The 6 Stages of the Product Development Process and Best Practices to Follow

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New products are dreamed up everyday — but only a few actually enter the development process.

A product’s journey from idea to production is a long one with multiple potential pitfalls. Those that properly follow the six steps of the development process have a better chance of success.

On a basic level, new product development (NPD) is the process of creating and building a new product, from the ideation stage all the way to launch. It often starts with a “aha moment” where an idea for a product takes hold. That idea then begins a long and winding journey where product development strategy meets creativity to produce something that is useful, has a market and is potentially profitable.

New products hitting the market aren't rare. NielsenIQ estimates that an average of 30,000 new products are launched every year. However, far more never reach the market due to any number of reasons.

The successful products usually have a few things in common, like thoughtful research, market insights and following the product development process.

What to Consider Before Developing a Product

Product development requires significant time and costs and should not be taken lightly. Products that succeed have significant thought and research put into them. These questions should be answered —and answered well — before dedicating resources to a product.

Is there demand for the product?

Without a target audience that has a need your product can fill, a product is unlikely to succeed. That great idea you have needs to be challenged and show what this product can do that other products can’t and why someone would want to buy it.

Answer, “why would someone buy my product instead of another?”

Can it be produced?

For physical goods, what is the manufacturing process? Can it be produced in a single location or will parts need to be produced in multiple locations and then assembled in another? What’s the cost?

Digital goods, of course, have an advantage here, but even those need significant IT resources to store and deliver products to vendors or customers.

How do I get the product to potential customers?

Logistics are hard, expensive and cumbersome to set up for the first time. Developing efficient shipping processes that deliver products within a reasonable time frame are key to the customer experience and profitability.

Again, digital products are different and less burdensome, but also require significant upfront costs to secure storage and bandwidth.

What competition currently exists?

Products that succeed have significant amounts of market research around them. Fully understanding the market challenges and opportunities you’re about to step into is paramount.

Are potential competitors better or less capitalized than you? If your product succeeds, what are they likely to do? Are you able to effectively compete long-term against established companies with significant resources?

Do you have the necessary financial resources?

This may not mean just having enough on-hand to get off the ground, but rather enough to produce goods and compete for the short- and long-term. It doesn’t have to just include your own financial resources, either. Potential investors or loans should also be considered.

The 6 Stages of Product Development

Product development is naturally uncertain. Building something that doesn’t yet exist doesn’t come with a manual. However, there are natural stages that the new product development process takes that can bring some order to the chaos.


This is the first stage of the product development cycle, where brainstorming and idea generation happens. There will be tons of thoughts and ideas — and yes, some of them will be bad. There should be healthy idea screening.

However, by focusing on customer problems, understanding why these problems exist and engineering a type of product to solve them, good ideas will break through.

Research and planning.

In the next stage, feasibility studies and product concepts are done at this stage. Significant business analysis into the target market, target customers, market need and other factors that may impact a product’s success must be done.

User requirements are finalized, value propositions are outlined and designs are refined in response to feedback so that products better meet customer needs. You may consider a SWOT analysis (strengths, weaknesses, opportunities, threats) to help guide the product roadmap.

Here, engineering is finalized and concept development and testing is done. You should be able to clearly communicate what a product does, how it functions and show mockups. The product needs to have a list of materials that will be required to assemble it and how components fit together. You should also have a formalized business plan and an understanding of how much it costs to create a product and develop general pricing ranges.


You will create your first finished product, to be used as a sample and template of the final product. You’ll often need to bring in outside help from the development team, which could be anyone from software engineers to carpenters. You’ll learn much from this stage as products often go through multiple failed attempts before validation and a fully-functioning product is completed.


After the prototype is completed, fully test it to understand how it actually works. Is it working as you expected or are there some unexpected surprises? Stress test it, solicit customer feedback, complete test marketing and see if it can hold up to heavy or lengthy use. These findings will inform future versions and will help ensure future products hold up when used by customers.

Product development.

Here, you will work with manufacturers and logistics providers to actually build your product. This may be mass production or more limited, but your product is now actually being created and prepared to take to market. Products will need to go through a validation stage to ensure quality.


You’re ready for product launch and now you need to support it with a marketing strategy, backed up with key performance indicators and metrics. You’ll need a marketing plan to get the word to potential customers, support existing users and ensure that manufacturers continue to deliver new products.

It’s the final stage of the product development process, but it does not end until the product reaches end of life.

Best Practices for the Product Development Process

Good product design starts with an empathic approach to customer needs. What are their frustrations? How can your product make their life better? Start the process with a customer-first mindset to deliver something that the end user actually wants and will benefit them.

Also, always approach new products with a humble mindset and frequently solicit outside input. You may THINK this is what customers want, but if their feedback says otherwise, don’t be married to your ideas and be willing to change. Never work in a vacuum.

Lastly, be realistic about timing. It’s not at all uncommon for the product development process to extend far past what you originally intended. Innovation takes time. Accept that the timelines you originally drew up weren’t reflective to the real world environment.

Stakeholders Involved in the Product Development Process

The short answer is anyone affected by your product. The long answer is more complicated.

Common stakeholders include:

  • Sponsors: These could be executives within a company or investors.

  • Internal teams: Sales, marketing, IT or others may be impacted by a new product.

  • Suppliers: These may include materials, manufacturers or logistics providers.

  • Customers: The end user has a vested interest in your product.

Other Methods of Product Development

The deliberate, six-step process described above isn’t the only one to follow. Product development is complicated and there is no one prescribed method of doing it.


Agile product development leverages development methodology in which work is done in short cycles called sprints. These cycles are typically two weeks and break down larger work streams into smaller parts.

After each sprint, feedback is solicited so each iteration builds off the learnings of the previous. Though agile can be used for any product, it is most often used for software development.

Minimum Viable Product (MVP).

When prototyping, you may consider reducing expectations from a completed version to a minimum viable product (MVP), which is a version of the product that works well enough for customers or investors to understand what a product will do. MVPs are often released to understand market interest and solicit feedback on what works and what doesn’t.

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The Final Word

The product development process is littered with potential stumbling blocks and opportunities to fail. It involves trying to do something that has never been done before. However, by leaning on what others have done before, you’ll at least have some guidelines on how to navigate the process, if not a full instruction manual.

New products are hard to make, but following a logical process and familiarizing yourself with case studies of successful product launches brings some level of guidance to a journey that lacks a map.

FAQs About Product Development Process

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