Product Development Stages

Product concept: adding value to your product
The product concept describes The value of the product idea to your customer - its value proposition The relationship of the product to your overall business objective.

In the product concept stage, ask several crucial questions to identify the value proposition of your product.

• What extra value does the product bring to the marketplace?
• How does the product create value for the customer?
• How is the product different from what is offered in the marketplace now?
• Will customers be interested in and willing to buy your product?
• How many customers will buy your product? Will they buy more than one?

Incorporating design details can be a competitive edge

Adding value to your product
In general, there are four business processes where value can be added. You can build an understanding of your product's value proposition by evaluating it against each process.

1. New product development process innovation by addressing a need, introducing new materials, design features, brand name value, workmanship, packaging, quality.

This is the value proposition that most often comes to mind in entrepreneurship- being the first to offer an innovative product.

It's always advisable to do thorough research on the market offerings and on whether consumers will like your product. A business based on this value proposition needs to know and be different from its competition. Customers should be able to describe the special features of the product that makes them buy it instead of another. Innovation should be added throughout the product's life cycle.

"We don't get caught up in trends...I think that being true to the brand, not wavering on who we are...We are very much aware of what the identity is. " Diane Brush describes the success of Garnet Hill during the product development process as remembering the brand identity.

2. Inventory management process lowers inventory or raw materials and finished goods

A company that can lower its inventory holdings and still offer a product in a timely manner has value based on reducing costs. A good example is a custom-made dress that is made to order with only enough fabric and trimmings purchased for the orders.

Buying materials and producing goods "just in time" to fill the orders is another example. Technology and computer software is available to help you plan and organize your production to reduce inventory costs of materials and finished goods.

3. Order-to-delivery-to-payment process - reduces the time and efficiency of taking orders, producing goods, and delivering.

Streamlining the order-to-delivery-to-payment process can add value to a product. Some businesses offer products similar to others in the marketplace, but offer shorter lead time for production and faster delivery methods. Information technology is again the key. It offers efficient communications with customers and business partners that speeds up the production and delivery process. As off-shore and domestic options for apparel production increase, time may make the difference in the decision to buy from one business rather than another.

Innovative fabric design can add value to your product

4. Customer service process builds an effective communication process with customers during initial inquiries, order and delivery, and post-purchase questions. Electronic communication, technical manuals, and repair and maintenance agreements can aid customer service.

From easy shopping and ordering processes to life-time guarantees of products and generous exchange policies, customer service can be a successful business value proposition. Either by itself or in combination with another value proposition, customer service is increasingly used to differentiate product offerings.

"We have a responsibility not only to our customers but to the bigger public which means engaging with other companies and toward a common goal to improve factory conditions around the world...I think we all realize now that it is not just creating a great product and getting out there but there is a bigger picture to look at. " Amy Hall, director of corporate accountability at Eileen Fisher, discusses the importance of social responsibility to today's businesses-for employees, production workers, and customers as well for personal accountability.

Relating product value and business objectives
After you have defined your value proposition, relate it to your business objectives. These questions may help you.

• What products or services compete with your products?
• Will they compete on price? On function? On style?
• Who are the potential customers or target market for your product?
• When will they buy? How often will they buy? How many will they buy?
• Will fashion innovators or fashion followers buy your product?
• Will your product be bought repeatedly or just once?
• Can the product be manufactured in quantity at a profit?
• Is the financial support for the product development and launch adequate based on the business environment and demand?

According to one estimate, out of 64 ideas that a major business might start with, only 2 will make it to a national launch. (See the chart below.) Moreover, the cost to test, develop, market, and launch a new product grows exponentially at each stage from idea to launch.

Small businesses and entrepreneurs will concentrate on local or niche markets rather than a national launch. Still, every businesses of any size should recognize that every idea will not make it to market.