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We live in a fast-paced and competitive market where turning an idea into a successful product is crucial. This journey begins with product commercialisation — the process of transforming an idea into a product or service that resonates with consumers.
As new trends and consumer needs emerge, businesses wish to capitalise on them, making product commercialisation necessary. However, that is not only a product life cycle phase; rather, a product management process that goes through multiple stages. These stages include market research, product development, marketing, and distribution, all focused on connecting with customers and differentiating the product from competitors, ultimately ensuring it meets customer needs.
This article will explore product commercialisation to help you convert your new ideas into commercial success.
Product commercialisation is introducing a new product or service to consumers, turning them into paying customers. It’s a mix of operations and strategies that transforms an idea or prototype into a functional and marketable product or service. Developing a product involves many phases, which includes market research, design and development, manufacturing, and marketing and sales, all of which are important in this process.
A commercialisation strategy outlines how to bring a product or service to market. It takes into account the business environment, the target market, distribution channels, and other crucial factors. Businesses having a successful product commercialisation strategy may see higher revenue, a larger market share, and increased brand value.
The product commercialisation process needs effective planning and implementation throughout the supply chain, and if managed efficiently, can give your business a sustainable competitive advantage. Developing and launching products rapidly and efficiently pushing them into the marketplace is important for long-term business success.
However, it takes a lot of cross-functional efforts and coordination among your company’s departments, like product team, marketing team, etc. to earn the amount equivalent to the investment you made in the product development process.
The key challenges for all markets are the same irrespective of the industry. The common challenges include knowing your customer or target audience’s preferences, deciding where to innovate or apply new technology, understanding if you can accumulate or invest funds to scale your operations, and finally produce on a large scale.
There are many benefits of a well-defined commercialisation strategy. Here’s how it can help your product make profits:
This is an integral part of the product development journey, as it can be difficult to develop products that resonate with your customers without understanding your target audience. A solid strategy involves extended research of the target market, the competitive landscape, and customer preferences, enabling you to match your products with the exact needs of your consumers. Proper segmentation and positioning not only help you connect with the right audience segments but also help identify untapped opportunities.
For all brands, the management of expenses and distribution of resources is critical. For small businesses and startups, these becomes important to examine, especially when it comes to team activities in marketing, product development, distribution and sales. A written plan enables effective resource management, reducing losses while maximising gain.
Bringing a product that solves your customers’ pain point to market quickly is crucial. Product launches increase a company’s revenue by nearly 25% in the first year. Perform competitor analysis to understand your market share and consumer preferences.
This can help you stand out in your product category and helps come up with unique products that others don’t offer. Making strategic alliances with companies that complement your business can turn your competitors into collaborators.
All successful companies face risks while growing. So, doing an early identification and responding accordingly to these risks gives you better strategic control and clarity for your risk tolerance and operational excellence. Nonetheless, you can immensely increase your odds of product success by performing market validation tests and protecting your intellectual property through partnerships and patent filings. Therefore, keep your approach always more flexible in the face of change for highly positive outcomes.
There are various components that need to be engaged in the product commercialisation process. Every component demands a unique skill set to turn creative ideas, technologies, or products into commercially marketable entities.
In the distribution and supply chain management phase, it’s essential to use an efficient means for distribution and perfecting the supply chain to ensure that your product reaches the consumers on time and in one piece. Figure out efficient distribution channels and optimise logistics to ensure timely deliveries. This helps increase customer satisfaction.
Market research and analysis is highly important for understanding consumer, market and competitive fluctuations. It involves identifying target demographics, assessing market demand, and analysing competitors.
Pricing your products viably can be tricky. You can adopt cost-plus or markup pricing where you price your product after adding the overhead expenses. This pricing strategy involves adding a fixed percentage to the total cost of making a product or service to determine its selling price.
For example, let’s suppose you run a fashion wear business; a sweater costs INR 1,710 and you want a 50% markup, the sweater then will be priced at INR 2,565.
The formula for this is (Total production cost) × (1 + Desired profit) = Selling price
Besides, penetration pricing, premium pricing, or value-based pricing are some of the different pricing strategies you can use.
In a crowded market, where results are filtered and processed, solid product and positioning differentiation will be important. This could include writing a unique value proposition, listing key features and benefits, and positioning the product in a way that appeals to the target market.
Create awareness through marketing and promotion, as these activities are significant in driving adoption by creating product awareness. This involves creating an integrated marketing strategy and utilising a multi-channel approach like digital marketing, social media, and traditional advertising and successfully carrying out promotional campaigns.
You need a strong sales strategy and an effective execution plan to convert leads into customers. This includes training the sales team, sales scripts, and an acquisition and retention strategy.
Regulatory Compliance Review in the product commercialisation process is the key to avoid hurdles in launching the product. It involves knowledge of applicable legislation, acquiring required certification, and a comprehensive log of compliance activities.
As we explore each of the different stages, keep in mind that commercialisation is not a one-size-fits-all process. It requires a tailored approach depending on your product category and target audience.
Marketing is one of the key components of commercialisation, a primary function that helps business discover and understand a target audience. This stage includes market research, customer analysis, and developing a marketing plan. With constancy to message, product location, and era advertising, organisations can expand awareness, entice customers, and generate demand.
This step focuses on incorporating the tech aspect that supports the product or service. This might be software development, hardware engineering work (if it is a hardware offering), or other technical facets of the offering. The tech has to be strong, dependable and meet customer requirements. Continuous innovation and technological advancement are necessary for a business to keep running and remain competitive in the market.
It is the stage where visuals turn into reality, and technology turns into a concrete product or service. These consist of the following 2M framework: Product Development Process (PDP): Design, Prototyping, and Production Refinement to ensure high quality, variability, and waste reduction. Engineers work closely with the tech teams to take ideas and turn them into real products, considering things such as materials, manufacturing processes and regulations.
Capitalisation involves securing the funding necessary to follow the path to commercialisation. This stage involves reaching out to prospective investors — namely Venture Capitalists or Angels investors or applying for government grants. Businesses have worked hard on capitalising so they can write off marketing, technology growth, engineering and production costs while building the groundwork to double and grow.
The production phase involves setting up production facilities and coordinating supply chain and quality assurance. They revolve around cost, inventory, and delivery schedules. By offering reliable and consistent delivery of products or services, businesses can start to build customer trustworthiness and loyalty, giving them a head start in the race for future success
Shiprocket’s product delivery services are perfect for businesses to succeed in their product commercialisation journey.
Product commercialisation is the supply chain management process which provides a structure for developing new products and bringing them to the market jointly with customers and suppliers. Effectively materialising this process enables your company’s management to coordinate the smooth flow of new products across the supply chain. It even helps supply chain members to focus on manufacturing, logistics, marketing and miscellaneous related activities to support the commercialisation of the product.
Therefore, every business needs product commercialisation as a regular function. It involves several linked processes that will have their own tricks and turns – be it market research or product development. Careful monitoring at all steps is required. Reputable and reliable companies like Shiprocket can help you manage this process like a breeze. Get in touch today.
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