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What is a Product Development Strategy In Marketing

Product Development Strategy and Market Diversification Opportunities

What is a product development strategy? Product development involves modifying an existing product to innovate in processes or to create new products already existing on the market. Nothing is simple in such a process. It requires dedicated attention to competitors and customer needs now and in the future, the ability to fund prototypes and manufacturing processes, as well as a creative marketing and a good communications plan. There are several typical subsets of the product development strategy as under:

The product diversification strategy

This product development strategy is used when the existing market a business is saturated, and the revenues and profits stagnate or decline. There is little or no possibility of growth. A strategy of diversification out of business niche and a new product was developed for a new market. An example of this strategy is a company that sold insurance products and decides to develop a financial education program for college students. The new product is revolutionary because there are other companies that make similar products, but it is new to the company in question.

Product modification strategy

Product modification strategies are generally aimed at existing markets, although another advantage can capture new users for the new product. An example of this product development strategy is toothpaste. Toothpastes that promote bleaching capacity are inspired by basic toothpastes.

The development of revolutionary products

The revolutionary products are those that are totally new and revolutionizing the world of lives of users. Computers and cell phones are good examples.

Before these products appear on the market, consumers do not know they need.  These products create those new needs. But the germ of an idea on how to better communicate resulted in products that have changed the world and radically changed the competitive landscape.

Benchmarking Process

Whatever the strategy employed, the new product development strategy must be carefully considered. It also requires a series of landmarks along the way.

Product Evaluations, studies and research and Product development are very expensive steps for companies. For example, if a company is currently developing a new product and a competitor beats that company on the market with a new similar product, the company must make a decision whether to go ahead on its own options of product development. Very often SMEs do business with outside companies to develop or enhance their products. Some companies, like Instadesign in Quebec (Canada), specialize in this area. When it comes to large companies, many have their own department of research and development focused on industrial design and implements the product development strategy.

Consumers are at the heart of the process

Whatever the products that a business development strategy chosen, consumers must be at the heart and involved in the Product development process from start to end. Set aside enough budgets for the evaluation of consumers review on the new product concept, prototype and the end-product stage. Make sure to include not only consumers who are your primary market but also those in which your company could secondarily appeal. If you like this article on product development strategy, please share it to your friends.

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