To someone with an entrepreneurial spirit, dreaming up a product, building it, and selling it to customers is exciting. Of course, the reality of budgets, product testing, and manufacturing means that can’t happen overnight.
Still, you can start the product life cycle by drafting a product concept statement. This document will be your touchstone throughout the product development process, and it will help you decide which products are worth building and which are not.
Here’s an overview of the product concept process.
What is a product concept?
A product concept is a detailed description of a product a business owner wishes to develop. It’s part of the first stage of the product development life cycle, during which business owners consider new offerings for their target markets. Company leaders typically draft product concept statements to lay out their vision for new products and include details like features, price, and intended customers.
They use these documents to conduct product concept testing, where members of a target audience give feedback about the product features, aesthetics, and proposed price. If the concept test goes well, the business may choose to continue the product development process.
Key elements of a strong product concept
- Summary of features
- Technical aspects
- Use cases
- Target market
- Unique value proposition
- Manufacturing strategy
- Pricing strategy
- Connection to the overall brand
A successful product concept typically features eight key elements:
1. Summary of features
This could include innovative features never seen before, iterative changes to a previous model, or an aesthetic description of the product.
2. Technical aspects
A list of expected technical aspects—like expected product measurements—will help a design team plan for prototyping and production.
3. Use cases
Use this section to explain the functional value of the product. Using market research, detail how the product will address customer needs and lead to long-term satisfaction.
4. Target market
Describe the target customers who you think will get the most value out of your new product. You may wish to write a buyer persona, or a paragraph describing a single hypothetical customer, to help you visualize the exact type of person you’re selling to.
5. Unique value proposition
A unique value proposition (UVP) articulates why the product will stand out among similar competitors.
6. Manufacturing strategy
Lay out an initial idea for manufacturing the product at scale, whether that means crafting the product by hand, mass producing a global product line, or something in between.
7. Pricing strategy
Propose a price for the product based on factors like expected production costs and customer price expectations.
8. Connection to the overall brand
To project a strong brand image, explain how the new product aligns with the values of the company as a whole.
2 types of product concepts
These categories may impact the scope and nature of a product concept statement:
1. Original product concept
An original product concept used to describe a product will be notably different from anything else on the market. The first smartphones or first electric cars were based on original product concepts. They had unique features not found in any product prior to their existence.
2. Augmented product concept
An augmented product concept describes a product built off an existing product but offers new features or design improvements. If the first smartphones and electric cars were original product concepts, the next year’s models were augmented product concepts. By striving for continuous improvement, a business can roll out augmented product concepts on an ongoing basis. For instance, a new version of a product might be made from cheaper raw materials, such as bamboo instead of wood pulp. This can improve a business’s bottom line while still providing a quality product.
An augmented product concept might also frame a new product offering in the context of a customer’s experience. For instance, it might explain how a more affordably priced version of an existing product will appeal to a price-conscious consumer. Or it might explain how a product such as a high-end apparel item could signify social status to a customer.
How to develop a product concept
- Identify your target market
- Conduct product research on existing items
- Identify your product’s unique selling proposition
- Craft a manufacturing plan
- Estimate pricing
- Plan a marketing strategy
Start your product development process with a well-articulated product concept statement. This will help anchor your process as you pitch your colleagues, test your concept, work toward a finished product prototype, settle on a final product, and build it at scale. Use this six-step plan to effectively tackle the product concept process:
1. Identify your target market
New product concepts only succeed if there is a product-market fit. Start your process by visualizing the ideal customer for your new product. Perhaps they are a member of your existing customer base. Perhaps they belong to a new target audience your company wants to reach. By creating a buyer persona for the exact type of person you want as a customer, you can hone in on which product features to highlight in your marketing materials.
2. Conduct product research on existing items
Be aware of the current market offerings your target audience has to choose from. Do competitors offer a product that is similar to your concept? What are the strengths and weaknesses of their product? Product research will help you strategically choose features, pricing, and a marketing philosophy that help you stand out from the pack.
3. Identify your product’s unique selling proposition
Your unique selling proposition (USP) is a distinguishing feature that makes customers choose your business and your product over other options. Perhaps you make an incredibly long-lasting leather belt or the world’s strongest coffee blend. Perhaps you have the lowest price or the best-looking product. Define your USP and lean into it.
4. Craft a manufacturing plan
Your product concept should include details about how the product can be manufactured at scale and turn a profit. This section of your product concept statement might include information about supply chains, equipment, shipping, and labor needs.
5. Estimate pricing
Your price point will play a big role in whether your new product can find an audience and be profitable for your company. Set a price point that balances these competing needs. You may find it easier to estimate a price point if you’ve manufactured similar products in the past. If you’re entering a brand-new product space, you can conduct research to see what similar products sell for.
6. Plan a marketing strategy
Consider how you’ll pitch your new product to prospective customers. Your marketing campaign won’t just highlight your product’s features, it will also resonate with the types of people you identified in your target market research. What marketing channels does your target audience turn to most frequently? Social media? Search engines? Email newsletters? These are the channels where you can showcase your product and connect with potential customers.
Example of a product concept
To see how a product concept functions in the real world, consider the case of the Taylor Stitch workshop. Taylor Stitch is an ecommerce clothing retailer. It has many competitors, but the brand has a unique “workshop” model where it rolls out every new item as a product concept that customers can crowdfund.
It works like this: Taylor Stitch posts a product prototype on its website, and if customers are interested, they can preorder the product. If the company receives enough preorders, it will make that product a reality. Once the product is in production, members of the general public can buy it on Taylor Stitch’s website. (If the crowdfunding campaign doesn’t meet its goal, the product doesn’t get manufactured and contributors get their money back.)
While we use Taylor Stitch as an example of a product concept, it isn’t a “pure” product concept because the team makes a prototype, so buyers are able to see the finished product before ordering (vs. not creating anything until demand is evident via the orders). Still, it’s an example of bringing a product concept directly to a customer base and letting those customers decide whether or not the product should advance.
Product concept FAQ
What is the main focus of a product concept?
The main focus of a product concept is to hone in on an idea worthy of the long process of designing, prototyping, manufacturing, shipping, and marketing an item.
What problem does the product concept aim to solve?
The product concept process aims to prevent you from manufacturing a product with fundamental flaws. In the process of concepting a product, you have opportunities to weed out issues that might cause a product to fail in the marketplace.
Is branding and positioning relevant to a product concept?
Yes, branding and positioning can be highly relevant to a product concept. Products succeed when they resonate with their intended customer base. Thus, a product concept must account not only for product design but also for how the product will directly appeal to its target audience.