Product Life-Cycle – The Development Phase
In the development phase of the product development life cycle, we are generating ideas for the product. We see opportunities in the market place and wish to explore if we can capitalize (not a vulgar word) upon these opportunities. Perhaps a new technology has become available to us. Our organization will want to investigate the application of that technology toward existing businesses. Maybe it is a new market. Perhaps the organization is looking from an entirely new application perspective. At any rate this phase starts off by idea generation and rigorous critique of those ideas to guide the development to the product (or eliminate the idea of the product).
This critique is facilitated via prototyping and reviews of designs. Concurrently with the development of the product we will develop our manufacturing capabilities and critique that development work as well. All of which, will guide our design or final product instantiation and manufacturing processes.
We will also need to get some information on the product from our would-be customers. These are the people who will make it possible to generate a business case that is beyond mythical and more tangible. The business case will help us understand the design scope and specific incarnations to achieve our desired profitability margin. This profit calculation will be based upon:
1 the volume of customers testing indicate we can expect
2 the cost to make and deliver the product (includes manufacturing and delivery)
3 the selling price of the product
The selling price is also derived from the volume calculation as there will be some volume implication due to the customer sale price (higher price can reduce number of customers). We will garner as much data as we can via market testing to arrive at this optimum selling price. Ultimately at the end of development we have a product that we will move on to the next step – introducing the product to the market place in earnest (as opposed to learning the desired particulars of the end product from prospective customers)