Product development is about turning an idea into a product. We want to meet the customer’s needs, but first of all choose the features that the customer is willing to pay for. We want to optimize for efficient production and logistics. We want to make the product profitable!
What are the criteria for profitable product development?
Create a product that the customer is willing to pay most for
Involve customer in product development
Set a realistic schedule
Get to market quickly with the product
The first version does not have to be perfect
Plan how the product will be produced
Include the packaging in the design process
How to create a profitable product?
Often, there are no correlation between manufacturing cost and value for the customer. Features of the product that the customer is willing to pay for can have small impact on production cost. So, it is important to include the features that provide the most value to the customer and least cost to you.
It is said when we buy a product, we buy 30% functionality and 70% adventure.
The adventure around the product are those things that has no functional value, like the brand, sales channel, product design, material selection, packaging, etc.
Why is product design important?
Good design can give added value for the customer without a corresponding cost in production.
What is good design?
If you have two alternative designs of a product, present them to relevant people and ask – Which one of these do you think is the most expensive? People tend to have a more objective idea about what is expensive, ie what others are willing to pay for the product, as opposed to the subjective – What do you like?
We want to develop the most profitable product. Therefore, the best design is what the customer is willing to pay the most for.
The value of good prototypes
Prototypes are an important part of the development process. With 3D printing, you can quickly get a working model and test alternative solutions. For technical functionality this is perfect.
Communication with customers is something else. If your goal is to sell, the product should look as if it came from the production line. A prototype-looking product, wrapped in bubble plastic gives the customer an impression that you are not ready yet. On the other hand, if you start your meeting unboxing your perfect product from a perfect packaging, you customer will pay more attention to your sales pitch.
Read more about product development and prototypes.
Selecting the materials for the product
Mostly, the product materials are defined by other factors, but sometimes we can choose between materials.
We did an experiment for a customer; An electronics product needed an enclosure, and we discussed plastic molding or machined aluminum. We made prototypes of both, and both products looked like mass-produced. The aluminum casing naturally was heavier, designed with straight lines, brushed, gray anodizing. The plastic cabinet was lighter, and the design had rounder shapes.
We were surprised by the result: People who did not know the product assumed that the one with aluminum enclosure was at least twice the price as the same product in plastic. Others thought that the two products could not possibly have the same function!
Involve customers in the product development
If you can, involve customers in the development process. Then your chance of developing something the market really wants increases. And you can also do some marketing at the same time.
Customers can provide important input about what the market wants and what it is willing to pay for. But beware, because along with helpful advice you will often get a lot of nice-to-have-features that no one really wants to pay for. As a developer, you must always weigh production cost against value to the customer.
Do not optimize the product. Get ready!
During the development process, good ideas will emerge that improve the product. These can be very good ideas, but it can also stop your progress. Too often I've seen developers improving and optimising, and delay the product launch.
This is what we call the developers trap; Those who keep on improving the product and fails to get it on the market.
Therefore; Make it a rule to make notes of all improvements to the next revision of the product. Your first idea was good too! Complete it! Get it on the market and start making money! Once you have started selling the product, you can retrieve the good notes and start on the next version of the product.
A perfect product is all well and good, but positive cash flow is better!
Product design should also include packaging
Packaging is far more than protection for transport. Packaging is part of the product experience and is the customer’s first impression of your product.
If you buy a phone, PC, watch or game console, you will see how much is put into the packaging to give you a good “unboxing experience”. The reason is simple – the price the customer is willing to pay is higher than the cost of packaging.
Read more about why is packaging an important part of the product?
Estimate development process time
Time is an important factor for a good product development process. Present a realistic time schedule for when the product will be ready. But, a good plan does not mean plenty of time. There should be some stress. There must be high progress to keep the enthusiasm.
Product development and production
In the product development you should involve people from manufacturing, or someone with good manufacturing knowledge. Preparing the product for the right manufacturing process can give great savings and increase product quality.
NewTracks works closely with our manufacturers and can contribute to your development process for efficient production and logistics.
NewTracks is your partner in product development
We help our customers throughout the process from idea to product ready for market. In several projects, NewTracks collaborate with industrial designers who focus on the product design, while we take care of engineering and industrialization. We can make prototypes and photo-realistic presentations, so the customer can do marketing long before the production has started.
With good resouces we can make the product ready for production faster, and we will choose the right production process based on production volume. As sales increase, we can move to other production processes prepared for higher volume.
Product development examples
Utvikling av Nomad – aluminiums kabinett til elektronikk, for Bridge Technologies
Design av selvbetjent innsjekking til
Frankfurt Airport, for BB Computerteknikk
Utvikling av Plug & Play løsning for PLS, for BS Teknikk
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