Recently I was asked to help one of our clients with their application for the prestigious, Canada’s Best Managed Companies, for 2015. Canada’s Best is one of the most recognized private company awards presented by Deloitte, CIBC, National Post, Queen’s School of Business and the MacKay CEO Forum. The application process is very intense and requires a lot of time, effort and money. Therefore, we had to decide if the investment was a good choice for my client who happens to be very busy during this time of the year.
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One of the most difficult things in business is determining what price to sell your products or services for. In most cases, businesses base their prices on the cost of production, as they are unsure of the value they provide. For example, a jewelry maker may sell their jewelry at (x) times the price of silver. In another example, an accounting firm will figure out that they are paying a bookkeeper $25/hour, and thus bill out $75/hour as per the rule of thirds. If you aren’t familiar with the rule of thirds, it states that the revenues are made of three equal parts: cost of production, overhead and profit. No matter what multiple is used, businesses that do this are selling commodity instead of value.
The Commercialization stage of the New Product Development is where all of your hard works comes together. The usual steps are product launch, advertising and promotion, and distribution. During this phase we will heavily rely on the critical path analysis to ensure that the customers receive their product when promised.
Your beta testing received very encouraging results and with a few minor tweaks you are ready to go conquer the world. During your testing you’ve noticed that the product is applicable to a market that is beyond your initially thought target and there is a very good chance that the demand will be huge. This could be good news only if you properly plan for all of it and Technical Implementation stage will guide you for the things to plan for.
This stage of the development cycle is used to test the product on a smaller market and improve the product based on real user experience with it. Software companies often offer free versions of the software to its first beta testers in exchange for feedback. Also getting your product into the hands of early adopters could be very beneficial for your later marketing efforts. This segment of the market is often very influential and other users will follow their lead.
So you’ve got a product idea and your concept development and testing went better than expected. Before you get overexcited and start your full fledge production you will need to do a few more steps in order to ensure that your product is going be successful in the market.
In the previous new product development (NPD) chapters we discussed the process of idea generation and screening. Now I will elaborate a process of creating a prototype called Concept Development & Testing phase.
Businesses of any size will create products with IP embedded in them, and considering the IP-related issues at the appropriate times in product development will benefit the business.