Even if a new product launched on the market is an astounding success in terms of sales and becomes a market leader, its market position will inevitably be challenged.
The product development conducted by competitors will most likely keep searching for strategies aimed at creating a corresponding product that is better, more efficient, more affordable or more desirable. In addition, an innovation can be created that renders the product unnecessary, or another means can be found to fill the role of the product. Consumer behaviour is also unpredictable: new trends, attitudes, fashions or changes in behaviour can lead to a sudden decline in the popularity of a product.
Modifying a product according to need
In order to maintain the success of a product, it must be developed in the long-term as based on customer requirements and the market situation. Designing the life span of the product, maintaining the vitality of the product families and variations, and discontinuing a product when necessary all represent parts of the product development strategy of a company.
The following lists some of the situational changes or indicators that must be monitored and reacted to by means of product development:
• Strong trends in customer feedback. If recurring messages regarding a product problem, a wish or a development idea begin to emerge from the flow of customer feedback, it is advisable to take the matter seriously and consider measures to develop the product in accordance with customers’ wishes. Generally speaking, the systematic collection of feedback through extensive surveys, targeted group interviews, consumer panels or similar methods may be the most important way of determining product satisfaction, attitudes and purchasing behaviour amongst consumers.
• Targeting new customer groups. If broader target groups, more diverse customer segments or new purposes of use, for example, are sought for the product, it is a good idea to consider what conditions must be met for the product to be suited to this type of use. Any one of the current product’s dimensions – name, colour, appearance, design, package – may be unappealing to the new target group.
• Targeting new markets. When a product is taken to new market areas, it begins in a way a new life in a new competitive situation – particularly if the new market areas differ from the original one in terms of language and culture. In a foreign environment, the features of the product may be misunderstood or interpreted in surprising ways. The fact that a product is successful in Finland is no guarantee that it will succeed in Estonia, France or Japan without any changes.
These change factors can be responded to by adapting the product: changes that improve the product’s competitiveness can be made to its design, name, marketing, packaging, colour scheme or other similar features.
If a new name or appearance is developed for the product, it can easily become an entirely new product. Modification is often used to build product families that comprise several product variations. A product family can also consist of products that complement one another, and form a group that is more than the sum of its parts. In these cases, product development must be steered consistently with the development of the entire product family in mind.
Taking hold of new markets
When launching a product to new markets or customer segments, the key questions regarding the product’s success must be revisited. Particularly when contemplating exporting the product to foreign markets, its pricing, marketing message and brand, suitability to foreign customer segments, sales and marketing channels and product protection must all be checked again – from the ground up. Product adaptation can be used to find development methods for ensuring competitiveness in the local competitive environments of the new market areas.
Product development in business strategy
Product development is unavoidably a continuous process in the business operations of a company: in order to succeed, a company needs strong products and services whose success can only be ensured by adapting them constantly to the needs of the customers.
For this reason, companies must supplement their general business processes with continuous and strategic innovation activities that ensure vital product development This creates opportunities for innovative product development, ensures its organisational position, and steers the development efforts towards the business goals in a controlled fashion.