How Products are Chosen for Development

By Mike Anderson
Published on: March 24, 2017

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This is a 6-part series.  For Part 1 – Vaporware Wars – Go here.

Most integrators have provided at least one product idea to their favorite supplier, and wonder why the manufacturer doesn’t see the brilliance and immediately start building the product.

As I mentioned in the last article, building a new product is a challenging process.  Today, we’ll talk about why some products are “chosen” and others never get beyond the idea stage.

For manufacturers, new product ideas come from lots of places – internally, sales people, engineering staff, service department, tech support and even the guys on the shipping docks have ideas.  Customers always have something new they desperately need.

Most manufacturers will explore every idea, no matter the source.  There are some preliminary hurdles that must be overcome for a product idea to move to the next stage.

The first question is always “Do we think customers will want this?”  This is answered by floating the idea to a few people, first inside the company and then with key customers (that means the guys that buy significant amounts of product).

If the idea passes this first sniff test, a Product Manager is assigned to create a product definition.  This is a document that essentially says what the product is, what problem it solves, and how it solves that problem.  This document will also have some preliminary cost targets and sales forecasts.  Some companies have formal processes with different names for this document, for example, Marketing Requirements Document (MRD) or Product Requirements Document (PRD), while others have less formal processes and scribbles on napkins are sufficient for them.

This document is then reviewed by management to determine if it is a project that should move to the next stage.  Ultimately, the question always becomes “Is this profitable? Can we get a better return on investment putting the money this will cost somewhere else?”

Often, an otherwise great project will get set aside because, just like in your business, resources are limited.  Another project may have a higher priority for any number of reasons.  Building a new product is a lot more expensive than most people realize.  We’ll start to get into those costs in the next article.

So . . . don’t question your brilliance.  Keep proposing ideas.  Make sure that the company understands why your product idea needs to be built.  Make your case in a way that communicates that it will be profitable for the company.  They will appreciate your input, and you may just get that new widget.

For Part 3 – Investigation – Go here.

Mike Anderson

Mike Anderson

Mike is the CEO of AVidea Group, a firm that provides product development service for consumer technology companies. Previously, he was founder and president of TiO, and worked in the industry for notable manufacturers Russound, Niles Audio and JVC. He holds an MBA from Cal State.

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