The concept of developing a product, taking it to market, and then exploring the various potential markets where it could do well is a long process. It is also one that takes time and proper development to truly explore.Thank you for reading this post, don't forget to subscribe!
There can be some confusion between market development and product development. Having a guide to determine “What is the difference between market development and product development?” can help to shed some light and provide clarity.
What is Market Development?
By definition, market development is a strategic step on the part of a company that is looking to develop an existing market as opposed to going into a totally new market. The company would then look for buyers that it can pitch a product to and reach a different sector of customers, all in the effort to increase sales.
Market development is generally a two-step process in the effort to tap into an untapped market. It starts with research of the market, doing segmentation analysis, and determining whether or not those segments are worth pursuing.
This is the attempt to take an existing service or product and look to attract a new customer segment with it. Expanding that reach means tapping into a potentially unexplored market or simply a different segment within that market.
What is Product Development?
As we further learn about “What is the difference between market development and product development?” we learn what entails product development. This is the process of taking an idea from concept all the way through delivery and whatever comes after.
Whether it is the delivery of a new product or simply making an old one better, the cycle of product development begins before anything is built. It can include things like brainstorming, initial concept, strategic planning, building the product, and eventually releasing it to the market.
Product development is ultimately equated to building out the product. There is something known as the waterfall process, where requirements are ultimately defined right at the beginning and implemented throughout each of the coming phases.
Teams embrace more agile strategies where customer feedback is crucial. Work and progress on the product are only released incrementally as updates and changes are made along the way. The development of a product is about more than “how” the product is ultimately built. It is more about the “What?” the “Why?” and the “When?”
What is Product Development Strategy?
When it comes to new products that are coming onto the market, there is a need for refinement within product development. Things like the type of product, industry, features, and more all can impact the development of that product. This is why a good product development strategy is necessary.
There are a lot of companies that put the focus on products that are geared toward their customers. Some look to offer a solution to a problem that exists either through their product or a similar product that is already on the market. But in just about every case, these will result in failure without a proper product development strategy.
Understanding product development is key. Let’s take a look at the different levels of product development.
When it comes to product development, the first step is always the generation of the idea. You need to have the idea to do anything that comes thereafter. This step includes either brainstorming a new product or an iteration of one that is based on existing market products, real-world problems, and doing audience research to better understand it.
No matter the product, it is not about creating one idea. It is about coming up with dozens, even hundreds, of different ideas so that they can be narrowed down to the few that will ultimately be good. There are two ways of coming to these ideas.
The first is to go for internal idea sources. Employees and company stakeholders would be the thinkers in this scenario. This includes roles like product managers, research and development, marketers, and so much more.
There is also the choice of going external. This means outside suppliers, stakeholders, and competitors, among other resources.
From there, it is about screening those ideas down to the few that are good. When you move past the idea phase, the goal is not to go back. Make sure that the ideas making it this far are good ones.
Concept Development and testing
When you have an idea that you feel good about, the plan is to take it from a mere idea to an actual product concept. Think of the product concept as a much more detailed version of that idea. Multiple concepts can be developed here—just consider the time, resources, and efforts that go into it.
It is also necessary that you test it out in one of the markets of choice. These concepts have to be pretty precise to have a real impact, and that is where testing can reveal just how impactful that product concept may be.
There is a lot to like about testing out concepts in front of a portion of the target audiences. This allows developers to see the responses of the people, what the appeal of the product may be, and how reliable the entire concept is. It also allows the opportunity to ask the target audience about specific questions which can help with pricing, product design, and prototyping.
Developing a Market Strategy
Though they are two different things, the market strategy is crucial in the development of the product. When you have a complete product and have thoroughly tested it, it is time to develop the marketing strategy. This is developed by keeping things like the market share, current market, and the target audience at the forefront.
A marketing strategy has a few main parts to it. Those include a target market description, value proposition, pricing outline, profit and market share goals, distribution and marketing budget, and long-term goals such as sales, marketing mix, and profit goals.
After all of that has been done—the development of the product, the market research, and determining whether it is a viable product—it is time to evaluate all of the information and determine how effective the new product may be.
Projecting costs, potential revenue, and conducting the necessary research are crucial here. Having a developed sales forecast is there to help put an estimate on things like profits, costs, and a timeline as to when those things will unfold.
Though the concept is somewhat similar, there are major differences between product and market development. One is the process of developing a process from the germination of an idea to the release to market. The other is analyzing the market and determining whether there is potential to serve that market.
Understanding that basic distinction is important in any business. Though there are many different methodologies within each of those distinctions, they ultimately can tie into one another as a company looks to bring products to market.