Product Development

1. Idea Generation

• Description: This is the initial phase where the goal is to generate as many ideas as possible for new products or services. This can involve brainstorming sessions, market research, customer feedback, and analysing competitors. Ideas can come from various sources, including employees, customers, market trends, or even technological advancements.
• Purpose: The objective is to explore a wide range of possibilities without immediately judging their feasibility. This stage is about creativity and gathering a broad spectrum of ideas that could potentially fill a gap in the market or offer something new and innovative.

2. Idea Screening

• Description: Once a large pool of ideas has been generated, the next step is to evaluate them critically. This involves assessing each idea's potential market appeal, feasibility, alignment with the business’s strategic goals, and potential return on investment. Criteria might include cost, time, technical feasibility, and how well the idea meets customer needs.
• Purpose: The purpose of this stage is to filter out the less viable ideas and focus on those with the highest potential. It helps prevent wasting resources on ideas that are unlikely to succeed or align with the company’s objectives.

3. Concept Development and Testing

• Description: In this stage, the screened ideas are developed into detailed concepts. A concept is a more refined version of an idea, describing the product in greater detail, including its features, target market, and unique selling proposition (USP). These concepts are then tested with potential customers through surveys, focus groups, or prototype testing to gather feedback.
• Purpose: The goal is to validate the concept with real customers to ensure there is a demand and to refine the concept based on feedback. This stage is crucial for identifying potential issues and making adjustments before moving forward.

4. Business Analysis

• Description: This stage involves a comprehensive analysis of the business aspects of the product. It includes estimating the cost of production, projecting sales volumes, pricing strategies, profit margins, and assessing the overall financial viability of the product. Risk assessment is also conducted to identify potential obstacles and challenges.
• Purpose: The aim is to determine whether the product is financially viable and to ensure that it aligns with the company’s financial goals. This stage provides the data needed to make informed decisions about whether to proceed with product development.

5. Product Development

• Description: At this stage, the product concept is transformed into a tangible product or service. This involves detailed design work, prototyping, and rigorous testing to ensure the product meets quality standards and customer expectations. For physical products, this might involve creating samples, while for services, it could involve pilot programs or trial runs.
• Purpose: The purpose is to refine the product until it is ready for market launch. This stage is where the theoretical idea becomes a real, market-ready product. It also involves making adjustments based on feedback from testing and ensuring that all technical and operational aspects are in place.

6. Market Testing

• Description: Before a full-scale launch, the product is tested in a real-world market environment. This might involve a limited release in select markets or with a specific customer segment to gauge the product’s performance. Feedback from this stage is used to make final adjustments and address any issues that arise.
• Purpose: The goal is to validate the product’s market readiness and make any necessary last-minute changes. This stage reduces the risk of a failed product launch by ensuring that the product meets customer expectations and performs well under real market conditions.

Product development can include:

• the development of a completely new product or service
• the adapting an existing product (line extension)
• creating a product very similar to a competitor’s (me-too product)

The focus of this course is for you to work in pairs or groups of three to develop a new hospitality product and service. You will work closely with your tutor in working through the options and concepts which could be used to take a concept through the six stages of product development, and you must ensure your tutor approve that your concept is appropriate before you go too far.

The product or service you develop could be related to any aspect of the wider hospitality industry: this could be a new food or beverage product, a travel and tourism service or anything in between.

Now is the time to start thinking of some ideas which you would like to consider and begin the research process for those ideas. Here are a few ideas to get your thinking going:

• Food and Beverage Concepts
  • Artisan ice cream
  • Ready-to-eat meal
  • Specialty coffee blend
  • Craft beverage with health benefits or indigenous New Zealand ingredients
• Accommodation Concepts
  • Eco-friendly accommodation package
  • Cultural experience tour
  • Luxury glamping experience
  • Wellness retreat package
• Travel and Tourism Concepts
  • Adventure tourism package
  • Personalised travel itinerary
  • Food and Wine tour in your local area
  • Sustainable transport solution

Remember: these are just a few ideas to start your thinking – the possibilities are endless! So put your thinking cap on and note down the ideas which come to mind. You’ll be able to discuss this with your classmates and your tutor as you work through the practicalities in class.

Once you have generated some ideas which excite you and which you think the New Zealand hospitality marketplace is waiting for, it’s time to run them through the screening process. This is step 2 in the six-step process we summarised previously. To evaluate the potential of your ideas, you need to consider them dispassionately and without the emotional impact you might feel. Emotions tend to mask rational thought, and just because an idea is cool and sounds great to you, the marketplace may not share your excitement. For this reason, screening your ideas in terms of feasibility, strategic alignment and return on investment is a critical step to minimise risk and maximise potential.

You’ve reached the end of the learning material for this topic. You should now have completed the first 2 steps of the six-step development process and have identified an idea for a product or service which meets the criteria for further development. Make sure this is completed before moving on to the next steps.