Product development in business refers to the entire procedure of bringing a product into the market, reviving an existing product, or introducing a new product into a previously unknown market. A key aspect of PD is product testing, and various business-related business considerations. The term was first used in business software development, but it has since become one of the most broad categories in technical writing. As such, there are a number of subcategories, including Business Process Improvement (BPI), which focuses on identifying and correcting deficiencies in current processes; Lean Manufacturing, which aims to eliminate waste; and Competitive Product Development (CPD), which considers how a firm can respond to competition by improving its processes and structure. These are just some of the subcategories of product development that can be broadly categorized, as shown in the table below.
The core components of product development include defining customer needs and determining what those needs actually are. PD includes defining and understanding customer needs and understanding the business impact that those needs have on competitors and the existing market and then exploiting those competitive factors to improve the products’ performance in the market. In addition, PD includes streamlining existing processes, as well as designing and implementing new ones. For example, a major part of PD involves determining which processes need to be modified, and what processes need to be replaced, in order to bring the innovations into the market faster.
Lean and Six Sigma development tools are used extensively in product management and PD. Lean programs require project managers and supervisors to use the balanced scorecard approach to determine who is responsible for getting a particular project completed. Project managers and supervisors then use the results of this analysis to reduce cost, increase the value of the final product, and make improvements to the overall quality and efficiency of the project management process.
Lean requires that product developers are highly disciplined in improving the quality of the end product, as well as in reducing cost. A major part of this is done by eliminating waste, but there is still some product development waste, such as deciding to use a lower quality software instead of a higher quality one. This can result in increased costs, delayed product delivery dates, and less than optimal marketing managers and sales representatives’ involvement in the product development process. These problems can be solved by recruiting the best, most qualified and motivated product development team members from within the organization itself, or by engaging outside the organization with marketing managers and sales representatives on the same project.
Marketing managers and sales representatives to view the product development process not only as an investment in the future, but also as a way to increase their own revenues. Expenses can be minimized by using new chemical compounds, improving manufacturing processes, and using other innovative ways to create new product flavors. The sales representatives can make presentations, provide samples, show off what they’ve done to date, and give information on how the new chemical compounds can change customer perceptions and behavior patterns. During these presentations, the product development managers can discuss the marketing and selling advantages of the new chemical compounds, how the sales benefits will be seen by new customer segments, and how the marketing and selling messages will resonate with these new customer groups. Sometimes, product development managers may use PowerPoint slides with colored text on them to highlight some of the marketing and selling benefits.
When companies do not have the time or expertise to solicit new product ideas themselves, they often turn to the product development departments of large organizations to solicit their product development ideas. This can be expensive because it takes time for the marketing team and management team to analyze the market, the costs of implementing the new product, and the potential return on their investment. Some companies choose to work with several different companies, or may work with only one company on a small project.