What is product development?

Product development -- also called new product management -- is a series of steps that includes the conceptualization,
design, development and marketing of newly created or rebranded goods and services. Product development includes a
product's entire journey, from the initial idea to its market release and later.

The objective of new product development (NPD) from a business standpoint is to satisfy consumer demand to cultivate,
maintain and increase a company's market share. From a customer standpoint, it's to ensure a product's value as a quality
good or service.

Not every product will appeal to every customer or client base, so defining the target market for a product is a critical step
that must take place early in the product development process. Organizations should conduct quantitative market research
at all phases of the design process, including before the product or service is conceived, while the product is being
designed, and after the product has been launched.

Some organizations have product development centers that make products. For example, Alphabet Inc., Google's parent
company, launched a product development center in Nairobi, Kenya, to position itself to serve a growing base of internet
users.
The 6 stages of product development
Not only does the product development process help simplify a launch, but it also encourages cross-team collaboration
with teamwork and communication at the forefront of the process.
Let’s dive into the product life cycle and define the six product phases. All of which can help you successfully launch your
next product.
1. Idea generation (Ideation)
The initial stage of the product development process begins by generating new product ideas. This is the product
innovation stage, where you brainstorm product concepts based on customer needs, concept testing, and market research.
It’s a good idea to consider the following factors when initiating a new product concept:
● Target market: Your target market is the consumer profile you’re building your product for. These are your potential
customers. This is important to identify in the beginning so you can build your product concept around your target
market from the start.
● Existing products: When you have a new product concept, it’s a good idea to evaluate your existing product
portfolio. Are there existing products that solve a similar problem? Or does a competitor offer a product that doesn’t
allow for market share? And if yes, is your new concept different enough to be viable? Answering these questions
can ensure the success of your new concept.
● Functionality: While you don’t need a detailed report of the product functionality just yet, you should have a general
idea of what functions it will serve. Consider the look and feel of your product and why someone would be interested
Product development frameworks

Although product development is creative, it requires a systematic approach to guide the processes required to develop,
test and get new products to market. Organizations such as the Product Development and Management Association as
well as the Product Development Institute help businesses select the best development framework for a new product or
service. This framework helps structure the actual development of the product.

Development frameworks, such as the fuzzy front end (FFE) approach, define the steps that should be followed early in the
development process, but leave it up to the product development team to decide in which order the steps make the most
sense for the specific product that's being developed. The five elements of FFE product development are as follows:

● Identification of design criteria. Brainstorming exercises are used to identify possible new products.
● Idea analysis. A closer evaluation of the product concept includes market research and concept studies to
determine if the idea is feasible and within a business context that's relevant to the company or to the consumer.
● Concept genesis. This involves turning an identified market opportunity into a tangible concept.
● Prototyping. A rapid prototype for a product concept is created.
 Who is involved in the product development process?
One or more product managers typically oversee and coordinate product development activities. However, these tasks are typically
collaborative and involve multiple teams working in tandem throughout an organization.

The people and groups involved in product development include the following:

● Product management. Product managers keep tabs on each team's progress towards achieving a final product and

ensure they're operating on schedule. They draft a product roadmap as well as define the expectations and deliverables
for the different product teams based on the roadmap. They then coordinate with the teams and people involved to ensure
there are no problems or bottlenecks.
● Engineering. This is the most technical team involved. Engineers have the development skills needed for product
development. If the new product is software, the engineers must have programming and testing skills as well as
knowledge of development frameworks, such as Agile.
● Design. These tasks can overlap with engineering duties. Design professionals typically handle prototyping the new
product and identifying user experience issues.
● Sales and marketing. These professionals do market research and analysis to gauge customer interest in the
product under development. They're responsible for conveying this information to the other teams.
● Stakeholders. There are people and groups outside the organization that need to be updated on the
development of a new product and might even have to approve it before it's launched. Such stakeholders include
board members, investors, contractors, manufacturers, regulatory bodies and government agencies.
What is Inventory Control?

Inventory control refers to the process of managing a company’s inventory to meet customer demand while minimizing costs.
It ensures that the right amount of stock is available at the right time. Effective inventory control is crucial for reducing storage
costs, preventing stockouts, and ensuring product availability during key stages of product management​(How to develop
product …).

Key Techniques of Inventory Control

1. Just-In-Time (JIT): This strategy reduces inventory by receiving goods only when they are needed for production or
sales. This minimizes storage costs but requires precise demand forecasting.
2. ABC Analysis: Segregates inventory into three categories:
○ A: High-value items that require tight control.
○ B: Moderate value with balanced control.
○ C: Low-value items that require minimal control​
3. First In, First Out (FIFO): Ensures the oldest stock is used or sold first, reducing the risk of obsolescence.
4. Economic Order Quantity (EOQ): A formula used to calculate the optimal quantity of stock to order, balancing
ordering costs with holding costs​.
Importance of Inventory Control in Product Management

During the product development phase, managing inventory efficiently is vital. For example, during prototyping, companies
need to avoid excess raw material inventory while ensuring enough stock to avoid delays in production​

Technology in Inventory Control

● Automated Inventory Systems: Use software to track inventory levels in real-time, reducing human error.
● RFID Technology: Enables real-time tracking of inventory movement and enhances accuracy​
Reference
https://www.techtarget.com/searchcio/definition/product-development-or-new-prod
uct-development-NPD

https://www.techtarget.com/searchcio/definition/product-development-or-new-prod
uct-development-NPD

Stevenson, W. J. (2018). Operations Management.