The product development methodology process consists of eight stages. Each stage consists of a description, steps and action items.
Your Product Development Methodology Process Guide
Stage 1: Validate the market problems
This includes conducting a market research to improve your understanding of the market problem that you want to address. Your goal in this stage is to find out whether the new product will indeed solve the existing market problem that is
- Urgent
- Pervasive
- Something the customers will want to pay to solve
This stage is very important in preventing company driven products; that is. Products that are made by companies because they know how to. The goal is to deliver a product that is customer- driven to the market
When conducting this research, avoid discussions that are product based. An example of the discussions to avoid is; how can our new product better meet your needs? Instead, seek to understand the problems in the market by asking about business outcomes that will impact the business significantly. This type of research will lead to breakthrough or disruptive products. The steps of validating the market problem are:
Step 1: Identify market needs and problems
You can do this by talking to potential customers of your product to help you identify the need in the market.
Step 2: Validate assumptions and confirm needs
Host focus group sessions to validate assumptions regarding the problems in the market and what the customers need.
Step 3: Prepare a market research report
Organize the feedback you have gained from talking to the potential customers and focus groups, then communicate the findings internally.
The findings during the research helps the management team to decide whether to proceed to the next product development methodology stage or to abandon the idea.
Step 4: Assess the ability of the firm to launch the new product
Use SWOT analysis to determine if the firm will be able to pursue this new product opportunity given the resources and skills it has at its disposal.
SWOT stands for:
Strength: What is the firm skilled or competent ate?
Weaknesses: What does your firm find difficult in executing
Opportunities: can the firm leverage its strength into an advantage
Threats: Are there any roadblocks or risks standing on your way?
Stage 2: Define the products requirements
After establishing the validity of the new product idea in stage 01, in stage 02, you will conduct a research to identify the features that the new product includes.
- Discover as many features as possible
- Prioritize the features list
The aim of this stage is to include the features that are most sought after by the customers in the first version of the new product. The steps of defining the product requirements are:
Step 1: Document the list of the requirements
List all the associated features and the requirements of the new product based on the market research you conducted.
From what perspective can you analyze the requirements?
- The end user; these requirements or features focus on the utility or functionality of the product. E.g., is the product easy to use?
- Technical evaluators: the focus here is how the products functions technically. Will it integrate into the existing system?
- Decision maker: will the product save money or time for the customer?
Step 2: Analyze and prioritize the requirements
Analyze the customers’ requirements and develop a prioritized list of the new product features.
Stage 3: Evaluate the competitor
Principle 1: Understand that a competitor is any
- Company with a substitute product
- Company with a replacement product
- Thing that can draw customers from you
Principle 2: The aim of a competitive analysis is to make informed decisions in a timely manner such as: opportunities or weaknesses you can act on decisively.
Principle 3: Build a healthy competitive culture
Respect the competitors and talk positively about them with your staff, customers and prospects.
Principle 4: Practice diligence
Review your competitors regularly and check for new entrants as market conditions can change quickly.
Stage 4: Position your products
Positioning is the process of determining your market position.
A strong positioning will help the market see how your product is different from that of the competitor. Without strong positioning, it will take a lot of time and money to show prospects why they should buy from you
Stage 5: Build the business case
A business case is an objective, fact based assessment that that presents justification for developing the new product. It
- Provides the basis for external and internal investment
- Articulates the finding of market research
- Quantifies the rewards and risks
- Provides a cost benefit analysis or a financial model
An ideal business case addresses both the potential down side and up side to an initiative and they are conservative by nature. They should be concise and clear, evolving and well-researched documents that can be revised with time. The steps of building the business case are:
Step 1: Determine the pricing cost and break-even
In order to determine the break even point, you need
- Proposed price
- Expected demand
- Fixed and variable cost
Some of the inputs for developing product pricing are known while others are just assumptions. The better your research is, the more accurate the assumptions will be and this will build your confidence in the business case for product development
Step 2: Write a product development charter
What you need to know about a product development charter;
- Analysis and market research findings are the inputs to this document
- The output in this step is a comprehensive document that will facilitate the product development decision.
- This document identifies the product manager who will lead the development and launch effort.
Step 3: Prioritize product development opportunities
Stage 6: Develop a product roadmap
The product roadmap is the difference between the product success and failure. It guides the effort of product development and provides marketing with the necessary information to do its work. The steps of developing a product roadmap are:
Step 1: Develop a high level product roadmap
What needs to be documented in a product roadmap?
- Product or feature set
- Required technology
- Target customers
- Customer needs
- Trends in the market place
- Market segments and estimated revenue
Step 2: Plan the product development schedule
The phases of technical product development methodology include:
- Product planning
- Product design
- Product development
- Product testing
- Product training
- Product promotion
- Product packaging and distribution
Step 3: Plan for future product release
This step will apply if you plan to update your product in the future. If you do not plan to update the product then you can skip the step.
It involves documenting the customer requirement, product features and the planned release date of the future product version.
Step 4: Build a product development budget
Estimate the staffing cost, production expenses and the overall budget. Developing a product development budget :
- Increases credibility of product manager
- Organizes cost categories in a logical manner
- Ensures proper allocation of resources
Stage 07: Launching the product
This is the process of taking the new product to the market. A solid launch plan:
- Sets clear launch objectives and goals
- Creates early revenue momentum
- Establishes a strong competitive position
- Lays the foundation for post-launch product marketing
Critical factors for a successful product launch include: effective communication, project management skills, process ownership, adherence to a detailed launch plan, lead time for planning and marketing. The steps of launching the product launch are:
Step 1: Drafting the product launch plan
The sections of a product launch plan include:
- Executive summary
- Go to market plan
- Product release milestone
- Deliverables by department
- Launch budget and revenue forecast
- Pricing
- International
- Sections of a product launch plan:
- Risk
- Support plan
- Launch status communications
Step 2: Create the product plan checklist
What should get documented in the product plan checklist?
- Product development stage
- Development
- Task and description
- Owner
- Start and End Date
- Status
Stage 8: Review the launch process
The product development methodology is a process that you will repeat; therefore, you should invest time to review the critical process after each development and launch cycle
Step 1: Conduct a post-launch evaluation
The things included in the post project evaluation include:
- Overall project assessment
- Scope management
- Quality of the deliverables
- The key accomplishments
- Opportunities for improvement
- Future consideration
- Best practices learned
Following this guide to product development methodology will allow your team to successfully develop and launch your product.
