A Process for Successful Product Development

By Barton G. Tretheway

Nonprofit organizations increasingly look to non-dues revenue to maintain their financial health, and new products and services present exciting opportunities for revenue as well as strategic growth.  But how does an organization create innovative new products?  Does the process begin with a closed-door brainstorming session? Who should be involved?  

Innovation underpins all successful product development.  Your goal is to create products and services that are new and have value to your members.  This essentially involves addressing the needs of your members—either unsatisfied needs, unmet needs, or unknown needs. To harness the power of innovation, successful organizations adhere to a systematic and analytic process in their product development efforts.  The following stages form a product and service development process designed to be carried out by a dedicated multidisciplinary team with a designated leader.  

Preliminary Stage

Determine your new products blueprint.  This blueprint answers the question, “What do we want new products and services to do for the organization?” Without such a blueprint it becomes difficult to focus the organization’s new product efforts and resources.

Stage 1: Identify the problems or need.  This stage uncovers market-driven opportunities for new products.  It involves conducting member research, such as focus groups, surveys, or interviews, which exposes unanswered needs or demands and ultimately leads to a set of categories for new product idea generation (Stage 2).  In this stage, the product development team also conducts and analyzes research to describe the customer model, which is an overview of consumer behavior in a particular product category.

Stage 2: Ideate and define concepts. Team members brainstorm a comprehensive list of solutions and ideas that target those member needs identified in the first stage.  After applying various screens—member need, strategic fit, revenue threshold, etc.—the team selects a short list of ideas for concept development.  Concept development produces a more detailed description of the idea including key member benefits for each product idea.  Further consumer research and team analysis yield the high-potential concepts, which are then subject to business case documentation including financial forecasts.  

Stage 3: Develop the product.   After  a business case justifies going forward with a particular product or service, the team prepares its design and product/service specifications and details.  Advertising copy and graphics supporting the product are usually started in this stage to expedite the launch.   

Stage 4: Test the product.  A  product prototype should be tested with a sample of members to ensure it adequately solves the problem(s) identified in Stage 1.  The appropriate parties also test the product for environmental and regulatory compliance.  If applicable, patent and other legal issues surrounding the product need to be examined.  Finally, the team validates the product with a full business plan.

Stage 5: Launch the product. Product launch begins with a marketing strategy plan and ends with measurement.  Strategy includes market segmentation and targeting followed by positioning and branding.  The right marketing mix of place, price, promotion, and people supports the strategy.  With the strategy and marketing mix established, the organization can then introduce the product. 

The product development process does not conclude once the product hits the market.  Forward-thinking organizations monitor new product performance with a balance of internal and external metrics.  In turn, it can use these results for product enhancement and future growth. 

What’s Your Innovation IQ?

Find out how new-product savvy you are with our Innovation IQ quiz. Answer “true” or “false” to the following statements.

• Idea generation is the worst way to begin a new product process.
• Marketing staff should never work alone on new product development.
• Return on innovation investment needs to be measured separately.
• New product teams should be compensated differently.
• Failure should be celebrated.
• Senior management commitment is essential for new product success.
• New product teams should be cross-functional.
• A new product process is key to sustaining innovation.
• Members and customers are good about telling you what they do not like—but not as good at telling you what new product ideas they have.

For answers and scoring, click here.