Not sure how to get to grips with the product development process? Learn how to avoid all the pitfalls before launching your cannabis goods or services!
Product development is extremely important for any cannabis-related business. Most businessmen are passionate about the idea of creating and releasing a new product, which competitors do not have and that will be in great demand in the market. However, a new product is only an idea unless you can transform it in something that really matters and offers a unique solution to customers’ pain points. That is when product development comes in handy. If you are eager to know how this approach can help your cannabis goods become a top choice for your potential clients – keep reading!
What is product development?
Every entrepreneur starts their journey with an idea for a brand-new product. Bringing an abstract concept into the real world is often the biggest hurdle that entrepreneurs face. The series of stages that a business performs to launch a product on the market is called product development. It is also referred to as new product development (NPD), since it typically refers to a new product, even though it can also refer to existing products with ingredient changes. Essentially, product development is the process of bringing an idea to life.
Why Is Product Development Important for Your Cannabis Business?
A business will thrive or fail depending on the quality of the products it produces, and your cannabis business is no exception. Product development for cannabis company is important because it analyzes market competition, product safety, health regulations, and effective marketing options.
- Know your market
Who are your top competitors? Product development requires you to research your competition and understand your product’s strengths and weaknesses with the help of a prototype and a test group. In an emerging yet saturated market like the cannabis industry, thorough knowledge of your competitors is essential.
- Market safely
What is the best formula to use so that health and safety regulations are respected? Product development will involve careful product evaluation by an expert team, prototype creation and repeated testing. These processes will ensure your product is just right before launch.
- Know how to market
Developing a new cannabis product can be tricky. Cannabis has both medicinal and recreational properties, appealing to different types of people for quite different reasons. What demographic are you planning to target with your new product? What is the best branding needed to market this product to the right demographic? Product development will help you answer all these questions with multiple marketing and branding trials.
The cannabis business market has already become saturated – an effective product development strategy can make your business stand out.
The 7 Steps for Effective Product Development
So, what are the steps your cannabis business should take for effective product development? You can break down this process in 7 essential steps:
- Idea Generation
This step not only involves the creation of an idea for a product, but also the initial market research and audience analysis needed to evaluate the viability of the product. One of the most popular methods used to analyze a product idea is the SWOT technique: to evaluate the idea’s strengths, weaknesses, opportunities, and threats.
- Idea Evaluation
Also known as idea screening, this step ensures that the product idea is as suitable as it can be. It involves sharing the idea with the rest of the management team in order to evaluate affordability as well as ROI. Idea evaluation is essential to analyze the marketing potential of the new product.
Once given the green light by the team crunching the numbers, it is time to put the idea to the test. How will your target audience respond to the product idea? Idea testing will have you gather data from your targeted demographic before the product is even created. All you need is a set of questions, a sizable demographic group, and an NDA.
- Business Strategy Analysis
This step involves analyzing and deciding on the branding, marketing direction, and profitability of the new product, among other factors. This analysis is essential to make the product successful!
- Product Development
This is when things get interesting, as the first prototype of your product is created. Having a tangible product to look at will allow you to finalize and apply marketing and branding strategies previously discussed.
- Test Marketing
Once both positive and negative feedback from the prototype has been evaluated, it’s time to start the marketing process. Your company should sell a pilot batch in small market coverage. It analyzes how consumers react, what factors influence the decision to purchase, how the price of a product affects sales, etc. Based on the data obtained, you can develop a prospective marketing plan. Perhaps you need to provide your target audience with some free samples of the product to get real-customer reviews and correct product features before launching it.
- Product Launch
The product is completed and finally ready to be sold! This final step will usually involve consultations and deals with advertisers and distributors – so it’s still not the end of the road.
Product Development Strategy: 4 Key Components
Here are the four key components to keep in mind for a successful product development strategy:
You should know who your customers are. Who are you making the product for? Fully understanding your customers’ needs and dislikes guarantees there is a market waiting for your product launch.
Chances are, your brand-new product already has a competitor. Researching your competition and analyzing their successes and failures will inform how to position your product in the market. Is your product the answer to your competitor’s shortcomings? Or will it offer more value for a fraction of the price?
Get acquainted with the numbers as soon as possible in the product development process. Having a clear picture of your product’s ROI will reduce the possibility of loss of investment.
- Macro Environment
The macro-environment refers to all economic, political, technological, and cultural forces that could affect your product in the long run. You should account for all emerging markets and technologies, market fluctuations, and behavioral trends when launching a new product. Stay ahead of the curve!
Product Development Example
Looking for a blueprint? Bloom is an example of a business that has done new product development right. Following the 7 steps we previously mentioned, here are the main reasons why:
Idea Generation – Bloom’s development team is always busy and brimming with creativity, reviewing thousands of new product ideas a year.
Testing – Multiple versions of new products are created before deciding on the final one, with multiple members of the team having their say.
Test Marketing – The funnel process continues with hundreds of ideas out of the initial endless ideas ending up in consumer tests.
Launch – Finally, 8-10 products end up being released.
Of course, Bloom is a well-established company with generous resources, but the 7-step guide can be followed by even small-scale cannabis businesses to bring about incredible results. If you have been struggling to bring your innovative ideas to life, consider this blueprint since it might be the key you’ve been looking for!