What Is Product Innovation Development And Why Is It Important?

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Innovation,

POSTED

February 21, 2022

Product Innovation Development simply refers to the innovation of a new product or the improvement of an existing one. It is a feedback-driven and efficient method of rolling out products into an open market. Depending on the industry it serves, it can be a process innovation (Ford’s assembly line) or a radical innovation (cloud computing). So, why is product innovation development necessary?

 

Necessity Of Product Innovation Development

 

The obvious reason for innovation is customer satisfaction. In a survey conducted on the importance of innovation, 83% of customers were ready to pay more for innovations in existing products. Thus improving products or releasing new ones is the way to survive.

Product innovation is beneficial to companies too. Product improvement has the bonus of a pre-existing market carved out for you. This reduces costs for R&D, predicting market reception, etc. Moreover, it creates a loop in the system. The more products you deliver, the more feedback you get, the faster your next innovation develops. In fact, 35% of companies believe customers are their biggest “innovation partners”. So it is a win-win!

 

Strategies For Product Innovation Development

 

Nothing can guarantee 100% success in your product innovation, but some strategies can make the process less risky.

 

The Customer Is Always Right - The Customer-Centric Approach

 

As hundreds of companies aim to serve the same demographic, customer approval is the driving force in innovation. The customer-centric approach takes the following steps:

  • Conduct customer surveys. Find out their likes, dislikes, shopping habits, needs, etc.
  • Compare survey results with other data points like their social bracket, financial statistics, gender, etc.
  • Based on your research, develop a prototype for your product.
  • Test the market by small releases or by offering free trials.
  • Adjust as per market reception.

Now the question you may ask is, “How do I adjust my product after its release?” This brings us to the next approach.

 

Learning From Your Mistakes - The Fail Fast Method

 

In the fail-fast method, companies allow products to ‘fail’ on the condition that the lessons learned from the failure will contribute to its eventual success. For example, up until 2010, Zomato was a food directory website called Foodiebay. They tested the market and adjusted their branding to create Zomato - a company valued at $13.3 billion.

The biggest advantage of the fail-fast method is the acceleration of the feedback loop. Traditional business models suggest doing a thorough research and refining each aspect of a product before releasing it. The issue with this approach is that the demands of your customers might change drastically by the time you perfect your product. The fail-safe method creates a dialogue between you and your audience and allows space for innovation and tweaks.

Another advantage is that this approach gives a message to your employees: failing is okay. This incentivizes them to think out of the box and suggest better innovations. Did you know that companies that listen to employees are 21% more profitable than their competition? Clearly, product innovation is a team effort. Hence, these strategies only work when people join hands to create something for the betterment of society.

Do you want to know more about innovation development? MIT ID Innovation is here for you! Our courses in innovation and design are hand-crafted for students wanting a future in business. Innovations tomorrow, MIT ID Innovation today.

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