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What is Product Development and How to Develop a Product [Full Guide] - Smallbusinesstree

What is Product Development and How to Develop a Product [Full Guide]

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 Seeing Business competition that has become increasingly competitive in the digital era like today, business owners must continue to look for fresh ideas to improve the quality of their products. One of the strategies that you need to consider to win this competition is to do product development.

Through product development, you will create new products so that the opportunity to get more customers will be more widely opened. However, in order for the product to meet the desired expectations, there are several steps that you need to do in the product development process.

Here we provide an explanation of what is product development with the stages in it.

What is Product Development? What's the process like?

What is Product Development and How to develop a Product?

Product development is a complete process that is carried out to produce a new product for a customer or market. This process includes several stages starting from generating an idea, gathering information about the needs and wants of a target market, designing a product, and testing it.

A product is considered new when it meets several criteria, such as the following:

  • a completely new product on the market
  • new products for companies that develop them
  • there is a modification to an existing old product

The products referred to above can be in the form of hardware, software, goods, or even services. The purpose of product development is to ensure that new or improved products meet customer needs and help the company achieve its business goals.

Who is involved in Product Development?

In the process of developing a new product, the product manager is responsible for the success or failure of a company’s product. The Product Manager will define the strategy and help build the product roadmap.

However, Product Development requires cooperation and input from various teams within a company. Some of them are:

  • Developer
  • Designer
  • Marketing
  • Sales
  • Finance
  • Testing

Why is Product Development important for the Company?

Product development has an important role in the survival of a company because it can encourage the creation of more new products and product innovations. In the end, this will open up greater opportunities to reach a wider target market so that the benefits obtained can increase.

Besides that product development also needs to be done for several reasons, such as:

  • Provide new value to customers

The first and foremost reason for any product development is to provide new value to customers. This is what can attract customers to continue using your products.

  • Maintain the existence and development of the business

Product development needs to be done because, without an increase, a company will wither and cannot develop. Companies also cannot compete and lose customers if they do not issue new innovations to their products.

  • Providing products that are useful for society

Besides being useful for business, product development will also have a positive impact on society. During the development process, the company or business will carry out various analyzes to find out what are the problems and needs of the community.

By developing new products in accordance with these needs, of course, customers or the public will be helped a lot.

What is Product Development? What's the process like?

How are the Stages of Product Development?

After knowing what product development is, now is the time for you to understand how the process or stages are in it. Currently, there are several popular methods or systems used for product development or new product development. Most of these methods recommend that the product team go through several stages before the company fully invests in product development. These stages include organized an in-depth understanding of customer needs, organized market research, making prototypes, and testing the product being developed.

The following are some examples of common or popular methods used in the product development process.

A. Design Thinking

Design thinking is a method for developing new products by identifying needs or problems from the user’s point of view.

The steps that must be followed in design thinking are:

  • Empathize

At this stage, you must empathize with the users of the product. You must understand what the wants, needs, and goals of users are when using a product or service.

  • Define

The second stage is defined, which is determining the problem. The problem you define should remain focused on the user’s point of view and not from the business point of view.

  • Ideate

Stage 3 is the ideate where you begin to analyze the information that you have obtained to produce a creative and solution idea.

  • Prototype

Next is the process of making a prototype to get a visual picture of the ideas obtained.

  • Test

The fifth stage is testing or testing. This stage is needed to find out which development ideas I have succeeded in and to detect if there are errors in the products being developed.

What is Product Development? What's the process like?

B. New Product Development (NPD)

New Product Development or NPD is the process of developing a product from a concept to a product available in the market. The stages in New Product Development are as follows:

  • Idea generation

At this stage, you have to collect ideas that are useful in product development both from the internal team side and from the external side, namely from the customer.

  • Screening ideas

The second stage is the process of filtering the ideas that you have come up with. At this stage you must also be able to prioritize which ideas are best for making the product.

  • Concept development & testing

After you filter the best ideas, the next step is to turn the idea into a concept.

  • Market strategy and business analysis

Market strategy or marketing strategy is about devising ways to reach your target audience. Meanwhile, business analysis is done to help you decide whether the new product development effort is worth the cost. That way you will find out whether this development process has the potential to generate profits or not.

  • Technical product design and development

After the product development idea is implemented, the market strategy is documented, and the business analysis is completed, the next step is to develop the product.

  • Market testing

The next stage in this NPD is market testing. This market testing strategy can be done in two ways, namely:

Alpha testing is market testing that is carried out within the developer environment. The tester will make sure that the product can function properly.

Beta testing: performed by end-users or product target customers. In beta testing, it is hoped that the company will get more feedback from users to improve product quality.

  • Commercialization

Commercialization is the process by which a product enters the market. When launching a new product, you need to continue with a marketing strategy so that the product can be successful in the market.

C. Fuzzy Front End (FFE)

Fuzzy Front End (FFE) is used to determine what steps to follow in the product development process. This FFE is also often called an ideation step because it is considered a way to encourage innovation in a company.

This method is not often mapped out in a formal way because it is the phase where you can convey all the ideas to provide a solution to your customer’s problem. Broadly speaking, here are the stages in it:

  • Set innovation goals

This stage could be your opportunity to find out what problems need to be resolved for your customer through developing your product.

  • Find out what your customers think

Products that customers don’t need will not be successful in the marketplace. Therefore do market research to find out if the idea is feasible or not.

  • Review market segments

You should also review the market size and conduct a segmentation analysis of the products you develop.

  • Make a prototype

The next stage is making a prototype or mockup of your product design.

  • Product development

The next stage is the process of developing your product. At this stage, you have to plan how the product will be developed, as well as ensure that the product concept has business value.


So what is product development? Product development is the process of turning an idea into an innovative product that can be realized and used. Even though the process is quite long, this product development can help businesses stay ahead of their competitors. By generating fresh ideas, businesses can maintain customer loyalty and even open up opportunities to acquire new customers. By understanding what product development is, you can find out why product development is needed by all businesses in various fields.