Which of the following would be a key success factor in developing new products?

Google—ranked the world’s second-biggest brand with a value of $207.5 billion. Pretty successful, right? Definitely, but not always. Google is part of the fabric of our daily lives, but it has also suffered some huge flops due to poor product design and development. 

Remember the Google Nexus? No? Well, not many people do—and it’s probably something that Google would like to forget. Despite wingsuited skydivers flying into the Google developer conference in 2021, the titan of tech couldn’t make up for the failure of its expensive new gadget: the Nexus Q.  

This product was kindly given to, then promptly forgotten by, everyone in attendance at the event. It was a terrible media streamer that couldn’t play anything from non-Google services, and videos didn’t load properly. Technology journalist, David Pogue, told his readers that, after using one, “It won’t take you long to join the chorus of critics who’ve tried out the Q and had the same reaction: “What the — ?” 

Google, however, learnt from its mistakes and then released the far simpler Chromecast. In this blog, we will explore what product development is, how to avoid making mistakes, and what you can do to make sure your product doesn’t flop like the Nexus Q.

The new product development process

The concept of new product development involves the complete process of designing an original product and bringing it to market. There are three general perspectives involved in this process:

1. The business development perspective, which involves market research and marketing analysis.
2. The company perspective, which involves idea generation.
3. The product development perspective, which involves product design and detail engineering.

What is the first flow of the new product development process?

The following flow involves five steps based on the design thinking philosophy. Products are conceptualised based on first identifying the user’s problems.

Step 1: Understand your customers

Step 2: Define the problem

Step 3: Brainstorm potential solutions

Step 4: Build a prototype

Step 5: Test your solution

The new product development framework

There are variations of the new product development framework. Some companies opt for a five-step approach, but here’s a more comprehensive eight-step suggestion. For an in-depth guide to the eight-step process, read this blog.

Step 1: Idea generation

Step 2: Idea screening

Step 3: Concept development and testing

Step 4: Marketing and strategy development

Step 5: Business analysis

Step 6: Technical implementation (part of the design process)

Step 7: Test marketing

Step 8: Commercialisation

How to approach product creation

During the ideation phase, teams should be encouraged to be as creative as possible—there are no stupid ideas, only ideas. However, that doesn’t mean that every idea should be taken on to the next stage. After much planning, there will only be a few winners.

Ideas should not be considered in isolation. When considering products, think about your company’s portfolio as a whole. Your portfolio should include only a few high-risk products as well as some obvious products that have a low payoff. 

What are the seven reasons that new products fail?

1. Bad Timing

First and foremost, for a product to be successful, it needs to be introduced to the market at the right time. Generally, the best time to launch is as soon as your product is ready. However, there are exceptions—think holiday seasons.

2. Too little market attractiveness 

The term market attractiveness uses different factors to determine whether or not a market might be a profitable one for your product. These factors include short- and long-term profit, growth rate of market, value of current products to market members, cost of entry into market, and competition within market.

Too little market attractiveness could also refer to a product that satisfies a need that too few customers have.

3. Poor execution of the marketing mix

Once you have identified the target market and your competitive advantage, you are ready to create your marketing mix, based on the 5 Ps:

Product, Price, Promotion, Place, and People

Every target market requires a unique marketing mix to satisfy the needs of the target customers and meet the firm’s goals. You must construct a strategy for each of the 5 Ps, and then you need to find a way of combining each of the five elements. 

For example, a great product with an unsuitable price is doomed to failure. Good marketing requires a delicate balance. 

4. No access to buyers

No buyers = no sales

5. Insignificant point of difference (no real USPs)

Your product won’t be successful unless it is better than what is already on the market. It will probably fail if you can’t clearly show customers a unique selling point—about either your company or your product—that makes them sit up and take notice.

6. Insensitivity to customer needs

As a product designer, you need to be asking yourself what customers need. As a great product designer, you must understand how customers evaluate your products to see whether they will satisfy their needs. No matter how good the quality of your product is, people won’t buy it if they don’t think they need it.

Understanding customer needs is a prerequisite to a successful product as this information will make it clear that customers think buying from you is the right thing to do. Here are five things you should consider to get a better understanding of customer needs:

1. Do customer research
2. Put yourself in their shoes
3. Ask for customer feedback
4. Use social media to your advantage
5. Get the most out of your CRM system

7. Wishful thinking

Unfortunately, believing or hoping something will happen is not going to make it a reality. Making important decisions blindly without being guided by data is wishful thinking. It seems obvious, but so many companies are guilty of simply believing in something rather than basing their decisions on facts. And the problem can exist anywhere in a company, from strategy to operations. 

It’s also helpful to be aware of potential biases that may cloud your judgment. For example, an overconfidence bias means people are overly optimistic about how right they are. An anchoring bias is the inclination to fixate on initial information when making a decision. And a representative bias happens when a decision-maker incorrectly compares two situations because of a similarity they focus too much on.

Bonus reason: poor product quality 

Think Google’s Nexus Q. A poor quality product will not last on the market. 

7 keys to new product development success

1. A unique, superior, differentiated product 

Having a differentiated product that is unique from the competition’s is a marketing strategy designed to draw attention to your products and company. To successfully differentiate your product, you must identify and communicate its unique qualities and highlight the differences between your product and the competition’s. This works effectively if you also develop a strong value proposition, so your product appeals to your target market.

You should also think of your brand as a product and do the same for your company.

If you differentiate your product successfully, it will give you a competitive advantage and build brand awareness. Tesla is an excellent example of a differentiated product—it addresses the car from an electrical engineering rather than a mechanical engineering perspective. 

2. A market-driven, customer-focused new product creation process

A market-driven, customer-focused new product creation process will be at the epicentre of a company led by market trends and customer needs instead of its own productive capacity or current products.

The company will determine their corporate strategy based on market research. It will always put the customer first, be aware of the competition, and understand the market.

3. More pre-development work before development gets underway

The house-building analogy is commonly used in product development. To emphasise a strong base, people often refer to laying solid foundations. This is all very well, apart from the fact that the foundations are not the beginning of the process. Before you start digging foundations, pre-development decisions need to be made.

• What product, exactly, do you want to build?
• What is the sequence of actions you must undertake to build the product?

Answer these questions thinking about what the future of your product will look like. Before the first brick has been laid, consider the product’s architecture, design, and how it works. Also, note the strategic moments throughout the development process to which you must pay important attention. This will allow your project to progress smoothly without high-cost mistakes.

4. Sharp and early product definition

It’s essential that the project team define the product before it progresses into the development stage. Key considerations when defining the product include:

• Target market: who is the product is aimed at?
• Product concept: what the product will be and do?
• Benefits the product for the customer: what value will it add to their lives?
• Positioning strategy: think about competitive products and target price
• Product requirements: including features and high-level specifications

5. The right organisational structure

Organisational structure plays a lead role in determining a company’s culture, values, and success. It is at the heart of making an organisation run smoothly and is possibly the most crucial element in company success.

When a company gets it right and implements the right structure, it is bound to meet essential targets and see key results. Employees can also feel organisational structure; when the balance is right, the workplace will be cohesive—and this is when great products are made.  

6. Speed is everything! But not at the expense of quality 

Forget slow and steady wins the race—speed is everything. In most cases, first-off-the-line wins the race. However, there is an argument that the second product to market has the edge as it can learn from the mistakes of whoever got there first. Despite this, the pioneer usually gets the upper hand. 

Their average success rate is around 70%, and, generally, first-in-the-market products are more profitable. 

That being said, a mad rush to develop the product and get it to market by no means guarantees success. Speeding through product development, making shortcuts and taking decisions too quickly is a surefire way of creating a disastrous product. Taking a little longer with a systematic and quality approach to development, without cutting corners, will ensure things turn out the way they should. 

Focus on sustainable ways of accelerating products by gathering all the information you need to get the launch right the first time.

7. Companies that follow multistage, disciplined new-product game plans fare much better

Many companies use a Stage-Gate system for their product process. A Stage-Gate System is a road map to move a new-product project from the idea to the launch stage. 

A Stage-Gate system divides the effort into distinct stages that are separated by gates—management decision gates. Teams have to complete cross-functional activities in each stage before being allowed to move on to the next stage of product development.

At the end of each stage, there is a critical moment when the team decides whether to continue with the project or kill it. This constant reflection helps to make the product development process as efficient as possible and to stop any sub-standard products from slipping through the net. 

Today, almost every top-performing company uses a stage-gate system as part of its new product development process. The benefits of using this system include advanced teamwork, less product reworking, improved success rates, earlier detection of failures, better product launches, and shorter cycle times.

Conclusion 

New product development is the first stage in generating and commercialising new products. It allows the fastest completion of a product and lowers the introduction costs. Following the seven keys to new product development will assure reduced risk, shorter time to market, lower introduction costs, and an overall more functional, higher quality product. The method helps to:

• Enhance the integration of product and process design with strategic objectives 
• Improve organisational effectiveness 
• Provide a framework for effectively implementing design technology

Developing a product is a complex process. Everyone could use some help from the right partner. Teaming up with an EMS that has strong in-house design and manufacturing capabilities will allow you to focus on initial concepts, price points, and sales. It will leave you free from the day-to-day hassle of trying to make sketches come to life and then turning them into tangible products your customers want to buy.

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