By Larry Goddard, Laurence Franklin and Jennifer Goddard

Growth is the lifeblood of every business. Without it, companies stagnate, lose market share, and eventually fade from relevance. Among the many levers of growth—new customers, new markets, acquisitions—few are as powerful, enduring, and universally accessible as new products.

For middle-market businesses in particular, new products are often the difference between incremental growth and transformational breakthroughs. A well-designed innovation can energize your brand, open doors to new customers, deepen relationships with existing ones, and position you ahead of competitors.

That said, new products sit higher on the SOAR Growth Engine™ difficulty scale. Compared to strategies like expanding wallet share with current customers or acquiring new customers, product innovation demands more time, investment, and organizational alignment. It’s riskier—but also capable of delivering outsized rewards when executed well.

Creating new products is more than just a flash of inspiration; it’s a disciplined process that requires vision, strategy, and execution. This article explores the types of new products, how to decide what to develop, the steps of product development with a stage-gate approach, how to test and launch, and why managing the product lifecycle is as important as introducing new offerings in the first place.

The Six Types of New Products

Not all new products are created equal. They range from simple enhancements to radical innovations that reshape industries—each with different levels of difficulty, investment, and risk. Understanding this spectrum helps leaders choose the right opportunities for their growth stage.

1. Incremental Products (Easiest)

Improvements or enhancements to existing offerings.

• Examples: Toothpaste with whitening benefits, detergent in upgraded “easy-pour” packaging, software with a new reporting feature.
• Why it matters: Keeps offerings fresh and competitive while preventing competitors from winning on small advantages.
• Difficulty & Cost: Low—builds on existing products and infrastructure, making it quick, affordable, and low risk.

2. Extensions

Variations of the same basic product or service—new sizes, colors, flavors, or formats.

• Examples: Levi’s introducing new fits and colors, Coca-Cola Cherry Coke, a restaurant adding seasonal menu items.
• Why it matters: Expands choice, increases market share, and attracts new customer segments without reinventing the wheel.
• Difficulty & Cost: Low to moderate—requires additional production and marketing, but leverages existing brands and processes.

3. New Uses

Applying existing products or technologies in new ways.

• Examples: Aspirin repositioned for heart health, Tesla leveraging battery technology for home energy storage.
• Why it matters: Extends the life and profitability of existing assets, often with minimal technical reinvention.
• Difficulty & Cost: Moderate—lower technical investment but may require new marketing, positioning, or regulatory approval.

4. Adjacencies

Related products that complement the core offering.

• Examples: Adidas moving from footwear into apparel, Apple expanding from computers into accessories like AirPods.
• Why it matters: Builds on brand equity to deepen customer relationships and increase share of wallet.
• Difficulty & Cost: Moderate to high—often requires new capabilities, supply chains, or expertise, but benefits from established brand trust.

5. Disruptive Products

Innovations that fundamentally change how markets operate.

• Examples: Netflix shifting from DVDs to streaming, Uber transforming local transportation.
• Why it matters: Redefines industries and can propel companies into leadership positions.
• Difficulty & Cost: High—demand major investment, organizational change, and customer education, but potential rewards are transformative.

6. Completely New Products (Hardest)

Entirely new offerings that create their own categories.

• Examples: 3M Post-it Notes, Apple iPhone, Tesla Model S.
• Why it matters: Can deliver iconic status and enduring competitive advantage.
• Difficulty & Cost: Very high—requires invention, market education, and significant investment, with high risk of failure but equally high upside.

How to Know What Products to Develop

Creating new products begins with insight—understanding customer needs, market trends, and your own capabilities. The best opportunities lie at the intersection of these three.

1. Customer Insights: What problems are customers facing that current solutions don’t solve?
2. Market Trends: Where is the market heading—technologies, demographics, regulations, cultural shifts?
3. Core Capabilities: What does your company do exceptionally well? Innovations succeed when they build on strengths.
4. Competitive Gaps: What are competitors ignoring or under-serving?
5. Profitability Potential: Which concepts support long-term margins and growth?

Stage-gating begins here with Gate 1: Idea Screening, where leadership reviews whether a proposed idea aligns with strategy, demand, and feasibility. Weak ideas are killed early, strong ones move forward.

The Stage-Gate[1] Process for Developing New Products

Unlike ad-hoc innovation, stage-gating structures product development into phases with decision checkpoints (“gates”) where leadership decides whether to continue, revise, or stop the project. This balances creativity with discipline and ensures resources flow to the best opportunities.

Stage 1: Idea Generation

Ideas flow from customers, employees, competitors, or market research. At Gate 1, leadership screens them for strategic fit.

Stage 2: Concept Development

Ideas are turned into clear concepts—descriptions, sketches, or mockups. At Gate 2: Concept Gate, teams ask: Is this idea attractive enough to warrant deeper investment?

Stage 3: Feasibility and Business Case

Technical feasibility, financial models, and market sizing are developed. At Gate 3: Business Case Approval, leadership evaluates ROI, risks, and alignment.

Stage 4: Design and Development

Prototypes or minimum viable products (MVPs) are created. Cross-functional teams iterate on design, features, and costs. Gate 4: Development Gate determines whether the prototype is strong enough for external testing.

Stage 5: Testing and Validation

Pilot programs, focus groups, beta releases, or market tests validate customer interest, price points, and usability. Gate 5: Validation Gate decides if the product is ready for commercialization.

Stage 6: Launch Preparation and Commercialization

Final production, marketing campaigns, and channel readiness are locked in. At Gate 6: Launch Gate, leadership gives the go-ahead for full-scale rollout.

The stage-gate model ensures discipline: resources aren’t wasted on weak ideas, and promising innovations are backed with confidence.

How to Test the Viability of New Products

Testing is critical before committing to a full launch. Options include:

• Focus Groups: Feedback on concepts or prototypes.
• Pilot Programs: Limited launches with select customers or regions.
• Surveys and Interviews: Testing price sensitivity and interest.
• A/B Testing: Comparing features or offers in digital products.
• Pre-Sales and Pre-Orders: Gauging real-world demand before large investments.

Stage-gating ensures that products can’t move past the testing stage until viability is demonstrated with real data.

The Launch Process

A great product can still fail without the right launch. Launch is where the “air force” of brand and marketing and the “army” of sales come together.

1. Positioning: Define the promise—what it is, who it’s for, why it matters.
2. Internal Training: Sales, service, and operations teams must be prepared and aligned.
3. Marketing Campaigns: Digital advertising, PR, sponsorships, trade shows, thought leadership, and direct outreach create buzz.
4. Channel Readiness: Distributors, partners, and retailers equipped with materials and inventory.
5. Customer Education: Demos, tutorials, and FAQs reduce adoption friction.
6. Post-Launch Tracking: Monitor adoption, usage, and satisfaction for quick adjustments.

The final Launch Gate is critical—leadership must confirm readiness across production, marketing, and sales before going live. Skipping this step is one of the most common causes of failed product introductions.

The Lifecycle of Products

Every product has a lifecycle. Recognizing where each sits allows better planning for investment and divestment.

1. Introduction: High investment, low revenue, need for awareness.
2. Growth: Rapid adoption, improved margins, rising competition.
3. Maturity: Growth slows, competition increases, differentiation weakens.
4. Decline: Sales fall, costs rise, obsolescence looms.

Stage-gating doesn’t stop at launch. Products should be reviewed periodically at lifecycle checkpoints—asking whether they should be refreshed, upgraded, redesigned, extended, retired, or sold. This discipline prevents resources from being tied up in products that no longer generate strategic or financial returns.

Conclusion: Growth Through Disciplined Innovation

New products are engines of business growth. They come in many forms—from incremental tweaks to disruptive breakthroughs—but all share one thing: they keep companies competitive and customers engaged.

The key is discipline. The stage-gate process ensures only the best ideas advance, resources are allocated wisely, and cross-functional teams stay aligned. From idea to launch to retirement, stage-gating provides a roadmap that balances creativity with rigor.

Growth belongs to companies that treat product development not as a gamble, but as a core capability. Those that master stage-gating, market testing, and lifecycle management will be the ones that turn innovation into sustainable growth.

©Copyright, 2025. The Parkland Group, Inc. All Rights Reserved.

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[1] “Stage-Gate®  is a registered trademark of Stage-Gate International.