Product innovation is the one thing that can make or break a business. It’s not just about coming up with new ideas; it’s about executing those ideas and making them into realities.
The product must be something people want to buy at a price they are willing to pay. There are many factors involved in product innovation, but here are some essential pieces of advice for succeeding when innovating your product:
- Know what you’re trying to do
- Understand who you’re trying to sell it too
- Implement a test and measure approach
- Commit to continuous improvement
- Research how similar products work and how customers perceive them
Every product is different, and every business situation is unique. But some universal pieces of advice will help you succeed when innovating your product:
Know what you’re trying to do: Figure out the specific problem or need which this new product addresses for its target customer base. What concrete benefits does it offer? What will its target customer base find valuable about these benefits?
Understand who you’re trying to sell it to: Know what sets this product apart from the competition. What does your new product do better than any other similar products on the market? If there are no competitors, make sure that you know why customers will want to buy your product.
Implement a test and measure approach: Test your assumptions by running experiments to validate the product before investing too much in it. Don’t be afraid of failure: even if all or most of your tests fail, that information can help you pivot and change course to not repeat mistakes with future products.
Commit to continuous improvement: Customer feedback is a valuable asset. Always be open to new ideas and look for ways to improve your product.
Research how similar products work and how customers perceive them: One way to do this is by observing customers as they interact with competitor products.
What Does Product Innovation Mean For Your Business?
Product innovation will never be accessible, but the rewards can be worth it. In addition to making your company more attractive and thriving in a competitive marketplace, innovations provide increased opportunities to engage with customers on an emotional level through stories and experiences.
Consider product innovation as part of your business plan, not a risk that needs to be avoided at all costs.
In other words, product innovation means creating new assets that are not yet in the marketplace. This can be done by adding a new function or value to an existing product that has previously been launched, creating something new or different from what has been done before, and developing a new product.
You can also read our blog posts about Product Innovation Ideas and Benefits
Product innovation examples
Apple’s AirPods – Apple took a product that had been in the marketplace for decades and innovated with new features like wireless connectivity.
Shazam App – Shazam is an app that allows you to identify songs by simply holding up your phone or tablet to the speaker of any song playing.
Father.ly – Father.ly is an app that offers curated content for new fathers and helps them with all the challenges they might face during their child’s first year of life.
How Does Product Innovation Affect Your Business?
Product innovation can affect a business in many ways. It can help grow your customer base by increasing the size of your product line. It can also increase the price you’re able to charge for each item, which means a more significant profit margin and higher revenues.
The Impact Of Innovation On Your Business
Every business is different, so many factors might impact how product innovation affects your company’s bottom line. These include:
What types of products you sell – product innovation is about adding new features, improving an existing product, or developing a new product. Innovation is one area that could help your business grow and diversify its product line without breaking the bank.
The size and complexity of your product line – In some cases, innovation can be more cost-effective than just beefing up inventory to meet demand.
Your overall strategy – Product innovation can be an excellent strategy to help business compete.
Which of the following best illustrates a process innovation as opposed to product innovation?
- Adding new features to an existing product.
- Developing a new product for the business.
The answer is: Adding new features to an existing product. Process innovation, as opposed to product innovation, refers only to improve how your company does things internally rather than externally (e.g., developing a more efficient production process).
Product Innovation: innovative products are new to the market, with no direct competitors and often a brand-new product category.
Process innovation: process innovations improve how your company does things internally rather than externally (e.g., developing a more efficient production process).
What is Product Development?
The stage of new product design occurs after the conceptualization and before commercial launching.
A process of developing a new product, including engineering costs, manufacturing strategy, quality control plans, and any necessary financing for production or marketing.
The stages of the process are as follows:
Stage One: new product Idea stage includes research and planning, including prototyping, risk assessment, etc.
Stage Two: the concept design stage includes product engineering and design which may include prototyping, testing with a focus on marketability and production feasibility factors, including manufacturing
Stage Three: production testing includes pre-production tests of products in the form of prototypes as well as post-production tests for manufactured goods to analyze how they stand up in the real world after fabrication
Stage Four: marketing and sales include product launch or re-launch, sales reports, market feedback. Feedback may be used to make changes for further production runs.
Stage Five: the product retirement stage is when a product has been phased out of availability due to low demand or obsolescence
A product innovation strategy should be aligned with business objectives. The company must determine if product innovation is their primary goal or whether they are looking for a short-term boost to increase market share.
Product Innovation Strategy
The strategy may vary based on the industry sector but typically includes three stages of research and development (R&D) before launching a new product. The first stage, idea generation and experimentation—R&D may consist of brainstorming new ideas for product innovation or tinkering with an existing product to see if improvements can be made. The second stage is ideation- R&D typically includes preparing prototypes to validate the functionality of a design before launching any experiments on the market. The third and final stage is developing a business plan to ensure product innovation aligns with company goals.
Product Innovation Options
Companies can also innovate by improving an existing product that they already produce or extend it in some new directions. This may be done internally (within your organization) or externally through partnerships with other companies, suppliers, or customers.
Product innovation is a challenge no matter what industry you’re in. The road is fraught with detours and roadblocks. The crash-and-burn stories are legendary, and the fear of failure can haunt even the most intrepid of enterprises that dare to innovate. But those who take on risk reap an equally great reward: success.
To stay on top of the game, you must be willing to take risks. There is no shortage of success stories out there that will inspire and motivate you as a company to keep your eyes open for innovation opportunities. We can help! Subscribe now to get our monthly newsletter about product innovation challenges, so your next product launch will be successful too!
Related Article: Implement Lean Management to Realize Gains from Innovation