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A guide to the product development process

Last updated

30 March 2023


Dovetail Editorial Team

Reviewed by

Tim Scharks

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For most business owners, product development is very vital for business success. It’s the first stage in the product life cycle. Although bringing a new product to life can be challenging, thankfully, we have rounded up a guide that will assist you in bringing your concepts to life.

This article will tell you everything you need to know about the product development process, including strategy, stages, and steps.

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What is product development?

Product development is the entire process a new or rebranded product goes through. When a company upgrades an existing product, product development will involve exploring all possible outcomes to produce a version of the product that will satisfy the demand of end users. 

The advantages of product development are endless. It ensures that the product is viable and the process is on track and completed within the stipulated lead time. This ensures the products are of high quality, meet the demand of customers, and gives value to potential customers. A new product also creates growth in a firm and improves the company's market share. 

Is product development the same as product management?

Product management and product development are often used interchangeably since they almost sound identical. However, product management is just one aspect of the process that makes up the entire product development cycle. It’s the overseeing of product development. Product managers are in charge of product management to ensure that products meet the needs and preferences of the consumer. 

What is the product development process? 

It refers to the specialized process of creating or improving new products. It encompasses all the processes of bringing a product from concept through its release into the market. The process can be exciting yet overwhelming, as you must consider many elements. The series of steps involved include ideation, design, development, and commercialization.

What is the new product development process?

The new product development process is a multi-disciplinary approach that turns an opportunity into a viable product that satisfies customers' needs. This refers to introducing a brand-new product to an existing line of products. A new product development process is typically a series of steps a new product goes through, from ideation to its introduction into the market. 

A new product development process is necessary because of the following reasons:

  • Ever-changing customer needs

  • New opportunities for growth and development

  • Heightened competition

  • A way to avert risks

  • Technological advancements

Some common pitfalls to avoid during a new product development process include:

  • Inadequate market research

  • Overestimating market size

  • Launching a poorly designed product

  • Misinterpreting customer needs

  • Focusing on the wrong target audience

  • Launching at the wrong time

  • A poor pricing strategy

  • Risks of competition 

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The product development process

Introducing a new product or revamping an existing one usually involves a series of steps. Below are the six stages of product development:

1. Idea generation (ideation)

Ideation is where product concepts originate from. This step is usually the most significant for brainstorming new concepts and is the backbone of the product development process. Ideation will involve collecting as many ideas as possible to find the best actionable one. You will then be required to conduct an idea screening of all the generated ideas to select the one with the highest chances of performing well. 

Ideas often stem from problems, and businesses may want to help solve them. For instance, businesses generate new product ideas from customers, salespeople, distributors, or top management feedback or concerns. A business owner may optimize customer complaints and turn them into the next big ideas. Other sources of product ideas are:

  • SEO trends

  • Online consumer trend trackers

  • B2B industry publications

  • Web forums

2. Product definition

This stage is often known as concept development. It involves refining the definition of your product concept to ensure that the product development team fully captures customer requirements. Product definition gives an in-depth narrative of your product idea. It gives the functional value as well as the usability of the product. During this stage, the team collects a detailed evaluation of the technical and market aspects of the new product concept. 

Product definition will also involve defining the specifics, such as:

  • The target market for the product

  • Proposed price

  • Features of the product

  • Success metrics

  • Value proposition

Once the team notes all these details, they can visualize the end product.

3. Prototyping

At this point, it’s time to breathe life into your product concept. This step involves creating an actual mockup of your product concept. This step aims to create a finished product for use as a sample for mass production. The stage involves sketching designs and using 3D software to make models. It’s often unlikely to get a finished design only by attempting it once. Therefore, prototyping will involve making several failed attempts before finding a sample that satisfies the customer's needs. 

Prototyping is also the step where the team justifies the investment by creating a detailed business plan. Under this step, the team will perform a thorough examination of the competitive landscape. They will also discuss business and marketing strategies in detail. 

4. Initial design

This phase involves the refinement of the product prototype. Based on the final concept of the prototyping stage, you’ll be required to make the last tweaks to the design. The initial design is created with the target audience in mind to ensure it captures their needs and end goals. 

Other activities performed during the initial design include: 

  • Sourcing materials for the initial mockup 

  • Sharing updates with stakeholders

  • Asking for feedback 

5. Validation and testing

This step involves observing the performance of the developed product in a realistic market setting. The primary role of validation and testing is to evaluate product performance before commercialization. 

Under this step, you can perform corrections and modifications to ensure you eliminate any flaws. Test marketing will validate your marketing strategy and enhance your value proposition. It will involve choosing a small test group that reflects the entire market as closely as possible. You can carry out testing by approaching first repeater purchasers to understand their feelings and thoughts about the product. 

6. Commercialization

After you achieve favorable test results, the product is ready for commercialization. It’s at this stage that you plan full-scale production and officially launch the product. You may do this by introducing the product in phases or simultaneously. 

What should I consider before starting the product development process? 

It’s vital to consider some of the prerequisites of product development. Some of the questions to ask yourself to streamline the product development process include the following:

Is there a demand for the product?

It is essential to identify the market need. Market research is a crucial way of quantifying the size of product demand. It’s also a way of gathering information on consumer desires, behaviors, and buying habits.

Before creating a product, carry out market research and talk to customers to determine if there’s interest in your product. A product is less likely to succeed if there’s no target market.

Valuable research activities you can perform include surveys, focus groups, and test marketing.  

Can it be produced?

Even though a product idea may seem smart, take a deeper look at whether you can actually produce it. For instance, you may discover that another company had tried to produce a similar product but received dismal results.

Next, determine where you will source materials for production and at what cost. 

How can the product reach its customers?

Brands often overlook product distribution, opting for the easiest and cheapest choice rather than investing in a legitimate distribution strategy. As a result, it’s common for startups that have great products to fail due to a lack of a sustainable distribution strategy.

To avoid this, determine the location of your target audience and then choose a suitable distribution strategy. There are a number of ways to distribute products. You can do so through the following channels:

  • Directly to consumers

  • To supermarkets

  • To wholesalers

  • To suitable retailers in your location

  • To institutions

If your target audience isn’t local, e-commerce platforms are a solution to consider. Establish whether you will need to collaborate with international distributors to ship to customers overseas. 

Determine the channels you will use to reach an online target audience. Regardless of the product you’re developing, all business owners want is to build customer bases for them to thrive. Therefore, it’s vital to consider your marketing strategy in detail. 

Customers are becoming more demanding, and old methods like sales promotions and media advertisements no longer work. Instead, consider using creative content on Instagram or YouTube to promote your product to customers. Also, customize your message to appeal to customers. 

Consider these four cost-effective tips to help your product reach the right target audience:

  • Know your target audience

  • Target existing customers—for instance, those in your contact list

  • Work with local brands rather than against them

  • Have a digital marketing strategy—i.e., a strong social media presence

What competition will it have?

Find out whether there are other businesses competing for your market. If there are, strategize on ways that will make you stand out. Conducting a competitive analysis will enable you to know your direct and indirect competitors. The best way to get ahead of the competition is to offer a product they are not offering.

In today's market, having the ability to offer customers products that meet their needs has never been more important. For instance, differentiate your offering by improving what already exists. 

Do you have the necessary financial resources?

The product development process is resource-intensive. Assess the potential costs and development effort required to bring the product into the market. It’s best to compare operation costs with potential revenue. You will likely need to apply for credit if you’re a startup with limited financial resources. 

Who is part of the product development team?

Product development looks simple but packs in the details requiring collaboration with a number of people. A successful product launch usually has a well-structured product development team behind it. It will involve: 

  • Product manager: They will supervise the development process to ensure smooth execution of the plan. They have the responsibility of planning and coordinating tasks. 

  • Engineers: They design the architecture of the new product. They also test its functionality and implement the feature set. 

  • Software developers: They are in charge of delivering a working code on time.

  • UX/UI designers: These designers streamline user experience to ensure their browsing journey is easy and convenient. They are also vested with the role of driving the aesthetics of the product.

  • Quality assurance testers: These specialists review and analyze products for errors or defects that may affect user experience. Their top priority is to ensure the customer receives a quality product. 

  • Business analyst: They define business objectives and establish ways to generate revenue while reducing operational costs. They also act as the bridge between the market and the product development team. 

  • Marketers: They must determine the target market and create a commercialization plan for the product. In addition, they develop pricing, distribution, and promotional strategies for the product.

  • Sales personnel: These members of the team are in charge of growing sales by advertising the product. 

What are the best practices for your product development process?

The approach to product development processes varies from company to company. However, some companies repeatedly use the same strategies to drive success. Here are some of the best practices to adopt as you chart your course:

1. Empathize with user needs. Start the process with a customer-first mindset.

2. Have a clear focus on customer and business value. Integrate customer perspectives and those of the technical team during the process. 

3. Encourage cross-team collaboration by celebrating team members' success and encouraging members to share their skills and expertise.

4. Ensure communication is at the forefront of the process. 

5. Enhance transparency and visibility throughout the entire process.

6. Brainstorm potential solutions and promote a shared understanding of plans.

7. Encourage feedback that you will use for continuous improvement. Feedback can act as a steady stream of ideas for a great product. 

8. Track and measure value through each phase of product development.

9. Set realistic product development timelines. Use road maps to guide the process and create efficient working schedules.

10. Embrace change and be more flexible in adapting to new trends.

11. Embrace failure and see it as an opportunity to learn from your mistakes and improve.

Product development examples

Let's look at three real-world examples of product development.


In the past, Netflix had a business model that distributed its services through direct mail. The shift from mail-in orders to a cloud streaming service has improved millions of customers' experiences. It, therefore, transformed from a DVD rental platform to a streaming company. This call was to remove friction for customers. 


Lenovo modified desktop computers into laptops to improve portability. For instance, they unveiled their ThinkPad X13 and X13 Yoga with the latest features to enhance user experience. The laptops facilitate more effortless mobility and hybrid work compared to their Yoga A series desktop computers.

The New York Public Library

The New York Public Library transformed itself from a traditional library into an e-library for faster access to electronic books. As a result of this shift, the library can distribute its collections virtually as e-books, and readers can access them from the comfort of their homes. A digital library saves the time and energy required to visit a traditional library.


Is Apple an example of product development?

Apple uses product development to develop attractive and profitable products that enhance its market performance. Apple products are thus perceived as high quality because they maximize the product development processes. 

What is the product development strategy of Amazon?

Amazon works with the customer's needs in mind. Their approach to product development is centered on the customer and thus works "backward" to develop products that meet their needs. 

What are the four stages of a product life cycle?

The four product life cycle stages are introduction, growth, maturity, and decline. A product life cycle is the progression of a product through these distinct stages from the time of product conception through its withdrawal from the market. 

What are the seven types of products?

Products are classified into the following types: niche, consumer preferences, convenience, complementary, commodities, unsought, and luxury products. 

What is lead time in new product development?

Lead time describes the time taken to create and deliver a product to the consumer. Simply put, lead time is the interval between the start and completion of new product development.

What are the product development stages?

These are a series of consecutive steps that a product goes through. They are classified into ideation, product definition, prototyping, initial design, testing, and commercialization.  

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