new product development service

 

new product development service 

New products and services are the lifeblood of all businesses. Investing in their development is not an optional extra – it is critical to business growth and profitability.


But undertaking the development process is risky. This requires a lot of planning and organization.


This guide outlines the key stages in the lifecycle of products and services so you know when is the right time for your business to start the development process.


It explains how a planned and step-by-step development process can help you make wise investment and budgeting decisions. It advises you on how to form a development team and manage a project.  new product development service 


  • Life cycle of products and services

  • Developing your ideas

  • Match products and services to market needs

  • The price of your proposed service or product

  • Project Development Process

  • Forming a project team

  • Investment and cost control

  • Manage the development plan

Life cycle of products and services

There are five major stages in the lifecycle of any product or service.


Development

 ​​At this stage your product or service is just an idea. You are investing heavily in research and development.


Introduction – You introduce your product or service. You are spending more on marketing.


Growth

Your product or service is establishing itself. You have few competitors, sales are growing and profit margins are good. Now is the time to work out how you can reduce the cost of delivering a new product.


Closing 

Sales growth is slowing or has stopped. You were able to reduce production and marketing costs, but increased competition drove prices down. Now is a good time to invest in a new product.


Decline 

New and improved products or services are in the market and competition is high. Sales fall and profit margins fall. Increased marketing has little effect on sales and is not cost-effective unless new markets are identified.


Manage the lifecycle


Identifying where products or services are in their life cycle is central to your profitability. Effective research about your markets and competitors will help you do this. See our guide on how to understand your competitors.


By investing in an "extension strategy" you can extend the life cycle of a product or service. You:


Increase your advertising spend

Introduce small innovations – perhaps by adding additional features or updating the design

Finding new markets

But ultimately it delays the decline of the product or service.


Ideally, you should always have new products or services to introduce as others decline so that at least one part of your range shows a peak in sales.


Developing your ideas

There is a lot of risk involved in developing a new product or service. To reduce risks and allocate investments and resources wisely, you should consider several factors:


Does your new product or service meet customer specifications? For example, consider its design, ease of use and performance benefits.

How technically feasible is the product or service? Can you meet design, resource and production requirements?

Are you clear about what you hope to achieve with the new product or service? Does it meet the strategy outlined in your business plan and play to your business strengths?

The clearer you are about your plans, the better you can analyze the risks involved.


The following tips may also be helpful:


Consult your team members about your development plans – they can provide insights you may have overlooked

Get the opinions of suppliers and other business associates – their specialized expertise is invaluable

Test a lot of ideas at the start of a project - it's relatively inexpensive to judge the most promising, but be sure to stop work on ideas that don't meet your criteria before committing enough time and resources.

Ask your best customers what they think of your plans

Consider the regulatory framework within which your new product or service will operate

Don't overlook the environmental impact of your projects

Look beyond the immediate potential of a new product or service and consider the long term



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