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What is Product Development? How Retail Brands Dominate the Process

Product development can be fun, exciting, terrifying, and immensely challenging. Sometimes, all at the same time.

Whether you’re a new startup or a Fortune 500 company, product development is one of the most important steps toward a successful and prosperous business. Shoppers won’t come without the right product, and all else falls apart after that.

How can you simplify and take control of this process? Start by understanding what it is.

What is Product Development?

The product development process has multiple steps. In general, new product development includes:

  • Market analysis: Understand the market. Identify a need to fill and research similar products or companies. Complete a SWOT analysis if possible.
  • Product brainstorming: Do a rough sketch of the product idea. Map out what it could look like and how it will be designed.
  • Planning the product roadmap: Clearly plan out the stages of product development. Draft a roadmap that outlines every step from start to finish, including the key stakeholders.
  • Creating the product: Now you can finally build the actual product. Usually, this is a simple first version, the baseline of what is needed to go to market.
  • Testing and Iteration: With a V1 prototype created, you can test it with your target audience. Get as much feedback as possible and then rework the product for future versions.

Product development includes the creation of a new product and its release into the market.

Who is Involved in Product Development?

The above list is a simplified version of the new product development process. Unless you’re a dedicated entrepreneur (you got this!) you likely have a team of professionals who may be involved with one or more of the stages of development.

Who are they? Basically, every department in your company. Many of the stages of new product innovation will be overseen by product managers, but you’ll also work closely with the marketing team to develop a go-to-market strategy. The sales department will also be a major player, as they’ll have to sell this product once it goes live.

Other teams involved are quality assurance, operations, design, manufacturing, fulfillment, and more.

The most important part of any good development team is your pricing experts. What’s the best price for your new product? How do competitor prices compare for similar items? Do you need or want a minimum advertised price policy for this product? How will your chosen price affect sales and consumer sentiment? These questions can be answered by pricing professionals.

“For new product introductions, we would work from cradle to grave,” a home appliance manufacturer told Wiser. “At the inception, the pricing team would say ‘we need it to be this retail price and we need to make this margin on it.’ We would tell them what their target cost needed to be.”

Product developers working around a laptop in office.

Metrics that Support Product Development

The product development teams provide a few hints about which metrics you should look at closely during this process.

The big ones are:

  • Transaction data
  • Market share
  • Census data
  • Competitor data
  • Customer intelligence
  • Trend analysis
  • Promotional data
  • Consumer insights
  • and more!

Using pricing as an example, this team will use competitive pricing data to determine the best price for your new product. This should happen as early as possible in the development cycle because the price of the product will affect manufacturing costs. Too much money spent in manufacturing compared to the final price will lead to small to even no margins.

Your competitors will provide good ideas for your product team at this stage. How they price products will be very useful data, but beyond that, competitors can also highlight sales trends to segment similar products by attributes such as color or fabric. This can highlight a winning strategy and provide good insight into what type of product is likely to perform well.

Say you’re developing a new backpack. You have two competitor backpacks, each a different size. Which one performs better? This could be the size you need to target for your own backpack.

How to Succeed at Product Development

Product development has many stages. As we mentioned, there’s innovation, testing, marketing, and many other steps.

Here are a few tips to succeed at new product development:

1. Communicate Clearly

With all the people involved and moving parts, it’s crucial that your communication is on point during this process. Make sure everyone involved knows exactly what they should be doing and their next steps.

“Since we controlled the data, we would work with the merchandising group very closely,” the home appliance manufacturer added. “If they said they had a type of refrigerator coming out with certain types of features, we could tell from the competitive set where it should be.”

2. Trust the Data

Data is going to be invaluable as you develop new products. Trust it! Get high-quality data and use it for every decision. This will not only help with product management—it’s hard to argue against accurate data—but it will also illuminate the path forward.

“The upstream marketing team that developed our products would use competitive pricing information as they were building out their product lines to ensure that they were building a line that was competitive from a price value standpoint in the marketplace,” a leading toy manufacturer explained to Wiser. “Or, if they were entering a new category, they would use this to understand the category norms and what acceptable price points were for a particular category.”

You have to listen any time you get a chance to hear customer feedback, even if it goes against your expectations.

3. Listen to Potential Customers

You have to listen any time you get a chance to hear customer feedback, even if it goes against your expectations. They are the end-users, after all. Look into third-party services that connect you to customers, if you can’t solicit feedback directly.

“There are a lot of pieces but really it’s just understanding what the market is, where the opportunities are, and what your consumers want and trying to create something that fulfills that need for them,” according to a packaged foods company.

4. Think Like a Retailer

Eventually, your product will be sold in stores or online. How will it look on the (virtual) shelf? Will it be a good product for retailers? Will consumers love the look and feel of the packaging? It helps to think like a retailer to consider these factors.

“What are things you can do from the supplier standpoint to help the retailer as far as retail-ready packaging? A lot of times there’s not someone in the aisle that’s going to be there to give them that information,” the packaged foods company noted. “How do you use your product to educate, how do you use your packaging or product to make sure that it’s on the shelf and make it easier for the retailers to keep it on the shelf?”

Product development is a long process, from the first concept through testing, implementation, and iteration. The good news is that you can take control of new product development with the support of high-quality data.

Matt Ellsworth

Matt is the Content Marketing Manager at Wiser, the leading provider of actionable data for better decisions. He holds a BA from Salem State University.

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