New Product (Service) Development
New Product (Service) Development
Developing new products or services tends to be a “no brainer” from a strategic perspective when thinking of strategies for growth-oriented firms. It is amazing, however, how many of us talk of new product or service plans, but simply end up creating mere quality tweaks or improvements or line extensions. New product or service development is hard work; it requires innovation, investment, market knowledge and timing, and above all, planning. So, although it is a near sure-fire way to drive growth, the number of firms beyond the startup phase that actually employ programmatic, new product or service development strategies is in the minority. Tech companies, of course, tend to be the exception. The fast-moving, highly competitive environment of high-tech demands growth. The very nature of that industry, given short product lifecycles and early obsolescence of technologies basically drives companies to have a varied and deep new product development pipeline.
There are several key factors to ensuring effectiveness and success in new product development programs:
Time the market – choose an influential industry event or key time-frame within the annual business cycle to release or introduce new products. For consumer electronics for example, this event may be the annual Consumer Electronics Show (CES) held every January in Las Vegas.
Find a niche and fill it.
Ideate new products or services that add value and test market the value-add notion – make sure to involve your sales team as well as your key customers or clients. Field test a minimum viable (or prototype) product or service and use the feedback of select clients to ensure the new product or service includes the features your clients truly need, value and expect.
Create a development plan around each new product or service and stick to the development time-line. Time is money, so the more your development efforts veer from the time-line, the higher probability you have of missing key market timing. Also, the more the time-line drifts, the harder development teams must work to drive to a product/service release date or milestone, and this hurried development can lead to careless and costly mistakes.
Make sure all stakeholders (employees, development/R&D team, marketing and sales teams, leadership) are on-board with the plan(s) and have plan visibility.
Get quality and pricing right – the market can be absolutely ruthless and unforgiving in the face of mistakes. If you make cost/pricing mistakes the market will typically not reward you by allowing you to increase price without a corresponding reduction in demand. Likewise, if your team makes a quality mistake, the market will recognize it relatively quickly and given our world of real-time communications via social media, a simple quality issue could result in a long-term negative impact to your company and brand(s).
Develop and execute a marketing launch plan for each new product or service.
Conduct ongoing feasibility analyses and make improvements when and where appropriate.
New product/service development is a direct result of a company’s internal ability to create and innovate. When creativity is channeled and organized properly a product/service development program is the strategy through which creativity can be monetized, drive value, and ultimately ensure firm growth.
Stay tuned for the next article in this organic growth series, in which we will delve into product or service improvements as another strategy to help drive growth.