Every time over the last decade when Apple has launched a product or a service, I have always wondered on how they go about their business in product development with so much aplomb. Apple iPhone 6 triggered this post, I must say and I went back to some of the lessons I learnt while at HBS doing my Strategic Marketing Management Program and mapped it to what Apple did and continues to do. Not so much to my surprise they follow all the necessary steps in building a product or any of their service through some of the best practices one could imagine to such perfection that I wanted to put some of the basic principles of product development together through this post.
The key steps in new product development:
1) Idea Generation
2) Product Screening
3) Concept Testing
4) Business & Financial Analysis
5) Product Development
6) Test Marketing
This to me is a continuous process where the method to madness is a systematic one and teams involved should go about searching for opportunities to then cater to the gap that has been identified. One has to ensure there is complete delineating of sources for new ideas and therefore the methods of generating them could vary in every search and thought process that might potentially go behind the actual idea generation.
The methods used could be through (what I always use), The Kipling Theory and when most of the questions are answered one should focus largely on “Why”, “What” and “How” the most with regards to Product Development. In most situations it is good enough to be the guiding light for any new product development program that one would indulge in.
Most of the times in the digital world when one is solving a particular problem it clearly is focused on either the consumer or the trade depending on who the business is being addressed to.
During this phase “Problem Analysis” plays a very important role given it is designed to address the problems of the business whether its in the service category or the product category in itself thus by serving as a base for a new product or a service idea.
Benefit Structure Analysis
BSA is a feature in the process that determines the benefits and other characteristics that is required for the trade or the consumer irrespective of whether it is a product or a service led category and clearly gives a perspective on any defaults or perceived deficiencies in what is currently available or offered in the market.
Personally I spend a lot of my time looking at this aspect of the analysis and address my thought process in that direction to ensure there are absolutely no gaps while building a new product.
My personal take on this process is that, any business that is in the high-tech space and are product driven need definitive forecasting abilities and this is what Scenario Analysis does. This process keeps in mind the projected future that might have a direct impact to the markets being addressed, both consumer and trade and helps in the throughput of the organisation through disruptive offerings.
Apple does a fantastic job of this. I am sure their product teams spend a lot of time in Scenario Analysis and build what is future ready and we all know the kind of additions it adds to the valuation of the company through its profits in every one of it’s new product releases.
This is the next in line in the process where company/management/product managers involve in understanding the levels of competency of the product and determine whether it is viable in the first place. During this process any poor, unsuitable and other unattractive ideas in the feature of the product or service are discussed at length and some of them are cropped from the road map in itself.
This is like a check list for preliminary evaluation where all the requisite attributes of the product that seems most apt and are important in nature are captured with every idea that has been evangelised by the teams.
This is normally a closed group consumer forum where interactions help in testing waters for the new ship (read as product) that is about to be launched. This is also done through research surveys at times to determine at a very early stage as to whether you are headed in the right direction.
Make no mistake this is not a prototype stage and is an early stage exercise that determines the enthusiasm of the consumer by showing a brief description of the product or sometimes by showing a picture or even just through oral communication that might happen in the forum that has been created for testing the concept where group discussions enable in understanding whether the concept in itself will fly or not.
Once this stage is reached business teams from ground up is involved and the respective leaders put a business plan together to capture the following:
1) Demand Forecasting
2) Cost Projections
3) Competition Mapping
4) Investment Projections
5) Profitability Projections
After all this is when the actual “Product Development” process begins, (until now it was “Story Writing”), where the idea is considered viable for creation (These could involve product coding, packaging, branding, positioning to eventually usage testing) to then identify marketing strategy for optimum coverage.
A lot of companies unlike an Apple (Steve Jobs felt that consumers don’t know what they want and we have to tell them what they need) believe in test marketing in a big way. This is a process where sampling is done or the actual product is put up on sale in certain catchments/markets to observe the real time performance of the product under a proposed marketing plan. This helps in evaluating the product and also gives marketing teams to test their efforts in a real time environment before a full scale introduction is done to the market.
“Test Marketing” allows actual consumer and trade reactions and potential behavior when a product is actually deployed in full scale. Many a time there are knee jerk reactions from competition that allows enough time for companies to recoup and re-energise their efforts in their marketing strategies that allows continued growth and sustains projected success that ensures long term success and profitability.
While I am assuming Apple does every other process I am jotting down it clearly does not do any test marketing though all their product offerings have been mega successes over the last several years.
In a report published by Booze Allen & Hamilton post their interactions with over 500+ companies that were successful in product innovation a few characteristics remained the same.
- These companies had a lot to do with Marketing and R&D teams functioning in tandem to influence the flow of the product process and it was always housed internally
- They clearly had a lot of experience in introducing new products in the market that fueled the growth of the company
Clearly telling us that the more you do something the more efficient you become of doing it.
To build a successful business out of product development it is highly critical to:
- Emphasise on pre-development homework
- Voice of the consumer has to be inbuilt in the product definition
- Build sharp product definition
- Guts to kill a project if not viable
- Focusing on quality of execution
If you look at any of the top performing businesses globally the senior management has devoted necessary resources that are vital for the growth strategy whether it is through people or through money for technical and marketing efforts alike to achieve the desired product and company objectives.
Like I have penned above; apart from “test marketing”, Apple, I am sure does all of this right. Over the last several days these thoughts have been lingering in my mind and going back in time on every Apple launch if you map this above story, I am sure you would agree the level of efficiency that the product teams there work on by following the defined processes above. I strongly believe that every company that is into product development should go through this grind to deliver successfully.
About The Author:
Ram is the CEO of IbiboAds at Ibibo Group. He is a serial entrepreneur and brings with him years of rich experience in Indian digital space. He founded NetworkPlay that was later sold to Bertelsmann AG’s Gruner + Jahr, Germany in 2012 . During this journey, he also acquired and integrated SeventyNine.Mobi (A Leading Mobile Ad-Network) with NetworkPlay. More recently, he has founded PlatformPlay.Category Business Startups