Overview: New products and services are the lifeblood of all businesses. Investing in their development is crucial to business growth, customer retention, competing and profitability. Identifying and developing new products or services needs careful planning and should include management, staff, customers and even your competition.
Lifecycle: Any product or service has a 5 phase lifecycle. Understanding and planning how to manage this is essential to their commercial success
1) Development: This is the phase where you identify, research analyse, develop and market test a new product or service.
2) Introduction: This is the phase where you introduce the product or service to the market. Most spending is on marketing and advertising.
3) Growth: In this phase the product and service is being bought by customers. Managing costs and unit price is the key focus here.
4) Maturity: Growth in this phase is slowing or stopped. There is competition that drives down cost. Value addition is key to competitiveness.
5) Decline: Sales and profits fall. More marketing is not effective. Opening new markets can help. New products or services are needed.
Lifecycle Speed: Physical product lifecycles can be decades in length. Information services may only exist for days, weeks or months.
Lifecycle stage ?: Businesses should analyse their products and services and decide where in their lifecycle they are. Are new offers needed and when?
New Ideas: Ask staff and customers for ideas. Check out your competitors. Read the trade newspapers and magazines for new ideas.
Think Customer: Do the ideas you have gathered fulfill customer needs? Make their lives better? Give value for money?
Think Capability: Does your business have the funds, technologies, skills and facilities to create, manage, sell and support the new product or service?
Think Strategy: Map the new product and service ideas to your business strategy. Do they fit or do you need to adjust your strategy?
Core: New ideas that fit well into your core offer are the easiest to manage but there may not be many that you don’t already have.
Core Supportive: These are product and services ideas that support and compliment your core offer. These are useful in cross selling and up selling.
Core Adjacent: These are products and services that are not core but could eventually be core because they are logically close to your business strategy.
New Departure: These are ideas that are completely new to your business offer. They are the most difficult to develop, sell and manage.
An Ideas Pot: Every business should have a list of ideas available that is added to or actioned. This forms a key resource for fast business development.
Vetting Ideas: Deciding on what ideas could be actioned should involve management and staff and focus on fit, costs, customers, timing and profitability.
External reviews: Ask your suppliers, customers and others to review your ideas. They can provide insights that your team may have missed.
Practical Ideas: Ideas on the list should be prioritised for action. This means creating and implementing a budgeted development plan for them.
Impractical Ideas: Ideas that are not practical now may be in the future. Note down why they were not actioned and review them regularly.
Confidentiality: Many businesses insist on “Non Disclosure Agreements” when asking for external input to the idea review process.
Funding It: There are a growing number of grants and vouchers available for businesses looking to create new products and services.
Project Management: The use of proper project management processes helps increase the chances of success in the development and roll out processes.
Legal: Include legal and regulatory compliance reviews early in the project process. Non compliance will waste your time and resources.
Environment: Examine the environmental, energy and waste aspects of new products and services.
Prioritise ones that have a positive process, cost or image impact.
Market needs: All new products and services have to address a market need. A good idea to you might not appeal to enough customers to make a difference.
Market Research: This can be carried out using staff input, asking customers, reading, suggestion boxes, online and face to face surveys.
Analysis: Ensure that you set clear market size targets for analysis purposes. This should include points of break even and minimum uptake .
Is it Unique? : New product and service should have one or more unique selling points that differentiates it from competitive offers.
Is it Risky?: Be very honest in analysing the financial and commercial risks involved. Set clear criteria for a go / no go decision on an idea.
Can it be Copied?: New products and services that are difficult or impossible for competitors to copy should have a high priority.
Benefits: Clearly identify and quantify the benefits to the customer. This is a key consideration in setting a price for the new product or service.
Outsourcing: Some products and services may be best supplied to your customers from other suppliers. This can reduce costs, keep capability and make money.
Insourcing: Over time there may be products and service that you source externally that you decide can be more effectively provided by you.
Shared Services: Examine opportunities for services that can be built with others and provided to the market. Information services a prime candidates.
Release Timing: Decide on when you want to introduce the new product or service. All planning should work back from this point.
Uptake Speed: Setting targets for the speed of uptake is essential. This helps to manage production runs, stock levels and reduces losses if the item fails to sell.
Pricing: Establish pricing scenarios that give a positive margin but which can be introduced to assist in uptake and competitive positioning.
Sales Channels: Decide on the best sales channels to use. Some products and services will only be compatible with certain sales channels.
Support Strategy: Carefully analyse the support costs of new products and services. These need to be factored in the pricing .
Long term: Plan a long term strategy for the product and ensure provision is made for upgrades and improvements over time
Justify It: All decisions on investing more in a product or service needs to be fully cost / benefit justified. This process helps avoid waste and failure.
Phased Upgrades: Do not introduce all the aspects of a new product or service at launch. Some may be able to be phased to gain future competitive benefits.
Prototyping: Many businesses run trials of multiple new products and services to test the market reaction to them. Only the best are retained.
External Offers: Your suppliers may have new products and services they want to market test. Negotiate to be part of such trials.
Market Teasing: The imminent availability of a new product or service can be used in advertising to tease customers and create advanced interest / demand.
Pre Order: Customers can be offered to pre order new products or be first to get the service. This quickly identified likely demand levels.
Customer References: Positive reactions of early buyers can be a powerful way to generate market notice for new products and services.
Bad Comments: These are the most useful of all feedback. Collect them and analyse them quickly. They may drive changes that ensure market success.
Marketing levels: Carefully plan marketing and advertising campaigns that are designed and costed to support the life cycle phase of the offer.
Competition Entry: Plan how to react when a competitive offer enters the market. Strategies can include pricing, marketing, value add, upgrade or exit.
Counter Launch: Always have at least one new product or service available for rapid launch. This helps recapture customer interest.
Pump It: If you did it first don’t be afraid to use words like “Original” “First” “ Market leader” in counter competitive marketing.
Exit planning: Have an exit plan for any product or service. This means establishing trigger points for when you stop offering it to a market.
Be Brutal: Any products or service that no longer positively contribute to your strategy or profitability should be eliminated without sentiment.