Look around your home. Most of the items that line your shelves likely went through a product development life cycle—a process that starts with idea generation and ends with public release of the polished product.
Whether a product is a sophisticated computer or a bar of soap, it’s uncommon that the item went from fleeting idea to on-the-shelf product within a matter of days. Most items have a long path from initial concept development to product launch.
The product development life cycle helps businesses plan how they’ll manufacture, sell, and launch a new product. This guide shares an overview of the process, the factors that may affect it, and best practices to consider when developing new products.
What is the product development life cycle?
The product development life cycle (PDLC) refers to the stages that track how a product goes from an idea to a viable commercial good. It starts with an initial product concept followed by market research, planning, prototyping, sourcing, assessing costs and prices, and a commercial introduction.
Product development life cycle vs. product life cycle
The product development cycle is a precursor to the product life cycle, a longer process that includes every stage from idea generation to commercialization. Picking up where the development cycle ends, product life cycle describes the product’s progress from introduction to the market to its eventual decline and even discontinuance.
The product life cycle has four stages:
- Introduction. This is when the product comes to market.
- Growth. Marketing campaigns ramp up, the customer base expands, sourcing and manufacturing become more efficient, and the product may be tweaked for improvements.
- Maturity. The product reaches its maximum market share.
- Decline. When the product line may wind down or be sold to another company.
What are the product development life cycle stages?
- Ideation
- Market research
- Planning
- Creating a prototype
- Sourcing and costing
- Sales and marketing strategy
- Create the final product
- Product launch
- Monitor and improve
The product development life cycle involves specific milestones as a product progresses from a concept to a commercially available item. Here are the nine stages:
1. Ideation
Ideation is when a product development team pitches product concepts. They might pursue a competitive advantage by plugging gaps in the marketplace and addressing customer needs that no existing product seems to fulfill.
Product teams may use this stage to consider limiting factors such as sourcing and production costs, but this stage places concepts front and center. The goal is to explore all potential product ideas.
2. Market research
In the market research stage, the development and marketing teams identify a target audience for the new offering. The goal is to make sure a market exists for your products before you head any further into the product development process. Market research includes surveys, focus groups, industry reports, news articles, and interviews.
“I think getting feedback from the community is one of the most important things to do,” says Nick Wiseman, cofounder of hummus brand Little Sesame, on an episode of the Shopify Masters podcast. “You really start to get an understanding of product market fit. Are you solving a problem and is it a product that people want?”
Market research can start with assumptions about what potential customers want, but you should always follow it up with concept testing, where you present product ideas to a test audience and solicit user feedback.
Established companies often target their existing customers for product research because these customers are already in the business’ sales funnel.
3. Planning
Next, the company’s product management team develops a roadmap to align all stakeholders, from the design and development teams to the sales and marketing teams, around a common plan for bringing the new product to market.
The product development team considers how to make the product efficiently and affordably. Meanwhile, the marketing team strategizes how it might place the product in front of the right types of customers.
4. Creating a prototype
Prototyping is an early version of your product that you likely won’t release to customers. However, a prototype gives you the chance to see and interact with your idea.
The prototyping process can be expensive but necessary to evaluate and improve your product before you commit to full-scale production. Whether you make a DIY prototype or order one from a manufacturer, you’ll need a product that has enough functionality to mimic real-world usage.
This stage of the product development life cycle is also a great time to run:
- Product tests to ensure safety, customer satisfaction, and quality assurance.
- Feasibility studies to determine the viability and practicality of your new product.
You may have to create multiple prototypes before you land on the right design. That was the case for SURI, a brand that sells electric toothbrushes with plant-based heads. “We did quite a few iterations—probably like 20 iterations before we launched,” cofounder Gyve Safavi says on an episode of the Shopify Masters podcast. “We did testing with dentists and sustainability experts early on.”
5. Sourcing and costing
Once you have a good prototype, turn your focus to the supply chain: the raw materials, vendors, shipping logistics, and resources necessary to create your product on a commercial scale. It helps validate product ideas that are worth investing in.
It can be a time-consuming process. For Zachary Quinn, founder of Oceanfoam, a foam roller that derives from algae, it meant reaching out to many possible partners. “I went out to as many producers and manufacturers of foam rollers as possible, mostly through Alibaba, and reached out to get samples,” Zachary says.
This production planning stage should also detail how you’ll warehouse and ship your finished products. For larger companies, this may require a dedicated project management team.
Costing is important at this point. Estimate your cost of goods sold, including expenses such as raw materials, factory equipment, and labor. You’ll also factor in the logistics of shipping, storage, and import fees if you use overseas production. Once you fully account for your costs, develop a pricing strategy that lets you make money over the long run.
6. Sales and marketing strategy
A sales and marketing plan outlines how you’ll launch your new product, including the key messaging you’ll use to sell the product to consumers.
Start with your marketing plan—a document that outlines the objectives your team aims to meet, the channels you’ll use to promote the new product, and your total marketing budget. This road map sets the vision on how you’ll launch the product and make your first sale.
A sales plan works similarly, but focuses on how you’ll proactively reach out to your target audience. The action plan could include the outline of a good lead, how many leads you’ll reach out to, and how many conversions you expect.
Both sales and marketing plans need consistent messaging. If you’re launching a new skin care product but each department tells consumers about different unique selling propositions, for example, you can confuse potential customers.
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7. Create the final product
By this point of the product development life cycle, you’re making the final touches to your product before launch. Gather all of the feedback you’ve collected thus far, whether it’s results of your concept tests or costs from suppliers, to perfect the final product.
8. Product launch
A successful product launch is a team effort. Sales, marketing, customer success, and production teams must be on the same page to deliver a consistent message to the market.
If you’re worried about the product launch—which can happen if you’re developing an entirely new product that’s vastly different from your current assortment, for example—consider a prelaunch. This gives you the opportunity to gather customer feedback from a smaller group of people before your product is available to the public.
“Before we launched, we did a prelaunch campaign, which was early access if you sign up,” says Danny Buck, co-founder of jewelry brand CRAFTD, on an episode of the Shopify Masters podcast. “We did that for about two weeks before we actually launched so that turned it into actual email addresses, which obviously then we can then use in the future.
Danny adds this approach "was quite useful for the next drops, but because we were actually selling out, it created more demand for the next one.”
9. Monitor and improve
At this point in the product development life cycle, you are producing the item at scale. You may be shipping it to retailers or selling it directly to consumers via your ecommerce store. Your marketing plan is now up and running. All that’s left to do is monitor the response.
Use customer feedback tools such as Zigpoll, Grapevine, and POWR to monitor customers’ reaction to your products. You can also use social listening platforms to learn what people are saying about your new products, even if they don’t directly tag you in the post.
Monitoring can help you refine your products. For example, Leah Marcus, founder of Good Girl Snacks, initially launched a line of pickle jars that contained larger cucumber slices. She learned post-launch that customers wanted smaller gherkins. The product has since evolved to include many more smaller pickles in a jar—each is crunchier and saltier than the original variation.
What factors can affect the product development life cycle?
Outside factors beyond one’s control can knock things off course even for the most seasoned product development teams. These include:
- Negative customer response. Concept testing or prototyping may reveal that customers don’t like your product. You have two choices in this situation: collaborate with customers to make improvements based on their feedback or scrap the product altogether if it’s no longer commercially viable.
- Supply chain limitations. You can only manufacture a product at scale if you have access to an adequate supply of raw materials, equipment, and workers. Without them, you may need to alter the product design or suspend manufacturing. Work on bolstering relationships with your vendors to prevent these from wreaking havoc on your product development process.
- Shipping issues. If you’re sourcing goods or parts from different regions, you’re at the mercy of shippers. Failure to receive items on time and at a reasonable cost can derail production, sales, and deliveries. Diversify your shipping partners and suppliers to reroute products if you experience these delays.
- Misaligned priorities. A successful product launch requires alignment between your development and design teams. Your products should be functional, aesthetically appealing, and created with a specific target market in mind. Make sure your teams share these priorities.
New product development best practices
- Leverage artificial intelligence
- Test demand through preorders
- Ensure legal compliance
- Know when to quit
Here are a few things to keep in mind as you go through the product development life cycle:
Leverage artificial intelligence
Product development can be a long, time-consuming process. Many entrepreneurs turn toward artificial intelligence (AI) as a way to speed things up, make smarter decisions, and ultimately launch better products.
Here are some example use cases of AI in product development:
- Market research. Whether you’re working with a small sample size of customers who are willing to share their feedback or looking at years’ worth of statistics, AI can interpret datasets, such as market trends and customer data patterns, to validate products before you progress further into the product development life cycle.
- Product design. Let AI create a digital prototype of your product, instead of trying to explain the features or draw it up yourself. You can send this diagram to manufacturers to create the first physical iteration of a new product.
- Usability testing. Instead of testing product prototypes manually, use a generative AI app to simulate a real-world testing environment. You can identify potential problems without putting the onus on your customers or team to test each product manually.
- Task automation. From data entry to writing up the results of your tests, use automation tools to remove manual tasks from your plate.
Test demand through preorders
Product development is expensive. It’s possible to invest thousands of dollars into a new product you think customers will like, only to get radio silence when the product goes to market.
Market research and thorough planning can help identify these risky projects during the development process. But if you’re still taking a gamble on a new product, test demand with preorders.
Preorders let customers place an order upfront and receive their shipment at a later date. Not only can you get cash upfront to invest into development, preorders also let you see how many quantities you need to make to meet demand. Just be aware that if you axe the project after accepting preorders, you’ll need to refund any customers who’ve already paid.
💡Tip: Accept pre-orders on your Shopify store with apps like Preorder Wolf and Notify.
Ensure legal compliance
Cosmetics, food, electronics are some product categories that have extra red tape that online sellers must meet before their products can go to market.
Check that your new product meets these regulations throughout the development process to prevent costly rectifications later on. The last thing you want is to completely reformulate your new skin care product if the FDA disapproves one of its ingredients, for example.
Now’s also a good time to patent your new product. The application process can span several months, but by applying for a patent during the development process, you’ll be one step closer to protecting your intellectual property as you push closer to launch.
Know when to quit
You’re excited about a new idea or concept, but as you get further into the product development life cycle, you may begin to learn that it’s not as commercially viable as you originally thought.
Don’t be afraid to axe projects with no clear future. This happens more than you think: 40% of all new products never make it to launch. It might seem like a waste of resources to abandon ship after you’ve got to the prototyping stage, for example, but you’ll waste even more by pushing onward with a product that customers won’t purchase.
Product development life cycle FAQ
What are the stages of the product development life cycle?
The nine stages of the product development life cycle are:
- Ideation
- Market research
- Planning
- Prototyping
- Product sourcing
- Sales and marketing plans
- Final product production
- Launch
- Monitoring
What is the typical product development timeline?
The product development timeline can span a few months to upwards of years, depending on the complexity of the project. It involves stages such as market research, production planning, prototype development, concept testing, and launch.
Does the product development life cycle typically involve multiple iterations of each stage?
It is possible for a product development lifecycle to involve multiple iterations of a stage. For instance, an initial prototype may fail to impress potential customers, which means the product team will repeat the prototyping stage.
How does the product life cycle impact new product development and innovation within a company?
The product life cycle helps brands gather feedback and make improvements. You can assess whether the product meets your customer’s needs, identify competitor impact, and uncover areas for innovation—key steps in helping brands become more innovative.
After a new product is launched, what is the next step of the product development process?
The product development process continues with monitoring after a product launch. At this point, the goal is to gather feedback from the customers to identify areas for improvement.
Is it important to continually evaluate and improve a product after its launch?
Businesses monitor their products after they launch with an eye to durability and safety. They also consider customer feedback, whether that’s suggestions for improvement or unexpected use cases. By continually adjusting a product to address durability, safety, functionality, and customer satisfaction, companies can increase the lifespan of the product line.
