Why is product development important? Well, it's not just important. It's a critical process to retain and maintain customer loyalty and be able to contend in the today's financial service situation. With an effective product development, customers and providers gain essential insights from the interaction and this helps the provider in better realizing the desires of its customers.

All product development undergoes a parallel planning process. Although the process is continuous, it is imperative that companies pause and weigh up each step to see whether the product to be developed is worth the effort and investment. The company should have a specific array of criteria from which to base its assessments.

In product development, creativity is a valuable plus point. The company must be imaginative in coming up with ideas for the business. It must be able to develop fresh ways of attacking marketing problems. The company must secure these ideas and assess if they are worth spending more time and energy in.

When ideas are already available, the next segment in the process is to define the concept. This is how the company turns the idea into an actual business opportunity with the projection of required investment and estimated return. The company must set specific standards and purpose to base from to decide whether it must pursue the investment. Questions like "Is the idea technically feasible?", "What are its effect to existing products?", "How will it affect the market competition?" must be answered.

The next stage in the product development process is the development of the concept. Usually, the initial step of this stage involves the definition of the requirements of the clients. Then, the transformation into some structure of channel or model service follows. The idea is to translate the recognized customer needs into probable response to these needs. In the actual application, the development and design of the product will carry on into subsequent processes as the product is polished and can be released to the marketplace.

The testing and finalization of the concept then follows. This stage involves a controlled release of a product for manufacturing; support and sales organizations are then done to test and improve the product. In this process, the company would determine whether the concept was erroneous, the target market is frail, and the product must discontinue considering the anticipated cost of releasing it into the market.

When the product has been approved in the testing stage, it is now ready for its full launch. This is perhaps one of the most arduous and costly stages. This chapter includes the development of the market, the right channels, the support of the product, and the building up of the volume of production.

Finally, management of the life cycle must be worked out. Usually, it is not recommended to handle a product that is waning in the market, or lengthen its life with a "kicker". When this action is not properly planned, the call for the development of new products is frequently prompted by declining sales. If this happens, the company may not have ample time to have new products developed.