Bringing a new product to market—or updating an existing product—is always a challenge. Is there a perceived need for the product? More importantly, are people willing to pay for it? This is why creating a product development strategy is a crucial step toward presenting your product to the public.
A product development strategy is the planning and development process that results in new or improved products. It involves conducting continuous market research, performing product tests, and redefining the product concept to fit shifting customer needs. This article will define what a product development strategy is, why it is essential to the process of launching a new product, and how to build a product development strategy from scratch.
What is a product development strategy?
A product development strategy is a plan that lays out how a company builds and launches new products or updates existing ones. Without a product development strategy in place, there is no clear path for a company to develop new products or new features.
With a plan in place, you can put an organized effort into motion — one that consistently rolls up to the company's overall business goals and takes into account factors such as market trends, customer needs, and competitor offerings.
Advantages of a product development strategy
Why bother with a product development strategy? Success in the marketplace is no longer about having the best ideas—it’s about doing the necessary research to find the right product-market fit, then planning and testing so your product becomes profitable.
With the right product development strategy, you can meet revenue goals, open up new markets, persuade your competitors’ customers to switch over to your product, and improve the performance of your existing products.
Stages of product development
While the product development cycle is hardly ever a linear process, it does tend to follow seven stages:
- Idea generation: The team comes up with new product ideas via market research on current trends and competition, focus group discussions with actual customers, and internal brainstorming from across the company.
- Idea screening: The team then prunes the initial list of ideas to be more realistic. At this stage, the product team screens ideas using criteria such as marketing potential, risks involved, the technical feasibility of the new product, and how it fits into the overall business strategy.
- Concept development and testing: The next stage is where the team turns ideas with the most potential into actual concepts by defining the product's target market, price, features, and benefits. After that, the team tests those concepts on potential customers to get feedback.
- Business analysis and market strategy: At this stage, a business analysis helps figure out possible profit, expected costs, and sales forecasts. Alongside this, you need to develop the market strategy to nail down how the company will promote, price, and position the new product.
- Product development: Here is where you actually build the product or new feature. Depending on the project management methodology used, this could involve developing a prototype or minimum viable product and doing continuous testing to get the product ready for launch.
- Test marketing: Once the team develops the product, it tests the product on a small market to get feedback from potential customers and identify any problems.
Product launch: Here the company launches the final product to the full market — that process includes making it available for purchase, promoting it to the public, and providing support.
How to create a product development strategy
To create a product development strategy, there are four simple steps to follow: conduct market research, leverage user research, start testing, and launch your product. These steps are critical to creating a successful product development strategy and ensuring your final products are of the highest quality before taking them to the market.
Step 1: Conduct market research
The first step to creating an effective product development strategy is conducting market research. This is the process of collecting information about your target audience, the general market, and your competitive landscape.
The point here is to use the data to assess whether the product you’re developing has any chance at success. By doing comprehensive research and combing through existing resources, such as industry reports, statistics, or news articles, you can find where the demand lies and where your product can fit.
A large part of this process is aggregating and grouping market research in a centralized location so your entire team can access the data. Using a prioritization and roadmapping tool like Jira Product Discovery makes it easy for teams to capture and prioritize product ideas in the “All Ideas” section, and align them with product roadmaps.
Step 2: Leverage user research
While market research gives you data from existing sources to form a general picture of the larger market, user research is all about gathering first-hand information from customers and stakeholders. You can do this with a variety of tools, including feedback surveys, customer interviews, focus groups, analytics, and remote user tests.
Gaining first-hand feedback is vital to your product development strategy because it helps validate your idea with potential customers before you spend time or money on development.
Ensure you capture and analyze all user requests and comments in one place so your development team is on the same page—the “All Ideas” view within Jira Product Discovery is the perfect place for aggregating this data.
Step 3: Start testing
The third step of product strategy development involves testing your product’s concept or features to see how potential customers use it. At this stage, it’s also vital to test for errors and ensure functionality before launching the product.
Some points to take note of during the product testing phase:
- Source early feedback via mock-ups: Rather than waiting for a minimum viable product (MVP) to be available, begin testing for customer feedback with simple design mock-ups or wireframes.
- Test continuously: As the product goes through iterations, continually test it and capture user feedback within Jira Product Discovery.
- Don’t build for scale yet: Conserve resources and funds by focusing on the MVP and making it work before thinking about scaling up.
Measure using the product-market fit survey: Use the product-market fit survey to ask customers how disappointed they would be if you retired your product. If more than 40% answer “very disappointed,” then you’ve attained a good product-market fit.
Step 4: Launch the product
The final phase of product development is the launch. This is where you release your product or its latest feature to the market. It involves a coordinated effort between various teams to build excitement and awareness for it.
In addition to the product development and product marketing teams, bring in sales, customer support, and event management teams to build a dynamic event around this phase.
Jira Product Discovery helps teams create great product development strategies
Each product development strategy is unique and is the result of combining ideas and user feedback with rigorous testing and continuous development. Managing all those moving parts becomes easier with Jira Product Discovery as the central system that your team can depend on for bringing ideas to life.