or problem.

If you're still looking for your "aha!" moment, we also put together a list of resources for coming up with your own product ideas. It includes analysing online marketplaces and reinventing historical trends to help you create new products for your target market altogether. 

While using the SCAMPER method to brainstorm your ideas, you would come up with plenty of options. However, not all ideas may be worth serious research. Therefore, build a checklist or a set of criteria, keeping your business goals in mind, to help you decide whether a particular idea deserves to be considered for further ideation. 

For instance, you may accept an idea that is solving an impending problem of your target audience while being financially feasible. However, it would be wise to reject an idea that seems unrealistic or far-fetched. For instance, your product idea may be largely similar to a product that already exists. In such cases, you have to act objectively and outright reject the idea, however dear it may be to your heart.

2. Research

With your product idea in mind, you may feel inclined to leapfrog ahead to production, but that can become a misstep if you fail to validate your idea first. During this phase, when thoroughly researching the market for your idea, check for the product-market fit. 

Product validation ensures you’re creating a product people will pay for and that you won’t waste time, money, and effort on an idea that won't sell. There are several ways you can validate your product ideas, including:

• Talking about your idea with family and friends
• Sending out an online survey to get feedback
• Starting a crowdfunding campaign
• Asking for feedback on forums like Reddit
• Researching online demand using Google Trends
• Launching a “coming soon” page to gauge interest via email opt-ins or pre-orders

Before you decide to go about validating your idea, it is important to get feedback from a substantial and unbiased audience as to whether they would buy your product. However, be wary of overvaluing feedback from people who “definitely would buy” if you were to create your theoretical product—until money changes hands, you can’t count someone as a customer.

Validation research will also inevitably involve competitive analysis. If your idea or niche has the potential to take off, there are likely competitors already operating in that space.

Visiting your competitors’ websites and signing up for their email lists will allow you to understand how they attract customers and make sales. Further, asking your potential customers what they like or dislike about your competitors will help you identify the gaps and define your competitive advantage.

The information compiled from doing product validation and market research will allow you to gauge the market demand for your product. It will also help you identify the level of competition that exists in the market and help you better in the planning phase. Here is a free competitive analysis template to help you out with this task. 

3. Planning

Since product development can become complicated quite quickly, it’s important to take the time to plan before you begin to build your prototype.

When you eventually approach manufacturers or start looking for materials, if you don’t have a concrete idea of what you want your product to look like and how it will function, it’s easy to get lost in the subsequent steps.

The best place to begin planning is with a hand-drawn sketch of what your product will look like. The sketch should be as detailed as possible, with labels explaining the various features and functions.

ou don't need a professional quality drawing since you won’t be submitting it to a manufacturer at this stage. However, if you are not confident that you can produce a legible diagram that will make sense of your product, it is easy to find illustrators for hire on Dribbble, UpWork, or Minty.

However, sketches are not a universal method to plan, and may not work for all the products. In certain cases, such as the beauty and cosmetics industry, you can initiate planning by listing down the unique proposition, colour, texture, and chemical formulation of the product.

You can use the sketch or the ideated formulation to come up with a list of the different components or materials you will need to bring the product to life. The list need not be detailed but it should be enough to help you make a prototype.

For example, a drawing of a purse design could be accompanied by this list:

• Zippers (large and small)
• Silver clasps
• Leather straps
• Protection pouch
• Embossed label
• Interior wallet

The packaging, labels, and overall quality of your materials should be considered as well before you continue to the sourcing and costing stages. These will have an effect on how you market your product to your target customer, so it’s important to take these aspects of your product into consideration during the planning phase too.

Additionally, you should also plan the potential roadmap of your product by addressing questions like:

• Can the product be used as an everyday item or is it suited for special occasions?
• Will it use premium materials or lean towards sustainability?
• Is it solving an unresolved problem or bridging the gaps of an existing product?
• What are some of the success metrics for this product? 

The answers will not only guide you with planning the product development journey but also help you with product positioning later on.

4. Prototyping

The goal of the prototyping phase during product development is to create a finished product to use as a sample for mass production.

It’s unlikely you will get to your finished product in a single attempt—prototyping usually involves experimenting with several versions of your product, slowly eliminating options, and making improvements until you feel satisfied with a final sample.

Several prototypes for the Angle Razor by Morrama.

Prototyping also differs significantly depending on the type of product you are developing. The least expensive and simplest cases are products you can prototype yourself, such as food recipes and cosmetic products. This do-it-yourself prototyping can also be extended to fashion, pottery, design and other verticals, if you are lucky enough to be trained in these disciplines.

However, more often than not, entrepreneurs will work with a third party to prototype their product. In the fashion and apparel industry, this usually involves working with a local seamstress (for clothing and accessories), cobbler (for shoes), or pattern maker (for clothing). You can usually find these services online by Googling local services in the industry.

Most large cities also have art, design, or fashion schools where students are trained in these techniques. Administrators from these university or college programs can usually grant you access to their internal job board, where you can create a request for prototyping help.

For objects like toys, household accessories, electronics, and many other hard-exterior objects, you may require a 3D rendering in order to make a prototype. Artists or engineers who are trained in computer-aided design and drafting (CAD) software can be contracted to do this, using UpWork or Freelancer. There are also user-friendly online tools such as SketchUp, TinkerCad and Vectary, for founders who want to learn how to create 3D models for themselves.

A 3D rendering for the Trifecto Infinity Pen.

To get a 3D design turned into a physical model, makers have to get moulds made for each part from contract manufacturers. Moulds are typically expensive and involve setup fees for things like tools and die that are used to cut and shape pieces of plastic and other hard materials.

Luckily, with the innovation of 3D printing, designs can be turned into physical samples at a much lower cost with a quicker turnaround time.

Chris Little, the founder of Wintersmiths, prototyped his line of barware using Quickparts, and explains that he was able to do so on a budget and within a few days time. Alex Commons of Bulat Kitchen recommends 3D Hubs, which he used to prototype a knife, paying around $30 per 3D-printed model.

A 3D-printed Bulat Kitchen knife design by 3D Hubs.

5. Sourcing

Once you have a product prototype you’re satisfied with, it is time to start gathering the materials and securing the partners needed for production. This is also referred to as building your supply chain: the vendors, activities, and resources that are needed to create a product and get it into a customers’ hands.

While this phase will mainly involve looking for manufacturing-related services, you may also factor in storage, shipping, and warehousing into your choices at this stage.

In Shoe Dog, a memoir by Nike founder Phil Knight, the importance of diversifying your supply chain is a theme that is emphasised throughout the story. Finding multiple suppliers for the different materials you will need, as well as different potential manufacturers, will allow you to compare costs. It will also ensure that you have a ready list of alternative suppliers to source materials if there are any supply-side issues from existing suppliers or manufacturers. 

It also has the added benefit of creating a backup option if one of your suppliers or manufacturers doesn’t work out. Sourcing several options is an important part of safeguarding your business for the long term.

When looking for suppliers, there are plenty of resources both online and in person. While it may seem old-fashioned, many business owners choose to attend trade shows dedicated to sourcing. 

Trade shows, especially the ones hosted by trade chambers and government ministries, provide the opportunity to meet hundreds of reliable suppliers from India and overseas. During these trade shows, product developers and designers get the chance to check, touch, and discuss materials, and build a personal relationship with suppliers, which can be valuable when it comes time to negotiate prices.

During the sourcing phase, you will inevitably come across the decision of whether to produce your product locally or overseas. It is a good idea to compare the two options, as they both have their own advantages and disadvantages.

6. Costing

After research, planning, prototyping, and sourcing are done, you should have a clearer picture of what it will cost to produce your product. Costing is the process of taking all of the information gathered thus far and adding up what your cost of goods sold (COGS) will be so that you can determine a retail price and gross margin.

Begin by creating a spreadsheet with each additional cost broken out as a separate line item. This should include all of your raw materials, factory set-up costs, manufacturing costs, and shipping costs. It is important to factor in shipping, import fees, and any duties you will need to pay in order to get your final product into the customer’s hands, as these fees can have a significant impact on your COGS depending on where you are producing the product.

If you were able to secure multiple quotes for different materials or manufacturers during the sourcing phase, you could include different columns for each line item that compares the cost. Another option is to create a second version of the spreadsheet so that you can compare local production vs overseas production.

Once you have your total COGS calculated, you can come up with a retail price for your product and subtract the COGS from that price to get your potential gross margin, or profit, on each unit sold.

At the end of the six stages, you have an MVP (Minimum Viable Product) that you can release in the market. It is, however, essential to have a defined strategy to —  enter the market, price the product, and set up the necessary infrastructure to sell the product. 

Here are some questions that can help you identify the right price, proper selling strategy, and the different ways to launch your product.

1. What is the unique value proposition of the product that sets you apart?
2. How have you positioned your product? Is it meant for a select audience or for mass consumption?
3. What is the selling strategy you have determined for the product? Are you planning to introduce product bundles or promote cross-selling?
4. Where will you be selling the product? Via offline mode only or via offline and online mode? Your strategy needs to identify the distribution channel and its setup costs adequately.

New product development: The teamwork behind the process

Product development is a highly collaborative process where people from multiple teams connect to ideate, plan, and execute the development. 

Even though their designations may vary across different organisations, here are the key members of a product development team: 

1. Product manager: Product managers are senior members of the team who play a vital role in the process, right from start to finish. They are key decision-makers who identify product opportunities, give shape to the whole process, and define the vision of the product. 
2. Design team: The UI and UX design of the product is crucial for its success. Designers play a crucial role during the prototyping stage. They ensure that the product meets the current market trends while providing the utmost convenience and value to potential customers. 
3. Engineering team: They apply their experience of mass manufacturing to scale the prototype into the final usable product. Their expertise helps them identify the suitable method, practices, and technology (in the case of a digital product) to develop it. 
4. Marketing: This team is responsible for testing the market for the product and initiating the launch activities. 
5. Sales: This team is generally part of the post-release activities. Their role is to ensure that the product is pushed to the right target audience in the most efficient manner. The sales team have a customer-facing job and are key in collecting live feedback from them.

Together, these members ensure that they develop a product that excels in meeting the customers’ expectations while also meeting the best interests of the business.

Product development in popular industries

The product development process will naturally vary by industry, so let's take a brief look at what you might have to consider across three of the largest and most well-established industries: Fashion and Apparel, Beauty and Cosmetics, and Food and Beverage.

These three industries have relatively straightforward paths to product development, thanks to the many well-documented case studies that can be used for inspiration.

Fashion and Apparel

In the fashion industry, product development usually begins the old school way: with a hand-drawn sketch, or the digital equivalent using a program like Adobe Photoshop Sketch or Adobe Illustrator.

A sketch is then developed into a sample using a pattern maker or seamstress. During the prototyping phase, a size set is created, which means a range of samples with different measurements for each size you want to sell. Once the size set is finalised, it is put into production.

Rather than make the product, some fashion and apparel businesses choose print-on-demand to produce their clothing in the beginning. Print-on-demand allows you to upload designs to a third-party app that connects your store with a warehouse and screen-printing facility. When an order is placed online, your design is printed on the existing stock of t-shirts, sweaters, and various other items on offer, creating a finished product without the need to design the entire garment.

Other factors to consider:

• Hangtags: The branded tag that hangs from a garment and usually contains information like price and size.
• Labels: The fabric tags sewed or stamped into a garment that usually contains information about fabric contents and care instructions
• Wash tests: Put your product through wash tests to understand whether it holds up over time and how it should be cared for.

Beauty and Cosmetics

The beauty and cosmetics industry includes a wide range of products that is constantly expanding due to wellness and self-care trends. From makeup to bath products and skincare, many beauty brands are focusing on all-natural ingredients and sustainability, which makes it easier to prototype a product on your own using everyday ingredients.

White labelling is also popular in the beauty and cosmetics industry, which is the process of finding an existing product or manufacturer, then packaging and branding the products they already produce. Whichever route you decide to take, mass manufacturing for cosmetics is usually done by working with a lab and a chemist to make sure quality stays consistent at scale.

Other factors to consider:

• Labels and warnings: identifying all materials used in the product and any potential reactions
• Laws and regulations: researching FDA regulations and how they pertain to your product and packaging, both where they are produced and where you intend to sell them
• Shelf life: conducting tests and adding necessary expiration dates to products

Food and Beverage

Food and beverage products are among the easiest to start developing at a low cost and from the comfort of your own home. The Brownie Stories taught us how you could tweak the original brownies with multiple ingredients to make them yummier. 

With more people turning towards veganism, there was a growing need in the market to create something that was especially for them. The recently turned vegans were meat-eaters. Imagine Meats is a packaged food that tastes like meat but is completely plant-based, catering to this growing meat eater turned vegan market. 

In order to move from recipe to packaged goods you can sell in stores or online, you will need to find a commercial kitchen that is licensed to produce food and has passed a health and safety inspection.

These kitchens are usually set up with large ovens and cooking equipment to accommodate large batches, but if you are considering mass production and packaging, a co-packer or co-manufacturer might be a better option. These are manufacturing facilities that specialise in processing raw materials and producing food and beverage products at scale.

Other factors to consider:

• Labels and warnings: ingredient lists, nutritional information to display
• Laws and regulations: many countries have regulations around dietary information, allergen warnings, and health claims that you will need to comply with
• Expiry dates: understanding your product lifetime and how you will produce, package and stock the product to accommodate this

What will you bring to the market?

Diving straight into developing a prototype and rushing the product launch without due thought to ideation and research might throw up a product that is not suitable for your target market. It would lead to an unnecessary waste of resources and ultimately hurt your finances.

The product development process we have mentioned above is a skeletal framework that is applicable to almost every industry. The process breaks down the seemingly overwhelming task of transforming an idea into a reality, into digestible steps and gives a solid background to commence your product development journey.

However, the exact nature and extent of every stage and its applicability may vary, not only from industry to industry but also from business to business. That’s only obvious. So if you feel that reducing or adding some stages will add value to your product development process, do not hesitate. Go ahead and do so!

Product development, especially for new product developers, can be stressful and exhausting. If you find yourself struggling to figure it all out, remember that every product that came before yours had to overcome the same challenges. 

Stepping back is not an option, so have faith in yourself and get started to create the most awesome product out there! Good luck!

If you need help marketing your new product online, contact our Shopify experts!