In order for a company to continue operating permanently, it is necessary to constantly provide new products and services. This is because the social environment surrounding your company and the circumstances of your customers are constantly changing, and it is uncertain whether the same products and services will be needed by your customers forever.
However, this does not mean that we should blindly develop new products. So, what kind of process should we go through to proceed with product development?
This time, we will introduce the basics of product development in marketing and some examples.
What is the product development process?
It is very dangerous to proceed with the development of new products and services based solely on the discretion of one person or the thoughts of the development department. What often happens is that the development department proceeds with development based on market research they have conducted themselves, but when the time comes to sell the product, the sales department decides that “this kind of product won’t sell” and is unable to obtain cooperation.
Marketing is more than just market research.
Marketing refers to all activities involved in delivering value to customers
.
Everything from market research to planning, development (investment), sales, and collection is marketing
.
Therefore, each process in
product development
in marketing is very important. The planning, development, and sales departments will all participate and proceed as follows.
PEST is an acronym for “Politics, Economy, Society, Technology.” Analyze the macro environment surrounding your company. Especially when expanding overseas, P and S are very important.
Let me clarify the five threats (Five Forces) to your company. “Bargaining power of sellers (outsourced production factories, etc.)”, “Bargaining power of buyers (agents and customers)”, “hostile relationships between competing companies”, “threat of new entrants”, “threat of substitute products” We will analyze the following.
Customer (market/customer) Competitor (competitor) Analyze the strengths and weaknesses of the company (your company) from a third-party perspective.
- VC analysis
VC (Value Chain) refers to the flow from raw material procurement to manufacturing, sales, and distribution as a “chain of goods” or “chain of value,” and we examine whether each chain is operating efficiently by evaluating its strengths and weaknesses. Analyze from the perspective.
SWOT analysis summarizes the strengths, weaknesses, opportunities, and threats analyzed above as Strength, Weakness, Opportunity, and Threat. When conducting an environmental analysis, it is not effective to immediately start with a SWOT analysis.
-
Strategy planning
The following are collectively referred to as
STP strategy
and STP analysis. From here, narrow down your specific customer profile.
- segmentation
In order to narrow down the customer profile, we roughly classify them. The market is segmented by classification based on attributes such as gender, age, place of residence, annual income, occupation, and hobbies. In the case of BtoB, the company’s characteristics (business content, business area, company size, financial strength, etc.) are considered.
- targeting
In a highly fragmented market, we target the group of customers who are likely to find the product we are developing to be the most attractive.
- positioning
Once you have selected your target customer group, you need to decide how to position your product to make it appear attractive to that customer group. Positioning refers to the position of a product, such as concept, naming, packaging, price, etc., and how it can be devised to attract the attention of the target audience.
It is most ideal to start product development after completing this STP analysis.
- 4P analysis
Decide on measures for Product, Price, Place (distribution/sales), and Promotion. In product development, the final product plan (design, brand, packaging, quality, warranty, etc.) is decided at this stage.
Test marketing and crowdfunding
Even if you develop a product through the process described above, you won’t know how customers will react until you actually put it on the market.
In the past, products were sold in limited areas or mass production was started after trial sales at antenna shops, but now crowdfunding is increasingly being used for test marketing.
Let’s introduce an example of a manufacturer that actually decided on the period and budget using “purchase-type crowdfunding” and started mass production based on whether the project was successful or not.
- JVC Kenwood
In the earphone industry where noise canceling is becoming mainstream, we are crowdfunding “Multi-Live Monitor Earphones” that allow you to hear the sounds around you. Established with support from people who want to listen to announcements on trains and band members who perform sessions. On sale to the general public.
- Didirect (in collaboration with Takara Tomy)
Crowdfunding for the talking medicine cabinet “Smile Medi-kun”. If you store your medicine in Smile Medi-kun and set the time to take it, it will tell you when to take it by voice. The project was established as a product aimed at seniors living alone. On sale to the general public.
There are two main reasons to use crowdfunding for test marketing. Firstly, the purpose is to judge the marketability of the product to be developed (mass produced), and secondly, the purpose is to gain the support of the so-called early adopters who are sensitive to new products, and to hope that information will be spread through SNS etc.
When developing a product, the key to success is
to steadily carry out processes such as environmental analysis and strategy planning, and to conduct test marketing before making a large-scale sale
.
summary
◆It is important for product development in marketing to proceed while the planning, development, and sales departments all participate and share information, and it is important to avoid doing it solely on one’s own.
◆In product development in marketing, it is important to steadily carry out the basic process of product planning. We analyze the environment, formulate strategies, and formulate measures to ensure that the value of our products reaches our customers.
◆It is also important to conduct test marketing before selling a product. In recent years, more and more companies are using crowdfunding.
◆There are two main reasons to conduct test marketing using crowdfunding: to judge the marketability of a product, and to gain the support of the so-called early adopters, who are sensitive to new products, and to expect information to spread through SNS etc. It is possible to do both at the same time.