Product and Service Development — Overviews and Resources

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    Product and Service Development — Overviews and Resources

    © Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.

    As written in Wikipedia,
    in product development, “The product can be tangible (something physical
    which one can touch) or intangible (like a service, experience, or belief),
    though sometimes services and other processes are distinguished from ‘products’.”
    Although there are additional differences between the nature of a product and
    service (as explained below), for the sake of expediency, this topic will use
    the term “products” to refer to both. Also, this topic focuses primarily
    on the development of a product, rather than primarily on its ongoing management.

    Nonprofit organizations often provide services in the form of “programs”,
    rather than “products” — although the services from the programs
    are certainly “products or services” to groups of clients. Thus, nonprofit
    readers might more readily relate to the following guide.
    Basic
    Guidelines for Nonprofit Program Design and Marketing

    A nonprofit that is developing a tangible product to generate a profit for
    the organization (referred to as a Social
    Enterprise
    ) might benefit from reading the content in this topic about product
    development.

    Sections of This Topic Include

    Introduction to Product Development

    What is a Product? A Service?
    What is Product Development?
    Product Development and Product Life Cycles
    Five Different Approaches to Developing Products
    Typical Phases in Carefully Developing Products

    Preparation

    Are You Really Ready?
    First Broaden Your Perspective
    Planning New Business in Addition to Product?

    Developing Your Product

    Phase 1: Generating Ideas
    Many Sources of Ideas
    Protect Your Ideas
    Phase 2: Researching
    Is Idea Feasible? Viable?
    Need an Investor or Funder for Your Idea?
    Phase 3: Testing
    What Will Customers Think of Your Ideas?
    How to Get Feedback From Customers
    Phase 4: Analyzing
    What Have You Learned So Far?
    —What About Design Specifications? Project Planning?
    Phase 5: Rolling Out
    Developing Your Marketing Plan
    Why Should Customers Buy From You?
    What Will You Convey to Your Customers?
    Additional Perspectives on Product Development

    Also consider
    Customer
    Service
    Operations
    Management

    Related Library Topics

    Learn More in the Library’s Blogs Related to Entrepreneurship — Product and Service
    Development

    In addition to the articles on this current page, also see the following blogs
    that have posts related to Entrepreneurship — Product and Service Development.
    Scan down the blog’s page to see various posts. Also see the section “Recent
    Blog Posts” in the sidebar of the blog or click on “next” near
    the bottom of a post in the blog. The blog also links to numerous free related
    resources.

    Library’s
    Business Planning Blog

    Library’s
    Building a Business Blog

    Library’s
    Customer Service Blog

    Library’s
    Leadership Blog

    Library’s
    Supervision Blog


    What is a Product? A
    Service?

    Basically, a product is a tangible offering to a customer, whereas a service
    is an intangible offering. The former is usually a one-time exchange for value.
    In contrast, a service usually involves a longer period of time. The value of
    a product is inherent in the tangible offering itself, for example, in the can
    of paint or pair of pants. In contrast, the value of a service often comes from
    the eventual benefit that the customer perceives from the time while using the
    service. In addition, the customer often judges the value of a service based
    on the quality of the relationship between the provider and the customer while
    using the service. To understand more differences, see
    Difference
    Between Product and Service
    6
    Key Differences Between Services and Products

    What is Product Development?

    The Entrepreneur
    website defines product development as “The overall process of strategy,
    organization, concept generation, product and marketing plan creation and evaluation,
    and commercialization of a new product.” That site also suggests eight
    situations when product development is needed. Also see
    New Product
    Development
    What
    is Product Development?
    What
    Is the Difference Between Product Management, Product Marketing, Product Development
    and Program Management?

    Therefore, product development includes a wide range of activities, ranging
    from the time that there is a new idea for a product and up to the ongoing management
    activities to produce and provide the product to customers. (The latter is referred
    to by the phrase “product management.”) How a product is developed
    depends very much on the nature of the organization and its products, for example,
    retail, manufacturing or wholesale. It also depends on the culture of the organization,
    for example, whether products are developed intentionally and explicitly or
    unintentionally and implicitly.

    Product Development and Product Life Cycles

    Products, just like people and organizations, go through various phases in
    their lives (Basic
    Overview of Life Cycles in Organizations
    ). Different experts suggest different
    stages in the life cycle and give them different names. It helps a great deal
    to know about different phases in the life of an organization or product because
    it suggests the types of activities that are typically seen in each phase, as
    well as what activities to do to evolve to the next phase.

    For example, the following article suggests Development, Introduction, Growth,
    Maturity and Decline. Product development occurs primarily during the first
    phase. The typical final phase of product development is when it is launched
    or promoted to potential clients. That final phase could be included in the
    Introduction phase of the product’s life cycle.
    Product
    Life Cycle & Product Development Cycle

    Five Different Approaches in Development
    Products

    There are at least five different common approaches to developing a new product.
    Some approaches seem to start out slow and soon stop altogether. Other approaches
    start out fast and then end in a flurry of confusion. Still, other approaches
    start out carefully and go on to make a huge difference for their customers.
    The approaches include:

    1. “Build It and They Will Come” Approach
    2. Seat-of-the-Pants Approach
    3. Incremental Planning Approach
    4. Business Planning Approach
    5. Business Development Approach

    Approaches
    to Developing Products and Services

    Typical Phases in Carefully Developing Products

    There are a variety of models, or sequences of phases, that people use to develop
    a product or service, including:

    1. Fuzzy front-end, including often informal sharing and clarification of ideas
      for the new product.
    2. Product design, including activities that result in a detailed set of specifications
      for the product’s design.
    3. Product implementation, including refining the specifications by testing
      them, often through development and use of a sample (or prototype) of the
      product.
    4. Fuzzy back-end, including producing the new product and rolling it out to
      potential markets.

    The following article suggests five phases similar to the above in product
    development, including the following.

    1. Idea generation (creativity
      and innovation
      , brainstorming,
      competitor
      research
      )
    2. Research and development (market
      research
      , design
      thinking
      , prototyping,
      feasibility
      testing
      )
    3. Testing (focus
      groups
      , customer
      surveys
      )
    4. Analysis (feedback,
      interviews,
      pricing, problem
      solving and decision makin
      g, financial
      projections
      )
    5. Rollout (marketing,
      business planning,
      advertising,
      social media)

    The following content in this topic is according to this five-phase model,
    also listed above.
    Five
    Phases of New Product Development

    These articles suggest various phases, too.
    8
    Step Process Perfects New Product Development

    Product Development: The
    7 Steps of Effective Product Development
    How to
    Develop a New Product (From Concept to Market) (6 steps)

    These articles mentioned numerous models, as well.
    Product
    Development Models
    New
    Models For Product Development
    Options
    in Product Development Models

    Preparation

    Are You Really Ready?

    It’s one thing to have a good idea for a new product or service, but it’s another
    thing to actually develop and provide it — that’s the essence of entrepreneurship.
    The following link is to a resource that will guide you through complete consideration
    of whether you’re really ready for entrepreneurship or not.
    Entrepreneurs
    — Are You Really Ready to Start a New Venture?

    First Broaden Your Perspective

    Many of the activities in product development are also activities in the overall
    process of marketing.
    Basics of Marketing
    (from idea to evaluating to developing to producing)

    Life Cycles
    in Organizations (everything has a life cycle, including products)

    If the reader is highly motivated at this point, then he or she might scan
    the information about the basics of business planning. Business planning is
    usually conducted when starting a new organization or a new major venture, for
    example, new product, service or program. Essentially, a business plan is a
    combination of a marketing plan, strategic plan, operational/management plan
    and a financial plan. Funders or investors usually require a business plan.
    Far more important than the plan document, is the planning process itself.
    Basics
    of Business Planning

    Planning New Business in Addition to Product?

    If you are planning to start a new for-profit business or nonprofit business
    around your idea for a new product or service, then you will benefit from reading
    information in the topics Starting a For-Profit Business or Starting a Nonprofit Organization. Note that information
    in these two topics will guide you through assessing the feasibility of your
    new business — information in the rest of this topic about product management
    will include assessing the feasibility of developing a new product. It’s likely
    that if you are starting a new business, you will eventually need information
    in the rest of this topic about product development.

    Phase 1 — Generating Ideas

    Many Sources of Ideas

    At this stage, someone has an idea for a new product or service. Ideas can
    come from many sources, for example:

    1. Complaints from current customers (see Customer Service and Customer Satisfaction).
    2. Requests for Proposals from large businesses and government agencies.
    3. Modifications to current products (see Innovation).
    4. Suggestions from employees, customers and suppliers (see Creative Thinking).
    5. You can learn a lot from analyzing your competitors (see Competitor
      Research
      ).

    Protect Your Ideas

    It’s likely that someone else will think your idea is a good one, too! Therefore,
    it’s important to protect your idea as much as possible, for example, by getting
    copyrights, trademarks or patents. See U.S. Intellectual Property Law

    You might also want to minimize the chance of an employee taking the idea and
    starting their own business. See
    Non-Compete
    Agreements

    Phase 2 — Researching

    Is the Idea Feasible? Viable?

    Just because it seems like a great idea doesn’t mean that it can become a product.
    A feasible product is one that can be realistically developed and delivered
    to meet the needs of potential clients. A viable product is one that needs to
    be profitable (or, in the case of a nonprofit, at least sustainable), including
    being producible and marketable.

    Also, the product should be related to the purpose, or mission, of your business.
    Businesses can go bankrupt by trying to be too many things to too many customers,
    rather than doing a few things very well. You might use guidelines from these
    relevant topics.
    Feasibility
    testing
    Prototyping

    Need an Investor or Funder for Your Idea?

    For-profits that need investment money will benefit from the
    following link.
    Fundraising
    (For-Profit)

    Nonprofits that need funding will benefit from the following
    link.
    Fundraising
    (Nonprofit)

    As noted above, you very well may need a business plan to convince the investor
    or funder that your idea is viable to become or product or service. See Basics of Business Planning

    Phase 3 – Testing

    What Will Customers Think of Your Ideas?

    Now is the time to get input from those who would be using the new product.
    When products have very low sales, it is often because the developers had more
    faith in their own preferences than in those of the customers.

    But before you can get input from the potential customers, think about who
    those groups (or target markets) might be? Thank about:

    • Where did you get the ideas to develop the products in the first place?
    • Who is using products that seem similar to those that you are thinking about
      developing?
    • What have you been hearing and reading about regarding strong unmet needs
      among various groups of people? What might meet those needs? Are those needs
      within the scope of your organization’s mission and capabilities.

    How to Get Feedback From Customers

    There are a wide variety of ways to get feedback from customers. The most common
    are using the following tools.
    Focus
    Groups
    Customer
    surveys
    Interviews

    A powerful way to get very useful feedback, especially regarding ideas to improve
    your new product, is to use design thinking. It is unique in that it is a hands-on
    approach that deeply involves the people (the users) who are affected by their
    problem or unmet need.
    Design thinking





    At this point, you’ve concluded that your idea can become a viable product.
    Now you’re faced with actually building the product itself. The particular process
    you use to build your product or service depend very much on the nature of the
    product or service. The following links might help you as you develop your unique
    process to build your product.
    What Is Your Product Saying to Consumers?
    What
    is a Bug List?

    What’s
    next for design?

    Now’s the time to write an overall, or functional, description of your new
    product. The more detailed description comes during the next phase.
    What
    Are Functional Specifications

    Phase 4 — Analyzing

    What Have You Learned So Far?

    Now is a good time to consider:

    • What did you hear from potential customers?
    • What changes are needed to your original design?
    • How will you make them, who will do it and by when?
    • What will the changes cost to implement? To continue to produce?
    • Who will be your primary target markets? What are the primary needs and
      wants of that target market?
    • What is the likely cost to develop and produce the product?
    • So what pricing structure should you use?
    • Who will be the primary competitors of your final product?

    These questions are often answered when developing a business plan for your
    new product.
    All About Business
    Planning

    What About Design Specifications?
    Project Planning?

    You certainly should develop and implement of a project plan to build your
    product.
    Project Planning
    (method to carefully plan and track development of the product/service)

    Businesses are coming to learn that it’s never too early to integrate principles
    of quality management into the design and development of products and services.

    Basics About Quality
    Management

    What about a final written specification that employees can use to develop
    and provide the product?
    Building
    a Requirements Document

    Inside
    Technical Specifications
    Displaying
    Technical Writing Skills

    Phase 5 — Rolling Out

    Developing Your Marketing Plan

    Now you are ready to get the word out about your new product. Especially for
    a new product, it is very important to do that very carefully and systematically.
    It is not a time to start bursting our whatever positive messages that you have
    to convey to anyone who will listen. That would be a major mistake.

    The place to start is to understand what goes into a marketing plan. See the
    following topics in the following order:
    Marketing: Planning
    and Strategizing
    Sample
    Marketing Plan

    Why Should Customers Buy From You?

    What are the unique features and benefits of the new product? Why should customers
    buy from you, rather than from competitors? The answers to this questions are
    your positioning statement.
    Clarifying Your
    Unique Selling Position — Your Best “Elevator” Pitch

    What Will You Convey to Your Customers?

    Draft a communications plan with answers to:

    1. What are the different target markets that you aim to serve?
    2. What do you want each to believe about your new product?
    3. How does each market prefer to get communications, for example, radio, television,
      postal mail, phone calls, emails or flyers?
    4. So what messages do you want to convey to each and how?
    5. Who will do that and by when?

    There are numerous methods to get the word out.
    Major
    Methods of Advertising and Promotion (Methods of External Communications)

    Do not forget about the power of using social media.
    Social Networking

    Also see
    Bringing
    a Weird Product to Market

    Christopher
    Van Buren: Product Launch Liftoff

    Additional Perspectives on Product
    Development

    Intellectual Discipline in Product Development
    Creating
    a Strategic Product Plan
    New
    Product Development Stages
    Getting
    the Most out of Your Product Development Process
    5
    Insights for Improving Product Development Cycle Success
    The
    Lean Product Lifecycle
    The
    Cycle of Mistrust in New Products
    Reading:
    Overview of the New-Product Development Process
    Measuring
    Product Development Time to Improve the Development Process
    Product
    Development Cycle Fundamentals


    For the Category of Product Development:

    To round out your knowledge of this Library topic, you may
    want to review some related topics, available from the link below.
    Each of the related topics includes free, online resources.

    Also, scan the Recommended Books listed below. They have been
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