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Product Development Process: The 7 Stages Explained (with examples)

19th Feb, 2024
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    Product Development Process: The 7 Stages Explained (with examples)

    The product development process is just as vital as product management; both seem similar but have subtle variances. Product development focuses on the creation of a product, whereas The entire process is overseen by product management. The agile methodology makes the job easy for managers in the process of building a product, so it is important for budding product development professionals to learn necessary skills in the best Agile Management Courses for beginners. 

    A physical product, software, or service-oriented product can all be developed within the product development process. Let us examine the new product development process with examples and the best practices for the phases of product development. 

    What Is the Product Development Process?

    The complete process of activities in creating a new product or bringing a redesigned version of an existing one to market is known as the product development process. The process of developing a new product and bringing it to market is referred to as the New Product Development Process (NPD). Anywhere, including the market, client needs, research, or problems with existing products, might inspire the creation of a new product. There are several phases in the generic product development process that must be completed in order to generate such new products, from the concept stage to the point at which they are sold on the market. 

    In addition to the above-listed factors, industries continually develop their current product lines while developing new items based on emerging technologies. Nearly every industrial product in the world is relevant to the study of the product development process, hence many industries suggest KnowledgeHut best Agile Management Courses for beginners in their employees. It involves seven product development process steps. Each stage will be covered in more depth below and let's explain the process of new product development. 

    The 7 Stages of Product Development Process

    Many different stages have been described in the product development process.  Let's take a closer look at the 7 stages of new product development process.

    The 7 Stages of Product Development Process

    Stage 1: Ideation or Idea Generating

    The first step in the new product development process is ideation or idea generation. Customer needs serve as the foundation for developing ideas. Companies or enterprises do market research on client requirements, technological adaptability, competitive products, new designs, and problems with existing items. Ideation progresses through several stages, beginning with innovation and ending with actualization.  

    There are various popular approaches to idea generation. In this step, let us look at different ways. 

    • Brainstorming 

    When a group of individuals or a single team brainstorms, they produce many ideas without evaluating the outcomes. Everyone will have an opportunity to express themselves here, and there is a possibility to come up with innovative ideas. The complete list of ideas will be examined to see which ones are the finest. 

    • Bodystorming 

    Bodystorming is a method for coming up with several solutions to a single issue that involves simulating numerous movements with the body. Role-playing and mind maps are utilized in conjunction with body-storming. 

    • Reverse Brainstorming 

    It is a special ideation approach because, as the name implies, it generates ideas for a problem in the opposite direction. Every team will plan or come up with ideas to get over obstacles when creating a product, but using reverse brainstorming, one may find the issue at its core and determine why the risk was raised in the first place. 

    • Idea mapping 

    The ideas developed during the brainstorming phase are transformed into maps using graphical designs, diagrams, and drawings throughout this procedure. Everyone can understand the concept better thanks to this process, which also aids in its development by incorporating additional concepts and necessary data. 

    • SCAMPER 

    SCAMPER is made up of seven concepts such as "Substitute," "Combine," "Adapt," "Modify," "Put to other users," "Eliminate," and "Reverse," which are connected by the first letter of each word. It is possible to create new methods for producing a product or finding a solution to a problem by taking into account all the components of SCAMPER. 

    • Five “Why”s concepts 

    The "Five Whys" method, which involves asking "why" five times and writing down your responses for each, can help you identify the problem's fundamental cause and provide appropriate remedies. It is frequently used in conjunction with the "fishbone diagram," a very popular tool. 

    There are a few additional tools used in ideation; let's look at some of the most popular ones globally: 

    • TRIZ 
    • Lateral thinking process 
    • Six Thinking Hats 
    • Herrmann brain dominance instrument 

    Stage 2: Research

    Researching is the second stage of product development phases. After you have decided on a product concept, it is crucial to carry out market research to comprehend consumer behavior and the target markets. Additionally, it entails receiving feedback from customers, conducting surveys, and learning about their needs and issues with reference to a certain product that is being produced. 

    In order to plan the product design appropriately, market research is used in new product development research primarily to understand customer needs, requirements, and beliefs. As the primary goal of developing a new product is to increase profits, it is crucial that firms take this process into account because it reveals potential marketing strategies. 

    By this stage, a business or industry will be able to determine whether investing in the creation of a new product is worthwhile. Several elements are involved in the research stage of new product development; the following are the primary ones: 

    1. Product Research: It is a procedure to assess the concept of your product in terms of how well it sells in the market, which aids in determining how best it is to develop. 
    2. Risk Analysis: Analyzing previous hazards experienced with the same sort of product or process can help identify risk factors in the development and marketing of a product. 
    3. Customer Analysis: Recognizing the target audience and understanding what motivates them to fulfill their needs. 
    4. Competitor Analysis: It is a tactic to evaluate the market share, cost, cons, benefits, flaws, strengths, and customer reviews of competing products. 
    5. Audience research: It involves choosing a group of individuals and conducting a poll to see how many of the participants will become potential customers. 

    Market research also plays a significant part in this process during the product development stages. Let's look at some elements of market research: 

    1. SWOT Analysis: SWOT analysis aids in identifying a product's strengths, weaknesses, opportunities, and threats in the market.  
    2. Marketplace data: Using this technique, one may view the retail pricing of the product in the market and its supply in relation to demand. 
    3. Market Trends: Studying the ups and downs of the stock market could be extremely beneficial for knowing about the market demand for existing products. 
    4. PEST Analysis: PEST, an acronym for political, economic, social, and technical considerations, refers to those elements that affect how long things will remain on the market. 

    Stage 3. Planning

    After deciding on our concept via ideation and conducting research into its market viability, it is crucial to outline the product's development process before moving forward with manufacturing a prototype. Planning entails considering and visualizing the resources needed to create the product. Planning entails a business strategy, a budget, the choice of materials, the team, the design, and advertisements, among other things. 

    Without having the necessary measurements, raw materials, equipment, and funding, one cannot build a prototype. In this procedure, all these variables must be planned, and designs must be created in accordance with the plan. 

    Stage 4. Prototyping

    The process of prototyping involves testing a product on a sample basis. A prototype is a model or a sample product that is made to be tested before being produced in large quantities. It prevents the loss of time and money. For things like software, hardware, and electronics, prototypes are employed. 

    Before receiving a final sample product, it usually takes multiple prototypes to be produced. Every prototype that is produced will be tested thereafter to see if the final specifications have been met.  

    Sometimes there will be important changes between the prototype and the finished product. Let's learn about them using the table below:

    PrototypeFinal product
    ProcessThe process will be straightforward with portable or tiny equipment because each product will be produced separately.Because it will be mass produced, the manufacturing process may be intricate and include large machinery that differs from the prototype.
    MaterialThe materials used will be less expensive because it is a sample product and does not reach the buyer.As it gets to the buyer, the material will be pricey and of high quality.
    VerificationThe finished prototype product will require some rework and will be excluded from inspections because the buyer will not get it.Before reaching the consumer, the finished product must pass all quality inspections and meet all criteria.

    Stage 5. Sourcing

    You have all the knowledge necessary to make the finished product in big quantities and sell it to customers after the prototype stage. Thus, the business will be able to coordinate the necessary resources throughout this stage, including raw supplies, machinery, investors, and employees.  

    A product manager will compare prices and, if possible, request bids in order to find the proper quality materials. and use contract labor or outsourcing companies to complete some time-consuming tasks. It also entails putting up equipment that is appropriate for the process needed to get the desired outcome. 

    Stage 6. Costing

    The most important aspect is the cost of the developed product. We will have clear data on expenditures incurred in each phase, including a future phase of marketing, since we have traversed ideation, planning, research, prototyping, and sourcing. 

    Costing includes expenditures of materials, manufacturing costs, rentals, advertisements, shipping prices, salaries, etc., Adding together entire manufacturing costs with taxes and calculating profit based on market value will result in the highest retail price that can be offered in the market. 

    Stage 7. Marketing or Commercialization

    The final stage in the new product development process is marketing also known as the commercialization of the finished product. We are now at the point where our product has passed all quality inspections and is ready to be released to customers. It is necessary to raise market awareness through marketing tactics such as digital marketing channels: email marketing, social media marketing, Google AdWords, and SEO. 

    The new product development process in marketing selects targeted customers to run advertising campaigns which results in faster sales.  

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    Who Is Involved in the Process

    Throughout a product's life, the development process goes through 7 steps in the new product development process and is carried out by different teams. The project manager oversees the entire life cycle, starting with ideation and continuing until the product is released onto the market. 

    Let's take a closer look at the different managers and the teams they lead who are participating in the process. 

    • Directors on the board and top management: The management team is crucial to this process; they create teams, hire personnel in accordance with their duties, and designate managers for each team to oversee all operations. They are in charge of gathering all the resources needed for the team to complete product development processes. In addition, securing investors and outsourcing some projects might speed up the process. Certifying the finished product and boosting sales with the appropriate strategies.  
    • Product Management: The team will be led by a product manager who will supervise all work to ensure on-time completion. Each piece of information is recorded and documented by this team for future use. The product team will act as a communication link between all the process teams.  
    • Marketing team: Before creating the product, this team is in charge of conducting market research to understand client needs and behavior.  
    • Design team: This team assists with the planning phase of creating a prototype by helping to envision the concept through design drawings.  
    • Project management: The team will be led by the project manager, who will oversee the entire product development process in operations management and the project manager will oversee all tasks in the creation of the product.  
    • Sales team: This team will be in charge of advertising the product and growing sales, causing all of the teams to generate additional products. 

    Aside from the departments mentioned above, other teams that contribute to the product creation process include human resources, engineering, research and development, and finance. 

    Best Practices for Your Product Development Process

    Many practices have been offered for the use of the steps in product development process.  Let us now look at several essential approaches: 

    1. Stage-gate model: 

    Stage-gate model is also known as the stage-gate process for new product development. This model is widely used for the development process of new products to launch in the market. Benefits from the stage gate product development process include better cooperation, higher success rates, quicker failure detection, better launches, and more.  

    2. Front End of Innovation: 

    This is commonly referred to as FFE (Fuzzy Front End). It is the first stage of product development in which every possibility is identified and pros and disadvantages are discovered before the formal creation of the process. This allows the team to determine whether to invest in further development or not. 

    3. BAH Model: 

    BAH stands for Booz, Allen, and Hamilton. It was invented in 1982, yet many companies still use it for new product development. It is the basic model that has served as the foundation for many additional models. 

    4. Lean Startup: 

    Lean startup is also called a lean product development process. By compressing the steps in the product development process, this method helps to save time and money. But in order for the same procedure to continue, it is necessary to check with client feedback. Businesses that suffered losses and wish to bounce back quickly find it most helpful. 

    Product Development Process Examples

    Let us examine stages in the new product development process with examples of some successful companies. 

    1. Ola Electric Scooters: 

    Let's understand the new product development process with the Indian example. In India, Ola has already established itself as a well-known brand and offers taxi and rental car services. The goal behind creating electric scooters was to meet the demands of the market, which included: 

    1. Rising gas prices on a daily basis. 
    2. Only a few well-known businesses, including Hero, Bajaj, and Ather, manufacture electric bicycles. 
    3. Most electric scooters cannot travel faster than 60 miles per hour. 
    4. Numerous low-quality local imports of electric scooters. 
    5. Urban residents care for the environment. 

    OLA created and planned to manufacture electric bikes in India by establishing a plant in Tamil Nadu with a capital investment of roughly 2400 crores, taking into account the aforementioned consumer demands. 

    A small number of bookings were first opened with the goal of gauging public acceptability, and a small number of motorcycles were sold. Following positive consumer feedback, OLA increased manufacturing and began selling a lot more products. 

    Electric two-wheeler production has benefited by adapting the first seven steps of the product development process. Let us see those stages: 

    • Ideation: Generated concepts, and decided to produce electric bikes 
    • Research: Researched the market for electric bikes and the products of competitors while studying consumer behavior. 
    • Planning: Designed the plan and published demo pictures. 
    • Prototyping: Initially produced sample vehicles to check for conditions to adapt on roads and weather. 
    • Sourcing: After successful prototyping, OLA set up a plant in Tamil Nadu for mass production. 
    • Costing: They have set the price before being sold in the market. 
    • Marketing: Marketing or commercialization done with ads, news, and demo rides. 

    2. NETFLIX 

    Netflix Is one of the best inspirational new product development process examples among many new inventions. Netflix initially began as a DVD rental company before gradually altering its stages of product development life cycle to become the top OTT streaming platform. They continually came up with fresh suggestions for web series to choose from, and Netflix is the greatest OTT platform for recognizing the needs of its users and meeting those needs. 

    Netflix is always producing high-quality content and responding to customer concerns right away. Every stage of the process, from concept generation to Netflix promotion, has elevated the production above its rivals. Netflix is one of the best examples of the new product development process. 

    The above-given examples of new product development process help the project and product managers to inspire from their ideas to generate innovative ideas. 


    We have studied product development life cycle stages with examples of successful company products. Many top companies use this process to overcome their struggles. Product development process stages help the manager and his team to simplify the work and divide responsibilities among them. Many fields like the digital product development process and automotive product development process have adopted this concept and found success in generating income. 

    Frequently Asked Questions (FAQs)

    1. What are the types of product development? 

    Various types of product development are as follows 

    • Systematic product development 
    • Team-based product development 
    • Customer-centric product development 
    • NPD in Turbulent times 

    2. What is the importance of product development?

    New product development process stages are so important because the precise needs of the consumer must be ascertained in order to build the product accordingly. 

    3. What is the role of product development?

    It is crucial in creating new items for the market and improving current products to meet changing consumer demands. 


    Satish T


    Satish T writes on project management and the many approaches used in projects across different sectors. He honed his fundamental writing talents in article production after discovering that the creation of content is essential when describing any product. Satish's areas of interest are fact-finding research, Search Engine Optimization, and skill development.

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