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A key to the long-term success of a product line is the product leader's ability to quickly and accurately shift their viewpoint from the details within one of the phases to looking at the whole life of one product or of a complete portfolio of products. Every product has five distinct phases of life. Each of these phases has characteristics that make them unique and challenging. Taken together, they represent the total life of the product.

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These five phases are:

1. Discovery
2. Definition
3. Development
4. Delivery
5. Decline

This article explains the Five Phases of Product Development and provides guidance to maximize the performance of each.

Discovery

The first stage in a product's lifecycle is what I call Discovery. This is the point where the product executive begins thinking of a product concept and starts investigating the market, customers, potential customers, competitors, and her own products.

One of the best starting points is to consider the question, 'what would I buy?' This begins to put you in your customer's frame of mind and opens you to developing concepts that you otherwise may not consider. This type of thought process lends itself to the Socratic method or '5 Whys' of problem-solving. The product you develop must solve a problem, real or perceived, that the customer believes needs solving.

The next place to look is at the market and your product's potential rivals. This is not the time for an in-depth competitive comparison but an overview of many possible competitors to get an idea of how the problem is currently being solved. Once you've narrowed your product and market, we will go back and do a thorough review of the applicable competitors during the Definition phase.

It is also the time to talk to your customers, potential customers and your sales force. Your goal is to begin to validate some of the assumptions you made during the previous two steps. These can be brief conversations held at a high level. You will do more in-depth VOC or 'Voice of Customer' interviews during the Definition phase. For now, seek input to help you discover the market's needs and wants. There will be time later to delve into the details.

Definition

You now have a concept of what to create for your customers. It is time now to define the concept in a tangible manner. There are as many formats of achieving this as there are product leaders. The common name for the document that defines the requirements of the market is the Market Requirements Document or MRD.

The MRD is broad in scope– it demonstrates how the product will be used by the customers and how the development and sale of the product will impact your company. Write an MRD assuming that it will be delivered in document form only with no ability to discuss it with the engineers, production team, or the finance and sales departments. This thought process creates a long, detailed treatment of the subject matter and is very helpful when working with a geographically diverse team.

The typical market requirements document explains the product functionality, the typical customers, and use cases for each customer. This is the minimum list of what should be included:

• Customer requirements
• The look, feel, and operation of the product, aka 'industrial design'
• Product quality requirements
• Regulatory requirements are also included
• Business model or business case for your firm
• Restrictions on production location
• The production cost or standard cost
• Cost of development
• Available to ship date
• The sales price or prices if selling through multiple channels
• Estimates of annual sales quantity by channel

Development

The critical phase of the whole product development cycle is the Development phase. This phase is where all of the 'magic' is created. The information you gathered, compiled, studied, interpreted, and communicated is now being converted into a tangible product. It is an exciting and daunting time.

This is an exciting time because 'your' product is being created from nothing but words on a page. This is one of the most incredible parts of being a product manager. The privilege of working with customers to learn and define their needs that then lead to the creation of the solution.

It is daunting because this when the 70% to 80% of the entire project budget will be spent. It is also the period where the largest and most significant schedule delays will occur. Delays increase the cost of the project due to labor and engineering expenses associated with additional prototyping and testing. More seriously, delays cause lost sales that can never be recovered.

Delivery

Delivery is the phase when your product is taken from the development lab to a production-ready product ready for sale. The preparation for this phase normally starts early in the development phase, especially if the technology involved in the project is leading edge.

During the previous phases, most of your time was spent developing your ideas with internal and external customers. This delivery phase is the opportunity to learn, in detail, how the supply chain functions within your firm. The supply chain for your firm is a complex system that converts basic raw materials into your product. The total supply chain consists of the all of the production phases of each material that is used in the creation of the part you ordered. This chain can be months longer than the lead-time your final supplier or your own factory quoted you. This can become important when you need to rapidly increase production volume. . .

Delivery will include many if not all of these phases:

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• Procurement
• Assembly
• Product test and verification
• QA (quality assurance)
• Packaging
• Inventory Management
• Shipping

As in the development phase, these are complex operations. Most of these processes will require weeks or months to develop and can be cutting edge themselves.

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I continue to recommend that all product development and product leadership personnel spend a year or two in some sort of a manufacturing role. It is important to understand the technologies and methodologies that go into producing the types of products you intend to design and market.

Decline

It is inevitable that the popularity of your products will decline. This is a normal occurrence that is normally a gradual decline, giving you the opportunity to properly plan for its replacement. There will be instances when a competitor launches a product that causes a large drop in your sales and profitability. Fortunately, these events rarely occur.

The importance of this phase of the product lifecycle should not be overlooked. This phase begins just after the profitability of the product peaks. The time to the peak and ultimately to discontinuance varies depending on many factors: A few of them are:

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• Type of market
• Technology
• Economy
• Regulatory changes
• Cultural changes
• Competition

Regardless of the cause of this decline, some changes will have to be implemented to maintain and grow your portfolio of products. The first step in the process begins with determining what is causing the decline in sales. The list above is a starting point.

The root cause analysis may show that your competitor has developed a product that costs the user 20% less to own and operate. The competitor accomplished this by using a new technology that your firm is investigating. You could choose to start development of a new product that will compete with the new offering. This will cast you as a follower in the market–a common strategy. Success as a follower depends on how long it takes you to get the new product to market.

You could also choose to maintain your sales volume in the short term by lowering your selling price. You might be able to this because your development team is only a few weeks away from a ground-breaking new product that will change the market, thereby converting your competitor into a follower.

These are common decisions made during the declining phase of a product's life. The earlier the planning for the decline begins, the more options you have when the market shifts or when you decide to cause the shift. Choosing to be a market leader or market follower is normally a corporate-level strategic decision. It is your responsibility to grow your product line, but the corporate needs outweigh those of your products. Product and technology roadmaps are excellent tools for planning this growth. They typically show a three-year forecast of launches and product development across multiple product lines.

In summary, the phases of any product's lifecycle can be divided into five phases.

1. Discovery
2. Definition
3. Development
4. Delivery
5. Decline

These phases each have characteristics that make them unique and challenging. Taking the broad view, they represent the total life of the product. Learning to shift your viewpoint from details within a single phase of a product's life to the total life of a single product or a portfolio of products is key to the long-term growth of your business unit.

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