Product Development

Related Terms: Prototypes

Product development may be understood generically as all the things that happen from the initial conception or invention of a product to the point when a product is launched into the market. It can also be understood as a method, a discipline, and a formal process followed by a company as it does the same thing. In the modern business literature, the authors typically mean the latter, a "corporate process," and they are typically talking about the undertakings of large corporations in which equally massive teams are involved. As a formalized process with distinct aspects, product development can be disassembled for analysis, discussion, and comment. In actual experience, and especially in the small business environment, product development tends to be many other things; the process is likely to be more creative and hence also chaotic; the activity may be carried by a single individual or a small team. Small businesses rarely have new product managers or departments, and this activity is closer to invention than to engineering and more likely to be led by a charismatic figure—Thomas Edison comes to mind in technical invention or Gabrielle "Coco" Chanel in fashion design.

CONTEXT AND HISTORY

Product development is closely tied to creativity, invention, and insight—and follows the flash of an idea. Thus what we nowadays call a knife was the consequence of some prehistoric human's insight that a flat stone with one sharp edge could cut: the rest was product development.

According to Michael McGrath (in Next Generation Product Development) conscious focus on the development process began late in the 19th century. McGrath divides the time since then into "generations" of product development emphasis. In the first, ending in the 1950s, the focus was on commercialization of inventions; in the second, formalization of product development as a process began, and this emphasis lasted until the 1980s. In the third "generation" of product development, corporate management focused on getting product to market faster. In the 21st century, according to McGrath, emphasis had shifted to R&D-based development.

McGrath, of course, was talking about trends and emphases as taking place in big-corporation culture and as illustrated by waves of products reaching the market—the vast majority of which were modified or adapted products rather than radical inventions. But the most dramatic and revolutionary product introduction of the latter-half of the 20th century did not obey the rules. It was the personal computer, slapped together by an inspired technical man, Steve Wozniak, and sold by a visionary entrepreneur, Steve Jobs. The product was the Apple computer, and the product development process consisted of the two Steves agonizing together in a garage. They didn't even intend to sell computers—just mother boards. They "evolved" the product by trial and error.

The many other inventions that burst on the market as the U.S. and then the world embraced small computers again illustrated (if proof was needed) the unruly nature of the creative process. It cannot be reduced to a recipe, algorithm, or bureaucratic procedure. All types of approaches to product development continue to exist side-by-side. As in gambling, no "system" guarantees success.

BASIC ELEMENTS

Product development is an iterative fusion of different disciplines in order to meet a specific goal. The disciplines are design, engineering, manufacturing, distribution, market positioning, marketing, distribution, and sales. A company developing a product must envision every stage of the process from the final perspective, that of the ultimate buyer, backward, and then from the design forward. Thus the process can readily become repetitive.

For example, initial estimates are made using prototypes; the prototypes are used to envision manufacturing processes and to establish a price range based on estimated production cost. But exposure of the prototypes to customers may elicit suggestions for improvement and negative reactions to features; sometimes suggestions come from dealers or retailers. Market research will often unearth reactions to competing products—or even their unsuspected presence. After this early exposure, flaws must be removed, advantages exploited, competitive challenges met. Redesign, reengineering, and new production estimates may be required. Iteration can also come later as problems are encountered. Some element of the product may be too costly to produce and the problem can only be overcome by changing the product. If the change is substantial enough, talking to customers becomes necessary again.

How much iteration is sensible? The answer depends on the ultimate size of the market and the projected product life. The resources of the company are also an issue. Most small businesses can only afford limited market research. The natural substitute is to consult the intuitive reactions of family and friends—in effect to use a much smaller sample than a global company would.

Product development is typically led by a product manager assisted by a small team representing basic specialties: engineering, manufacturing, marketing, and finance. It is the responsibility of the team to interact effectively with their counterpart in the company in order to obtain services, estimates, and feedback.

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