Creating new products (part 2)

While the first stage in planning new products addresses product development conceptual issues, the second stage is one in which the company has a pretty good idea of what they want to make and are already starting to test in the field the potential profitability of the product:

1. Marketing Research

At this point, the company has a pretty clear idea of what the product will look like, what the features and design will be. So, the only reasonable thing to do is see if it appeals to the public. For this reason, companies take surveys on various demographics categories and in different markets in order to see where they stand. Most of the times, the company is not involved directly – instead, it contracts specialized agencies that have the information and the infrastructure needed to conduct surveys by a diversity of means.

2. Small-scale production

Once the results show that the product will be a hit, or at least profitable, companies start production on a small scale. That’s because they’re not yet convinced the product will actually sell. So they only start production and distribution on markets involved in beta testing.

3. The Beta testing

Usually, companies will use two different markets for their Beta tests. The markets are usually cities comparable in size and demographic characteristics. That way the company can avoid other variables influencing the results of the testing phase.

During Beta tests, companies market their products as planned during the first stage of product development. At the end of the Beta test, financial officers will calculate the sales and evaluate profits. At this point the decisions factors in the company will meet with project managers and discuss whether the product should be sold on other markets as well.


Planning and creating new products is an expensive endeavor – in terms of time, financial, and human resources. However, the potential benefits outweigh the costs, and not cutting corners will ensure you are at least positive whether your product idea would have been a success or a dud.