What Are The Seven Steps in The Offering Development Process? The Key Activities in Each Step
To learn the seven steps in the offering development process, we must learn what is offering development means and how to process them. Having excellent products that customers desire to own is important to any company. Most startups are started by people who get a new idea about how to make something better. However, companies face dangers not just from competitors but consumer needs, technology, and even product life cycle. Waste too much money and time on an unpopular product can lead to big troubles for companies. Therefore, companies are following the staging process for product development, nowadays. The seven steps are idea generation, idea screening, feature specification, testing, launch and commercialization, evaluation. Why? Because each step respectively has its own key activity that crucial to the overall process.
I. Idea Generation
Of course, first of all, you need a whole new idea such as develop an app like Uber to provide a more convenient way while grabbing a ride. Not only the funders but also their employees can come up with new product ideas. Elon Musk may be the founder of Tesla, but not every idea is from his head. Ideas can come from anywhere, even from your customers, if you keep following their favorite activities. For instance, if you provide Nintendo with feedback while you playing its games, your feedback may alter the final style you receive, and Nintendo will develop more popular games inspired by your idea.
Moreover, your suppliers can provide another source of ideas for new products. For instance, Tesla's battery suppliers might develop a new advance 4680 battery cell. It is bigger, offers six times the power of Tesla’s previous cells, and five times the energy capacity.
However, some new ideas are not completely new, they are just versions of existed products and services. For instance, the newly released iPhone 12 with the Ceramic Shield have the toughest glass ever in a smartphone. Tough may be great, but Apple also wanted to make it scratch-resistant, which helps protect it even more and amazingly quadrupled the drop performance.
One thing we must understand is that idea generation is typically the least expensive step. As you move on to the next coming steps, they are usually more expensive. Because ideas are relatively cheap to generate, making them become reality is difficult and expensive.
II. Idea Screening
Although new ideas are usually good things for companies, not all new product ideas are good ones, even the big companies can make stupid mistakes. Why do we fall? So, we can learn to pick ourselves up. Therefore, idea screening is to try to early avoid mistakes before it too late. If you discard bad ideas sooner, the less you waste on it and the less investment made and lost. Most of the time, this step is to try to figure out the proposed product actually adds value for the customer and satisfies the demand or not.
Sometimes, demands have their own periods. For instance, vaccines are highly demanded during the pandemic of COVID-19. So, can your company get the right products to the right markets within the right time? That's a crucial question before you move on to the next step. Moreover, can your factory manufacture the products within budget and sell them at great prices to make profits?
Another aspect you need to think about is that the new products fit the vision, mission, and objectives of your company. For instance, if you are a supercar maker like Lamborghini, but you try to make a car like KIA Picanto. It can be a huge mistake since it doe not fit the image of your brand. However, under the limited damage, some companies choose to conduct testing their new ideas at this stage, in order to get early consumer feedback before investing too much money.
III. Feature Specification
This step is also highly focused on what consumers want and need. To process a deployment with the customer’s desired benefits such as how the product is designed. In this step, we have to bundle the right features targeted to specific customer needs.
IV. Development
After the thinking parts, the development step is where the actual offering is designed and the prototypes of it are developed. For instance, we already make our decision to make electric cars, but how or what shapes to make? Before a new drink can be sold on its menu, Starbucks may have already tested and simply the preparing process for their barista to learn and prepare it quickly.
V. Testing
Just like the vaccines of COVID-19, during the testing stage, the offering is tested. However, all conditions that can change how well the product works such as the variant virus. Therefore, we must consider all conditions we can before we start to sell the products. Bad reviews can make your company hard to reverse the thoughtless brand name.
VI. Launch or Commercialization
Once your offerings have been designed and tested, it is made available to customers. To fit your strategy, you can choose to launch them all at once or choose to use the rolling launch that some products first and then others later. For instance, if you are a cookies maker, you can choose to launch a spicy new taste first to test if it is popular or not.
VII. Evaluation
After an offering is launched, it is not the end. Companies still need to executives closely monitor it. For instance, after people get their first Tesla and drive them for a period of time, their feedbacks can help you fix the possible issues and make your products even better. Therefore, firms must constantly in the process of evaluating their offerings and modifying them by either adding or subtracting the features and services associated with them. If everyone wants a car with 7 airbags, you may consider adding them as your standard offerings.
How Should A Company Evaluate New Ideas?
When you got a new business idea, you can take some useful steps to evaluate your idea before setting up a business. For instance, write your business plan, assess market demand, research the competitors, and ask for real feedback.
What Are The Criteria?
It’s important that you focus your time and energy on the ideas you believe will have the most impact, so how you evaluate ideas is key. The criteria of new idea evaluation can be very different depending on what your company is offering and what you are trying to do. This can be achieved by using an idea evaluation matrix. For instance, if you running a company like Facebook, the criteria for the new idea evaluation can be how much time they stay on your websites within a specific period. An excellent idea evaluation matrix enables you to screen and rank each idea.
What Strategies Do Firms Pursue When Their Products Enter The Decline Stage?
Truth, no matter how good your product is, it still obeys the rules of the product life cycle. As more and more advanced offers regularly replenish the market, the decline stage is going to come, eventually. However, there is still money to be made if you can handle it correctly. Firms have to know what are the true issues, first. If you know what the problem is, you have solved half of the problem. The reasons can be the product itself(people simply don’t need this item or service), competition, technological advance, financing, economic issues(During the crisis, people cut costs and buy only essentials). Now, firms have to rechoose or adjust their directions. And, as always, they can choose to leave or stay until it is unprofitable anymore.
Reference
Decline stage of product life cycle: Overview and strategies. (n.d.). Retrieved February 22, 2021, from https://www.eleken.co/blog-posts/decline-stage-of-product-life-cycle-overview-and-strategies
Tanner, J. & Raymond, M.A. (2015). Principles of Marketing. University of Minnesota Open Textbook Library. Licensed under a Creative Commons by-nc-sa.
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