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4 Factors to Consider When Developing a Product

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New products fail 95 percent of the time. All of the time, effort, and money those companies put into their products were for nothing.

If you want your launch to be successful, you need to take the right steps when developing a product. Let’s look at 4 factors to keep in mind.

1. Define Your Target Market When Developing a Product

You might have what seems like a great idea for a product but if there’s no market to sell it to, you’re wasting your time. Make sure you define your target market and test its interest before you start developing a new product.

You can do some market tests with platforms like Google Ads and Facebook Ads for very little money. Those tests can tell you if there’s enough interest to make it worth starting development on your idea.

2. Decide On the Configuration Options

It’s easy to fall into the trap of trying to offer a version of your product for every possible buyer. But having too many options will end up hurting your product, not helping it.

If customers have too many options, it can lead to “paralysis by analysis” where they can’t decide which one to choose. When that happens, they might end up going with a competitor that has a simpler product matrix.

Follow Steve Jobs’ lead when he created Apple’s four-quadrant product strategy. They only offered four Mac options – desktop and laptop versions of consumer and pro machines.

3. What Development Resources Do You Need?

Before you get started, figure out exactly what resources you’ll need for your product development strategy. Do you need manufacturing resources? Manpower resources? Digital resources like IronOCR’s Azure OCR API?

Some resources are easier to spin up than others so make sure you give yourself plenty of lead time. You don’t want to get halfway through the development process only to find out you’re stalled because a resource isn’t available.

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4. Determine Your Pricing Structure

Pricing a product is a bit of an art. You can look at it purely from the perspective of profit margin but there’s much more to it.

What kind of buyer do you want to appeal to? Are you planning to fight for the low-end buyer by offering the cheapest option in your market? Or would you rather aim for higher-end buyers by pricing your product above your competition and creating a story about why you charge more?

If you aim to be the lowest price, it’s tough to stay ahead. If someone else enters the market with a lower price, you end up in a race to the bottom.

Plan the Product Development Process Before You Start

Make sure you go through these steps before you start developing a product. Planning ahead will help you spot any gaps in your strategy and fix them while it’s still easy to make changes.

Browse through the Business category on our site for more helpful articles about running a business.

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