Product Development Strategy: How to Create a Product Strategy

Bringing a new product to market can present a challenge if you’re not going into it with all your Ts crossed. You need information, from finding out if a market exists for your product, understanding what users are willing to spend on it, to even how much does it cost to make a product in the first place. This is why strategic product planning and developing a new product strategy is key to increase the success of your launch.

By using a well thought out product development strategy, you’ll be able to bring your new product ideas to market easier and faster. Still, this process requires a step by step approach to help define your next courses of action. With this article, we will be explaining what a product development strategy is, its benefits and how you should be developing one that can help you organize your teams better. 

What is a Product Development Strategy?

A product development strategy refers to a plan that lays the groundwork for launching new products, or updating the ones you already have. These plans include the development process and the contemplate the management of those products post launch. Without one, having a clear path towards measuring the success of the launch can prove difficult.

Some prefer to call it product planning, others wish to emphasis the strategic vision of these plans and call it strategic product planning. Regardless, having a product development strategy in place helps companies consistently deliver products that achieve their business goals while also accomplishing what their target audience expects from products that they’re developing. 

How Does Product Development Achieve Company Growth?

Companies cannot afford to be complacent or stagnate with their current line of products. Client needs, market trends and expectations are constantly evolving. So, why should you use a product development strategy? It used to be that new product ideas were enough for people to flock towards them and find their market. Now, the game is all about finding product-market fit, constantly testing and growing your product to find its place and turn a profit.

With the right product development strategy, your decision making becomes more data driven. This let’s product ideas find their footing in the market, turn profits faster, and opens the door for faster growth than it would with products that don’t have a set plan to follow.

Considerations for Your Product Development Strategy: The Stages of Development

Product development is not a linear process; it is as dynamic as any process you can find. There are, however, seven stages of product development that are universally found in many company’s processes. 

• Idea generation: New product ideas are generated internally. These product ideas come from different sources; internal brainstorming, market research focused on consumer trends and studies using consumer insights as a basis for their studies.
• Idea screening: These new product ideas generated in these brainstorming sessions are then screened to determine if they should be pursued or not. Criteria in this stage of the process include the market potential, the risk in developing these products, the feasibility of developing it in the first place, and how these products can fit in their overall portfolio and business strategy.
• Concept development and testing: After determining which products have the most potential from the previous steps, these product ideas are turned into actual concepts, made for testing and giving actual feedback by consumers. These concepts include their proposed price point, their ideal target audience, the features they’ll have and the benefits the target will be getting from using them.
• Business analysis and market strategy: Forecast the costs the new product ideas will be generating for your business. This, alongside the potential profit from the products, sales volume and promotion costs will help establish benchmarks for determining the success or failure of the new products.
• Product development: Now we’ve reached the part where companies turn these product ideas into finalized products. Not every product development strategy will be the same, because the method can modify the stages they follow; a product development strategy that uses agile product development as a methodology will follow different rules than one that uses the lean methodology.
• Test marketing: These product ideas, now fully functional or in their prototype stage, is tested with real user feedback. These tests allows for companies to figure out if product-market fit is being achieved and what is missing to get to that point.
• Product launch: After constant tests and iterations, the now finalized product goes through a product launch. A new product launch usually includes the promotion of the product, as well as providing user or consumer support when necessary or possible.

The Steps of a Product Development Strategy

As we’ve mentioned previously, a product development strategy requires 4 basic steps to be developed; market research, user research, testing and iterations, leading to a final product launch. Following these steps is necessary to ensure the product ideas being developed will be successful upon launch, while also attending to a company’s business needs. 

Step 1: Market Research

Market research is the first step to developing an effective product development strategy. At this stage, you gather information about potential target audiences you could attend to, what the general market looks like as well as the competition that exists and what they are looking at. An example of this could be to use market research to understand, if your product has to do with software, to figure out what the latest software development trends are being used.

This step gives you a general idea as to the probability of your product’s success in the market if launched. Use existing resources to comb through the state of the market, such as industry reports, statistics, or news articles as a way to understand where the demand is and how your product ideas can find their market fit. 

Step 2: User Research

A product development strategy cannot just work on the general information that can be found on the market; it also needs first-hand information on the potential users you’re planning on making it for. Using resources and methods such ad focus groups, user interviews, analytics, user tests among others, you’ll be able to understand what the most direct stakeholders require or expect from products that you’ll be making.

Spending time with your potential clients is critical. These interactions help validate certain hypothesis that your product currently has and reject others to better delimit what your product ideas need to look like for the target audience’s appeal.

Step 3: Testing

The next stage of the product development strategy is the testing phase. Similar to the previous step, testing puts those hypothesis validated and otherwise into practice. Figuring out how a user may use a product helps define product roadmaps and the product design process.

What are some considerations you should keep in mind during the testing phase of your product development strategy?

• Use mock ups for early user feedback. This is fairly common when the product is following a methodology that requires constant iterations and has multiple deliverables instead of a singular final delivery. However, any product development strategy that uses lean development can also benefit from this. Having mock ups or early iterations include users in the development process
• Test continuously: Not only for feedback on features but also for errors in production, development or otherwise. In our experience, delivering products in multiple increments helps minimize the potential for launching products with errors, since they’d be caught and attended to early on in the development process. 
• Figure out where you are going: Sometimes, a product development strategy will call for not thinking about scale initially; focus on the iterations and the deliverables before focusing on scale. The real question is, what is the cost-benefit ratio of already having scale in the scope of the strategy? For some, scale shouldn’t be at the forefront, but others could benefit from contemplating scale from the get go. Every product development strategy is different.
• Keep an eye on user feedback: This seems redundant considering the first few points we mentioned earlier, however it’s still important to consider anyway. Users should feel like the product does in fact fit withing their expectations and needs. That is a true indicator of a product finding the right product-market fit.

Step 4: Product Launch

The final phase of the product development strategy is the launch. A product launch consists of releasing your new product or new product features to the market. This is coordinated between various teams to ensure awareness and excitement for the products release. 

The product team works alongside, for the most part, commercial teams for this launch, including marketing, sales and customer support teams.

Build a Winning Product Development Strategy with Teravision Technologies

Teravision Technologies has been in the market for over 20 years now, helping companies that are struggling with properly defining their products and building technological competencies to release these products to market. Contact us and let’s get a product development strategy ready for your next product launch!