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7 Key Stages Of New Product Development Process (+ Examples)

“Everyone thinks they can create new products, but in actual fact few people do,” my first manager wisely informed me about new product development. 

Looking to build a new product?  Then the reliable new product development process I outline below will increase your odds of success.  

Fast forward to twenty years of my building new products in three different markets: what I have seen repeatedly are product managers who present new product ideas that aren’t a strategic fit for their product line or organization. I made the same mistake.   

One failed new product idea I spearheaded was a product that helped engineers learn how to apply standards. Our customers needed this; they were well-funded and willing to pay for it; and there was ample, compelling customer and market research in support of the idea.

And yet, this new idea died several deaths. Nonetheless, a foolhardy product manager (me) resurrected it multiple times. This new product idea finally expired forever and almost took me with it.

The new product idea did not fit with the strategic direction of the organization’s new product development. Best to accept this and move on. Do not attempt to raise a product idea from the dead!  It does neither your company nor your career any favors.

Below are the seven key stages in any new product development process, but keep in mind that new product development is not a linear process. You will go through these phases, multiple times, while building a new product. I also included some product development process examples to help guide you.    

1. Customer Research

Get To Know Your Customers

Most new product development processes tell product managers to start with brainstorming.

Sitting in a Zoom room dreaming about new product ideas is super fun but futile. Product managers need to start with their customer needs.

As a product manager, your job requires the same understanding of your customers that an anthropologist has of her subjects. You need to know what irks them, what they don’t have, what they have that they don’t like, and how they behave.

Example Of Customer Research

When I studied my customers (librarians) in their native habitat, I uncovered their frustrations. 

For example, until the 2000s microfilm preserved and displayed old newspapers. The microfilm reader—a hulking monstrosity invariably broken—lived in the basement. Genealogists, historians, and social scientists hated using microfilm and loudly complained about the impossibility of searching newspapers, and made their displeasure loudly known to the helpless librarians.

Librarians live to help their patrons. Their patrons’ irritation and the librarians’ ensuing frustration took the form of a question: wasn’t there a way to make newspapers more easily searchable? 

Through the new product development stages below that question resulted in a series of new products that made historical newspapers searchable.

There are proven methods to do thorough customer research and to understand customer needs, both qualitative and quantitative. Here’s a piece covering how to create a customer feedback loop to get you started.

3. Ideation 

How to brainstorm the right way

Once you have that customer problem and you understand all aspects of it, then you want to start idea generation or ideation. According to IDEO,  ideation is brainstorming with your colleagues and customers with the goal of answering ‘how might we”.

Example Of How To Do Ideation

You’ll want to choose the participants in any ideation session with care.

Nothing dampens the mood more than a naysayer. Select individuals who are zany, creative, and open-minded. One of my best product managers would schedule a day and provide a brief summarizing the customer, market, and problem but no solution.

I walked past the ideation room, peering in to observe marketing managers, engineers and customers jumping up and down to scribble on a whiteboard and waving half-eaten cookies.

Involving stakeholders from inside the organization ensures strategic fit; involving potential customers seeds the market.

After the ideation session, this product manager examined all the ideas and distilled them into two or three concepts she could prototype. For tips on how to create prototypes easily and for free, read this article.

3. The Prototype Process

Cupcake and then cupcake again

New product development is not a linear process. Once you have a simple prototype—a cupcake vs a whole cake—you’ll show it to customers.  

During your customer research, these same customers said they wanted exactly what you created. But now, they will turn up their noses. This is normal.

Example of Prototyping

The bigger the irritation for your customers, the more likely they will be to hate your first cupcake. 

I once built seven different prototypes in this stage for a new, low-cost product. It was classic Goldilocks: too little functionality, too much functionality to be low-cost, too hard-to-use, too easy-to-use and so on, until I found just the right mix. Persevere.

Make your cupcake with your designers, keeping marketing engaged and your engineers on hand: remember to bring everyone along. 

Along the way, cultivate mini evangelists. To understand how useful evangelizing about your product concept can be both internally and externally, read this Harvard Business Review article.

4. Concept Development

Check all the ingredients

At this stage, your customers are excited about the prototype. Your colleagues feel a sense of ownership. This is the time to do a strategic fit check-in before you go too far. 

Examples of a Concept

Write a concept paper—or whatever your organization calls it—that outlines your product vision, including the following:

  • The vision
  • The customer problem you are solving
  • The target market, market size and your market research
  • Pricing
  • The product launch plan (including a marketing test)
  • A P&L (however rough but all executives want estimated costs and revenue)
  • What product investment you need to move to the next step
  • What you don’t yet know (be honest and have a plan to find out)

For tips on how to write a compelling vision and strategy, I recommend you read Five Crucial Parts of a Product Development Strategy.  

Present the concept paper to the decision makers in your company. Hopefully, your company has an established new product development process to review new product ideas. If it doesn’t then this is your chance to show initiative and/or possibly look for a product manager job in a company that does have an established investment process.

Be compelling, concise, and clear. Listen carefully to the feedback. This is a key check-in. 

Example of When Concepts Fail

If the decision-makers don’t see a strategic fit, it may be time to cease and desist. One of my product managers, Bill, was tenacious in the extreme, presenting different versions of the same new product idea in the product review meetings.

Bill’s product was shot down every time: there simply wasn’t a fit.

You may need to refine your product idea. You may need to do more business analysis and market research. You may need to do more idea generation or another prototype.

In 75% of organizations, you will then proceed to a full-blown business case in which you will describe everything above but in far more detail. You’ll also need to answer any open questions.

At this stage, you will ask for the investment to build this product. Ask for enough investment. New products always cost more and take longer than you think. 

5. Building A New Product

Time to bake the cake

The Chief Product Officer approves your concept paper or business case. Now you start to build the product, using Agile methodology.

Engineering (including UX), quality assurance, marketing and your customers will all be critical in this stage.  

If you were able to involve engineers and designers early in the process, then the development team will understand your product vision. As a result, everything will go much more smoothly despite the inevitable delays and compromises. Collaborating well with engineers requires finesse and precision.

Example of What To Do and Not Do During the Product Build 

Having at times overestimated my ability to convey a product concept to the engineers, my products emerged looking nothing like what my customers needed. Agile enables you to catch a mismatch before these have progressed too far.  Agile also allows for creative solutions no one imagined in the product concept phase.

In the headlong rush to market, we often sacrifice quality assurance time to launch products sooner. When you are trying to convince customers to make a change—always a risk—nothing undermines their confidence more than a bug.

In one particularly critical product launch, I embedded customers into our engineering process to provide instantaneous feedback on a complex new product.  Marketing and product chose customers based on their size and ability to influence the rest of the market as we knew they were likely to be early adopters. 

Keep marketing involved and active, so they are thinking about the marketing strategy as the team moves through the new product development stages. They are about to become the lynchpin. 

6. Go-To-Market And Product Launch

Marketing is your co-chef

Ideally, the market seeding with potential customers began in Stage One, and now is the time for the marketing manager to unfurl the full marketing strategy. The product launch is critical. According to this Harvard Business Review article, it is also frequently bungled. 

As a product manager, you will want to be actively involved with the first customers to ensure everything goes smoothly. Sometimes the marketing tests are misleading, and you will have to adjust your marketing message. Here’s a great article to help you understand more about the role of marketing in product development.

Remember to have a Plan B if everything goes wrong. 

Example Of A Difficult Product Launch 

I once built an online learning product in conjunction with a third party. We did minimal quality assurance. Glitches riddled this product. The product also had an exceptionally poor user interface. It was painful to move customers back to their original version but infinitely preferable to losing their business altogether. Fortunately, it was an option.

Also, be certain to have a Plan A+ if the final product exceeds all expectations, so you are not struggling to meet insatiable demand. You never know.

7. Ongoing Enhancements And New Features

Your work is never done

Imagine you are celebrating the most successful product launch in your company’s history. Enjoy the moment but know that new customers, and old ones, will demand new features. That is why Apple rolls out a new iPhone every year or so.

Strategic Fit In New Product Development

To ensure strategic fit you will have brought the organization along with you on the new product development journey. At every stop along the way, remember to evangelize, explain, and elucidate the strategic fit.

By Marta Lee-Perriard

Marta Lee-Perriard, Ph.D., has twenty years of experience in product management, most recently as VP of Product. She advises executives in Fortune 500 companies with a focus on women in product.

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