What Is Product Development? All the Essentials You Need to Know

Phin Hochart

Everyone knows how a bill becomes a law…

But how does an idea become a product?

Well, that’s the story of product development.

Although there’s no catchy song written by the late, great Jack Sheldon to explain it, we’re confident that you’ll know all the basics after you finish this post. 

We’ll look at the various stages of product development, how it differs from product management, examples of product development from big companies, and tips for creating your own product development plan. 

Let’s start by defining what product development is.

What Is Product Development?

Man thinking of product development
Product development takes you through a variety of stages before you have a good or service customers want to buy.


New product development or software product development is the process of turning an idea into a sellable good or service and bringing it to market. 

The goal is to create what your customers want. 

However, product development won’t tell you that. If you’re selling to consumers, you’ll need to create a customer persona, and if you’re selling to businesses you’ll need a buyer persona in order to correctly identify what your customers lack and need to be fulfilled. 

And if you need a bit of help in this area, a method many businesses use to generate fresh product ideas is front end innovation, or “fuzzy front end.”

There are 5 basic elements of front end innovation:

  1. Identification of design criteria - Identify opportunities in your market for new products and services that can beat your competition and satisfy your customers.
  2. Idea analysis - Ideas identified as winners are analyzed for their relevance to your business, brand, and market. 
  3. Concept maturation - The chosen ideas are incrementally and iteratively matured into a tangible concept. 
  4. Prototyping - The concept is examined for its business value and rough versions of its potential final form are tested. The prototype is evaluated on whether or not it should move to the development stage. 
  5. Product development - The prototype and concept are put through all stages of the development process.

The 7 Product Development Stages

Business people and product development word picture
You likely won’t have a product if you don’t go through all 7 stages of its development.


Product development goes through at least 7 stages before it’s marketed to your target audience. 

Let’s run through each stage below. 

1. Idea Generation

The front end innovation phase we outlined earlier helps you discover workable features and functions, but it doesn’t necessarily tell you how it can become a product. 

Idea generation is when the concept and prototype for potential features and functions are used to generate many different product ideas  - which may include updating or changing existing products. 

The goal is to address an identified gap in the market. 

Idea generation takes the form of strategic brainstorming of new products and deep analyses of customer behavior and needs to help focus ideas and keep them relevant. 

Here are 5 market research tips you can follow for improved results. A customer satisfaction score (CSAT) survey is also beneficial.

2. Idea Screening

Idea screening is all about killing your darlings. 

Your job is to remove all the product ideas that aren’t attractive, feasible, or sensible. 

Before removing ideas, it’s best to agree upon objective criteria for determining the good from the bad so you don’t waste time arguing over trivial aspects of the potential product. 

After you have the criteria and you’re ready to start the screening process, you can begin by showing customers a handful of your ideas and requesting their feedback on what they would like or dislike. 

Then, you can debate which ideas should be cut. Here are some questions to consider about your product ideas:

  • Will our customers benefit from this?
  • Do we have a large enough audience for this?
  • Are their existing competitors and how difficult would it be to capture market share?
  • Are market trends positive for this?
  • Do we have the technical ability to manufacture this?
  • How profitable can we expect this to be?
  • What is the market clearing price for this product?

3. Concept Development

Concept development involves sifting through the legal and pragmatic aspects of producing the final product. 

Intellectual property and patents are hunted down and studied to prevent future infringement lawsuits. 

Features, benefits, and other marketing details for the product are outlined. Marketing messages are drafted. 

Decision-makers are notified and prepared. 

Specific design details are sorted out and solidified. 

The cost of efficient production is reviewed along with any other critical considerations or requirements.

4. Market Strategy

Market strategy or business analysis identifies ways to effectively sell your product. 

The 4 primary components are 

  • Product - Making a good or service designed to satisfy your customers’ demands that offer the functionality and aesthetics they desire.
  • Price - Choosing the price that your customers are willing to pay that takes into consideration your profit margins, supply and demand, competitor prices, and customer survey data.
  • Promotion - Presenting the product to the correct audience in a way that demonstrates its value and persuades them to buy it, including through advertisements off and online, public relations, live events, etc. 
  • Placement - Providing the product in places your customers shop, ranging from brick-and-mortar only businesses to exclusively online businesses and all the variations between them. 

5. Product Evaluation

Product evaluation is when you develop and release a full-fledged prototype of your final product - including its packaging - and test it in real usage scenarios. 

For software products, this is known as a beta test. 

The goal of this evaluation is to determine if the product is functional in a real-life environment, if customers understand it and want to use it and if they’re willing to pay the set price for it. 

You can use focus groups to gauge people’s interest and ask a bunch of insightful questions. You can simply interview prospects and customers to discover their thoughts and feelings about the product. 

Trade Shows are another avenue that allow you to interact with prospects and get their feedback. 

Their criticism will help you identify redundancies, lame features, and aspects of the product that doesn't offer any value or improve the user experience. 

Their compliments will tell you what features and functionality matter to them most that you should double down on, improve, or put at the center of your marketing campaigns. 

Evaluation and beta testing are about creating a feedback loop where you release the product in an early form, change it according to what you heard from users, and release another version. And on and on it goes until you’re ready for the next step. 

6. Technical Improvements and Implementation

All the changes and improvements from the previous step are fully implemented and the final product takes shape. 

Final technical difficulties are worked out and all departments involved in the launch are organized. Research and development, finance, marketing, production, manufacturing, operations, and any vendors. 

7. Market Testing

Market testing is distinct from beta testing in that it releases more than just segments of the product, it tests the entire package. 

From marketing angles and messages to packaging to advertising to distribution to sales. 

The strategy most often used is one in which you offer your product to a random sample of your target market or a core group of buyers you’ve identified as being the right fit for the new product. 

Like the feedback you receive from beta testing, the critical and positive reviews about your product will inform how to best launch the full product to your entire market effectively. 

This marks the end of “product development” and leaves you with only one extra step. 

8. The Product Launch

The final product is launched to the general audience. 

All the insights gained from the previous stages are crystallized into a complete marketing and distribution plan through all the appropriate channels. 

The “lifecycle” of the product is determined by a number of factors, from economic circumstances that are outside of your control to reception from your target market to subsequent enhancements to the product after launch. 

After a period of time, it’s best to review the success of the product launch and how well the new product is performing compared to the rest of your portfolio. 

Product Development vs Product Management

Product development and product management are very different from each other and it’s worth understanding what makes them stand apart. 

Product management guides the strategies and tactics behind your go-to-market plan. Their job is to gather data from your target market through customer research, translate customer requirements into product updates, and ensure the product remains top-of-the-line throughout its lifecycle. 

Product development uses the insights and direction provided by product managers to create new products that better solve customer problems. 

If products were Norse Viking ships, management would steer while development row. 

Creating a Product Development Plan

Men with lightbulb heads typing out product development plan
Without a plan for how development will run, your product may always remain just a good idea.


Product development plans should detail the principles you plan on following and the resources and processes you require to complete the project. 

Below are some tips and steps you should include during product development planning. 

1. Keep It Simple

A product only has a few seconds to capture a prospect’s attention. Quality design should be top-of-mind, especially if you have strong competition in your industry niche. Consider paying for high-quality design that matches the style and preferences of your market. 

Even the packaging should be clean, easy-to-read, and compelling. People need to know what you sell from 30 feet away. 

2. Don’t Blindly Stick to Low-Cost Options

Purchasing decisions should be made on a mix of quality and price, primarily. The most important of which is quality. 

Too often, businesses that are tight on cash flow and are trying to bring a new product to market end up prioritizing lower costs instead of higher quality. But you may end up with a vendor who takes harmful shortcuts and screws up your production, or delivers subpar materials - causing you to release a faulty product. 

You’re never going to get exactly what you want the first time, but if you’re outsourcing any part of product development or buying materials you need to complete the project, make sure it’s from a reputable company with high-quality products. Of course, it won’t hurt if they’re a bit cheaper than another vendor as long as the quality remains. 

3. Protect Your Intellectual Property

Before hiring a good IP attorney and putting them on retainer, go to the official U.S. Patent and Trademark Office website and discover whether or not your idea has already been created. 

If not, then make sure to file for all the necessary protections now before anyone (especially competitors) know that you’re developing a new product. 

Trademark the name and any proprietary technology. Purchase the web domain(s) associated with it. File a provisional patent application which allows you to stake a (relatively) cheap claim on your idea while giving you a full year to file the rest of the necessary paperwork. 

And if it makes sense down the line, file for patents in other countries. This makes sure you cast a large shield over your developing product and possible iterations.

Smarter Product Development Through Visual Communication

Product development requires you to communicate with a lot of different people:

  • Managers
  • Designers
  • Testers
  • Marketers
  • Salespeople

And the list could go on. 

You need a streamlined way to communicate with your team quickly, and in a way they’ll instantly understand what you mean and how to implement what you want. 

We’re talking about visual communication. 

Like annotating screenshots instead of writing out complicated suggestions in an email. 

Creating step-by-step GIFs that show instead of telling people how to perform a certain action. 

Or hold virtual meetings through your webcam instead of tearing people away from their desks and huddling them in a cramped room. 

At CloudApp, we believe fast and easy collaboration is a must-have for truly efficient product development. 

We’ve been ranked by G2 Crowd as one of the top sales enablement tools

Discover why CloudApp is an essential product development tool today.

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