Product development is simple in concept. It is the:
- Conversion of market need to a reality-based solution
- Creating the tangible from the intangible
- Creation of new wealth
The success of product development efforts typically require considerable resources and the opportunity for lackluster results or outright failure are far higher than anyone will admit. Because of this high risk of failure, it is important to know why product development is important to companies and society.
Why Product Development is Important
Product engineering, is the life-blood of companies and societies. The product could be a physical product such as an automobile, smartphone, or coffee maker. It could also be services such as
new IT solution, new manufacturing process, or a new real estate marketing concept.
All successful product development actions provide the following:
- New value for customers
- Improved society
- Continued existence of the company
New Value for Customers
The first and most important reason for any new development is to provide new value to the customer. Without this, there is no reason for them to trade their money for the new device. However, if the product or service offers overwhelming value, then customers will flock to it.
This new and increasing value is what keeps companies growing. If there is no new value to offer customers, the firm wilts and eventually dies. If the value offered is not increasing, then the company is losing ground in the market as its competitors increase their value in the market.
Many new products are simply an incremental improvement over the previous version with only some new features or slight faster performance. These products may sustain the company by offering enough new value to generate additional revenue, but they are hardly a boon to society.
There are certain instances where new products will improve society beyond just the immediate gratification of the consumer. Example of these are innovative new drugs to treat debilitating diseases and automotive safety devices that save hundreds of lives per year. Neither of these may offer the consumer swift satisfaction, but they save lives and therefore improve society.
Continued Existence and Growth of the Company
New products and services are the lifeblood of any company. Without them, the firm withers on the vine and either dies or is absorbed by another firm. Society is well-served by the continuance of these companies from the employment of the individuals who work there (who are also consumers), and the support for society at-large in the form of taxation and charitable giving.
Companies (and civilizations) have little choice but grow and improve if they want to move from survival to thriving. The new products and services created and provided by companies of all sizes provide the mechanism for this growth and improvement. What are you and your firm doing to improve?