The Seven-Step Development Process is described in the sections that follow. In brief, the seven-steps of the development process are: Product Ideas, Screening, Concept Testing, Business Analysis, Prototype Development, Product Testing and Test Marketing, Commercialization.

Product Ideas

The new product development starts with an idea. Ideas can come from many sources. They can come from the entrepreneur themselves, or from existing customers (of an existing business), from suppliers, support staff, sales force and special divisions (Research and Development).

Existing companies can do well to listen to the support staff. Support staff deal with customer complaints every day. In many cases customer complaints will express a need that isn’t being met. A new design could keep existing customers, or even bring in new ones. An existing customer has monetary investment to see change. This makes their view more impactful to the business. If a customer feels that they would benefit from a new concept in the business, it should be considered, as they have invested money into the business.

Through their interaction with potential customers, sales staff will also get new business ideas. Keep in mind that a potential customer, is just that, potential. As they have no monetary investment, to see changes or new development, their ideas may be off the companies targeted goals. However, the sales staff often have insights on how to reach new customers. Those insights could turn into new product ideas.

Dedicated teams, such as Research and Development, are another method for product ideas.

Screening

Not all ideas that come through the first stage (Product Ideas) will be useful for a company. Consider a company whose business is in human relationships. An idea may surface through a customer, or sales team, to add a new feature to the mobile app the company sells to its customers. For argument sake, consider that this new idea is to share one’s GPS coordinates with other matched candidates.

While that idea might work as a feature in some dating systems, this company have a strong commitment to customer safety. As such, the idea may diverge from the stated goals of the company.

This is the stage where new development ideas are filtered out, against the companies stated goals and ideals.

Concept Testing

Ideas that remain viable, after screening, are given to customers to customers (or potential customers) for their input. Companies may also use public data on similar concept testing by other companies. Results are examined for viability.

Business Analysis

Using the results from concept testing, the marketing team will analyze the profitability of the idea. To frame development of the idea, they consider the costs involved in the production of the idea, as well as the projected benefit in sales.

If a car company had an idea for an enhanced gearbox, for their sports car line, and after screening and concept testing, it would be analyzed for profitability. Perhaps this car company would struggle with the new design, as such the costs might be incredibly high. It might be a good idea, and it could bring in some new customers, but the cost of development and installation might raise the sports line to a cost outside the measure of central tendency (Mean, Median, Mode) for customer purchasing power. In other words, it might be too expensive for the average customer, lowering sales over all.

Prototype Development

My oldest brother works in a business that creates farming equipment. At one time they were developing tractors. Many don’t know it, but tractors are very expensive. There are even “fancy tractors.” As farmers have considerable investment income, they are often willing to pay up to half a million for a single tractor. The cabs can be outfitted with satellite TV, air conditioning, and a plethora of options.

Consider an idea reaches the prototype phase. It may require a change ot the dashboard of the tractor cab and even to the cab itself. These new ideas are prototyped. In an industry with physical product, the prototyping can be expensive. It may require some CAD/Solid Works design to conceptualize the new feature.

The 3-D design (in a fabrication industry) is built out into a physical model. Building a real object from a 3D model can initially be done at small scale through 3D printing. However, a full scale prototype will need to be developed in order to flush out any issues with the design. This will require a team to design, export the design (blueprints), and build (welders, woodworkers, fabrication teams).

Through a process of issue resolution, a prototype is developed that is doable.

Limited Production

Instead of jumping into full production, it’s wise to begin slowly. Identifying the successes and failures in the prototype created, the development and design teams work to create limited production of the new product.

This is more key in an industry where mistakes are not easily backed out (such as manufacturing). For software industries, where one can easily resolve a mistake at any time (even in production), this step may be skipped by some teams.

New challenges will present themselves at this stage. While the prototype was flushed out, making multiple products through a production cycle will no doubt find new issues.

Some of these challenges are discussed in “Visionary Manufacturing Challenges of 2020,” Chapter 4:

  • concurrent manufacturing1
  • integrating human and technical resources2
  • making effective decisions3
  • reduce production waste4
  • willingness to change rapidly5
  • improve development process to lower dimensional scale6

Test marketing is also an aspect of this stage. Customer reaction is valued and considered in the production process.

Commercialization

Depending on the results of limited production, scaling up or down will result. For scaling up to full commercialization of the new product, promotional and distribution channels will be developed. Because of this, this final stage can be quite expensive.7

References

  1. https://www.nap.edu/read/6314/chapter/4
  2. ibid.
  3. ibid.
  4. ibid.
  5. ibid.
  6. ibid.
  7. Ebert and Griffin, “Business Essentials”
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