Product Development Strategy for Dial a Delivery
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Introduction
Product development strategy refers to a calculated move that uses market research as the foundation to create a plan for the success in the sale of a product. At its core, Soltani-Fesaghandis and Pooya (2018) and Nurcahyo, Akbar, and Gabriel (2018) define product development strategy as an approach referring to the different actions and methods used to bring a new product to a market or even modifying an existing product to develop new business. Product development includes a number of steps including idea producing and the distribution of products to the target market. Every stage in these processes requires a specific strategy for success and for revenue generation (Cooper, 2019). The aim of a product development strategy is to help a business in overcoming obstacles and assist in focusing on the most successful approaches. In this section, the product development strategy for Dial a Delivery will be analysed, including a presentation of the stages necessary to achieve success of the product and the perceived benefits of having a product development strategy. Since the product development strategy is tied to the overall corporate strategy, Dial a Delivery will have a means to reduce risk within the larger product concept development process and will improve its fit between the product offered and the targeted market in Australia.
Product Development Strategy for Dial a Delivery
The product that Dial A Delivery intends to push into the market is an online application and platform that allows users (customers and companies) to order deliveries at a touch’s convenience. Now, customers will be able to pay and follow delivery of various goods faster on their phones and mobile gadgets. In order to achieve success in the marketplace, Dial a Delivery must map out an approach first. In its product development strategy, the digital platform developed a step-by-step plan which would allow the developers and marketers to move the product forward at every stage from its conception to launch (Kuka, 2018). Before the new product was initiated, there was the idea of the digital platform. The idea was to make it easy for users to “summon” a driver which means having a personal driver without the need to pay for a full time employee. Before this, many ideas were generated until the business came up with this digital platform because it was the most suitable out of other ideas. Dial a Delivery is a proprietary on demand delivery platform that connects individuals and entities that want to deliver a package with a delivery person. Generally, deliveries are for local areas only. Dial a Delivery is a new product which is classified as a major innovation.
Major innovations are those that are totally new in the market (Coviello & Joseph, 2012). New technological developments are used to create them in order to provide new experience to the users. In this case, Dial a Delivery is a platform that connects delivery people and those who want to deliver, something that never existed in the market before, especially for rural Australia and for the socially disadvantaged groups (Kelly et al., 2017). This is a new digital platform that aims to attract the same customers who want to have a new experience as far as delivery is concerned. Dial a Delivery aims to conveniently do some of the users’ daily errands such as picking up flowers, groceries, lunch, etc. But even with this new innovation, there is still some risk because considering the fact that it is a new product, the target market might doubt its worth (Yang and Hsu, 2019). They may be hesitant to spend their money on a product that is yet to prove its usefulness and reliability. Thus, Dial a Delivery must find the best way possible to convince its target customers that this is a product that they need. Although producing a major innovation product has proved to be risky, the business can reap many benefits apart from generated profits like increased reputation among users, shareholders, employees, and potential investors (Zhang, Di Benedetto, and Hoenig, 2009). The main function that is required for the new product is online presence.
Expected Benefits of a Product Development Strategy for Dial a Delivery
Product development strategy is tied to the overall corporate strategy. Product development strategy is intended at setting the direction for a new product through the establishment of objectives and goals and funding decisions (Kalogiannidis & Mavratzas, 2020). The aim of a product development strategy is to create and gain competitive edge in the industry through the placement of product offerings in the best available positions to drive corporate goals including profits, sales growth, and revenue. For Dial a Delivery, a product development strategy will be a means to reduce risk within the larger product concept development process. It will improve its fit between the product offered and the targeted market in Australia. Additionally, a product development strategy will be important in overhauling its product line and to boost sales of the current products through enhancement of benefits (Byggeth, Broman, & Robèrt, 2007). While the overall marketing strategy and the market research are important elements, other inputs to the overall business strategy are required to result into a fully formed product development strategy including the brand, the platforms available, and the technology (Homburg, Alavi, Rajab, & Wieseke, 2017). Therefore, a product development strategy will be critical for Dial a Delivery because it will enable the creation of a stream of innovative products that will delight the target audience and lead to disruption of the competition.
Stages of product development processes
The product development process is a complex affair, one that is unique to every organization based on its needs. However, there are six stages of product development that will be applied for Dial a Delivery. They include a generation of ideas, screening and evaluation, marketing strategy, business strategy, test marketing, and commercialization. As shown in image 1 below, the process can be subdivided into smaller and more specific components, making it more adaptable to the changes that may be specific and unique to an organization.
Image 1: Summarization of the Product Development Strategy
(Source: Dam and Siang, 2018)
Stage 1: Generation of new product ideas
Before initiating the development of a new product, there must be an idea prior to its creation. The team members generated many ideas until they came up with the most suitable one (Zhang, Di Benedetto, and Hoenig, 2009). The developers thought that the market needed a platform that people would use to conveniently send packages to a recipient. In Australia, there are thousands of deliveries everyday but there are no digital platforms that people can use to make their deliveries, the developers thought that it would be a great idea to tap into that space. Apart from the internal sources such as the R&D department, other external resources such as customers were used to generate ideas for Dial a Delivery. According to Azigbo (2019), approximately 40% of new product ideas came from employees, 36% from customers, and only 14% from the R&D department. Therefore, it is necessary for Dial a Delivery to empathize with users of its product in a way that is aligned to its corporate strategy and the vision to provide what the customer wants with minimal fuss and cost.
In the generation of product ideas, Dial a Delivery must include a process of identifying features that are important to consumers including a definition of the main problems faced and the best approaches to solve them. Here, Dial a Delivery should focus on the marketing problem and the management problem. The marketing problem for Dial a Delivery is how to beat the competition, limit the budget to its resources, and conquer the local market for daily deliveries. Idea generation should focus on these issues, finding the best way to stay ahead of Didi, Uber, and Lyft and devising means to keep these companies off the local delivery market. As a core pat of the idea generation stage, a strategy to gain a sense of how the customer views the world is important. It is also necessary for Dial a Delivery to limit its marketing budget in line with its resources.
Stage 2: Idea Screening and evaluation
Stage 2 involves screening and evaluation of ideas. All the ideas generated in the first stage are screened and evaluated in order to limit them to a number that the company can manage (Gürbüz, 2018). This includes most useful ideas to ease the process of product development at a later stage and to minimize the resources and time the company spends on less useful ideas. Dial a Delivery’s digital product ideas relating to the marketing problem (how to beat the competition, limit the budget to its resources, and conquer the local market for daily deliveries) that developers came up with must be thoroughly screened against the organizational and stakeholder goals in order to separate useful and less useful ideas. For example, to focus on the local market, it is important for Dial a Delivery’s to avoid using generic ideas but rather tailor-make a unique approach that will be hard to imitate for other well-established companies. Then, there are three questions that marketing experts ask within the framework of new product screening (Gürbüz, 2018). The questions are described as R-W-W “real, win, worth doing” and the answer must be “yes” for all of these questions.
Real- is there a need that customers will be forced to buy it?
Win- Is it considerable to the business in terms of benefit?
Worth Doing: Is the product compatible with the growth strategy of the business?
Design Thinking Approach
Product development strategies vary by industry, company, and some other factors. There is not a single one-size-fits-all approach that would work under every circumstance. However, there are some common components to various product development strategies (Dam, and Siang, 2018). Dial a Delivery is a digital platform, which means that the best approach to be used is the design thinking approach. It is a structure for developing a product based on viewing the world from the perspective of the user. There are several steps to design thinking approach:
Step 1: Empathize with users
The developers of Dial a Delivery came up with a strategy to see the world through the users’ eyes. They would visit companies and some homes and ask to see how they go about delivering their packages. The developers would then take note of the processes that the entities and individuals used, the amount of money they spend, and the amount of time taken to deliver a package to the intended destination. They also took note of the problems these people encountered in the process of delivering packages. For instance, a company wants to send a package to another company, so they have to call their usual delivery person to deliver the package but they are taking their time to arrive, pick it up, and then ride off to make the delivery. Worse off, the delivery person may fail to show up for one reason or another. This informs the developers that people need a reliable platform which they can use to conveniently send their packages to the recipients.
Step 2: Define the problem
After seeing how the potential users view the world, the developers were able to think through the challenges that users face. For each step in the product development strategy, the developers created a plan. First, they wrote down each pain point of the potential user identified and then they shortlisted them. Afterwards, they list was narrowed to the most severe pain points that were identified and those that they believed the team could easily and promptly develop a solution. The first pain point is the tedious and long process that potential users undergo to deliver their package. The second pain point is the lack of reliability on the part of the delivery people and the final pain point is lack of assurance that the package will arrive safely and on time.
Step 3: Brainstorm potential solutions
Structure is very important in every step of product development strategy. Brainstorming is more than just sitting around a table and thinking of ideas. There is a process around brainstorming (Dam, and Siang, 2018). Firstly, a cross-functional team was pulled together for an open session of brainstorming. Before the meeting, the developers had shared with the other team members their findings from the research done to gain empathy from the viewpoint of the users. This helped the team to understand better the type of solutions they intended to come up with and why. The members came up with different suggestions and possible solutions to the delivery problems that potential users were encountering. Secondly, the team established go/no-go criteria for every suggestion. For instance, each team member who wanted to present a product idea had five minutes to convince the other members that it is viable (Dam, and Siang, 2018). If the idea is agreed upon by the majority of the members, it advanced to the next level. That way, a pool of ideas were narrowed down to a few most viable choices. Finally, after the list of products was narrowed down to a manageable number, the members conducted a rough calculation of budget, time, and the resources that would be invested to develop the viable digital product. There was another set of criteria that helped the developers narrow down their choices of the product concepts to pursue.
Step 4: Build a prototype
At this step of design approach thinking, developers and designers coordinated to create a working version of the product concept that would be put in the hands of real users to gauge their interest level (Dam, and Siang, 2018). At this point, the developers and designers had a broad idea of the problem in the market and the big-picture strategy of the product to solve that problem. This is where the idea of Dial a Delivery came to play. The developers and the designers explained to the team how the platform would work. It was simple, if a user wants a package to be delivered somewhere, they only need to post the job on the Dial a Delivery platform with enough information and contact details. They should indicate the place and the time the delivery person should pick up the package and the place and the time the package should be delivered to. The platform will put the job out to its network of independent delivery associates on duty after which they will bid for that job and provide the projected time window for pickup and delivery. The user will then choose the person he likes, pay the delivery fee charged and they have booked the delivery. Pickup and drop-off alerts will be sent to the user by Dial a Delivery and can track the shipment.
Step 5: Testing of the solution
In the approach of design thinking, solution testing is the final step. It does not refer to internal Q&A testing. It is allowing the user personas to try the product and share their feedback of the good features and not so good features of the product (Dam, and Siang, 2018). Because solution testing is part of the step-by-step product development strategy, the developers would apply structure as well. For instance, they would establish their go/no-go metrics upfront. The viability of the product would be determined depending on the users’ feedback. If over 50% of users are impressed and would buy it, then the product is considered viable.
Stage 3: Marketing strategy
The third stage involves the creation of a market strategy for Dial a Delivery. There are three steps involved in market strategy. The first step is the identification of the market that Dial a Delivery will be sold to, the profit margins that is targeted by the digital product, and its planned value proposition (Gürbüz, 2018). Secondly, there is the identification of the price Dial a Delivery will be sold for. Some of the questions that arise in this step is who is being charged? Is it the user who wants to send a package, or the delivery associates who get jobs on the platform and at what percentage? Another important factor to consider at this stage is the marketing budget be within the first year. The third step is to identify the profit margins generated by Dial a Delivery in the long run as well as the marketing mix strategy in the long term.
Stage 4: Business strategy
There are two steps involved in creating business strategy. The first step is to project Dial a Delivery sales. This is done through market research and review of the sale numbers of similar products such as Uber, Didi, Lyft, etc. Then the risk is calculated by estimating maximum and minimum sales. Then the second step is projecting the costs and the profits. All the costs involved in developing Dial a Delivery like investments, R&D costs, marketing, operations, etc. are estimated (Gürbüz, 2018). The numbers calculated will indicate Dial a Delivery’s financial attractiveness. If business objectives are compatible with the projections, then the product will go to the next stage.
Stage 5: Test marketing
At the fifth stage, there will be test to identify how Dial a Delivery marketing will be conducted to attain the best results. Every marketing element such as the positioning of the product, target market, advertisement, etc are put into consideration (Gürbüz, 2018). The outcome of the test marketing process will help Dial a Delivery to make the necessary adjustments on the right strategy where applicable. Test marketing will provide for the best marketing strategy for Dial a Delivery before being commercialized. If this stage is passed, the business may end up facing more costs than it was anticipated and may exceed the profits.
Stage 6: Commercialization
At the commercial stage, the first thing a business should do is to determine the time and scale with which Dial a Delivery will be introduced into the larger market (Gürbüz, 2018). The deliveries are generally only for local areas. This is because introducing a new product at a much larger scale requires more resources, capacity, and confidence which only established businesses have. Dial a Delivery is required to decide on the when, the where, and the how to introduce the product to the market. Timing is very critical because of the sensitivity of the market. Additionally, it is important for Dial a Delivery to identify the strategy that will be used to launch the product. It must focus on sustainability issues as they affect customer reception today (Chang, Lee, & Chen, 2014). The sprinkler approach that allows the company to start from a single niche market going upwards gradually is preferred (Bhalla, 2013). The launch will include a gradual movement from a section of the market to others up until the entire target market is covered. Because of the presence of larger competitors such as Uber and Lyft, Dial a Delivery cannot use its limited resources to enter the entire Australian market and compete aggressively. As a result, the resources of the company and the competitor analysis require a sprinkler approach to make commercialization a success.
Suggested Product Development Strategies for Dial a Delivery
In line with the above theoretical approach, some practical strategies would apply more specifically for Dial a Delivery. It is possible that Dial a Delivery would choose to focus more on adapting its current product to the market following applicable methods used by other successful organizations such as Lyft and Uber. Hu (2020) predicts more delivery opportunities due to the COVID-19 pandemic in Australia following successful study of such practices in Canberra. However, given its resources, product, and its marketing mix, Dial a Delivery is better off creating innovations that suit a specific market. To introduce its product and retain competitiveness in the market, the following product development strategies will be useful for Dial a Delivery: changing ideas, modifying the existing product, increasing its product value, specialization and customization, creating a package deal to fight Uber’s reach in the local markets, and finding new markets.
Recommendation for Dial a Delivery
Creating a different version of its existing product offerings with slight changes relating to the target market and strategies on pricing will provide the market with motivation to buy (Vafadarnikjoo et al. 2018). Dial a Delivery will be required to modify one or more of its existing products and focus on updates in its marketing to influence customers to try improved versions of the product. The advantage of this strategy is that it focuses on understanding the features that customers want to see improved and making the necessary changes. It also means that the product will help the company to venture into areas that delivery companies have neglected in the past. For example, Barnett et al. (2017) point to a huge gap in the delivery of dental care products, an area that Dial a Delivery will most likely cover with its new product. Another product development strategy applicable for Dial a Delivery is increasing the value of its product. Companies like Uber have managed to include additional value with purchase of a product. Dial a Delivery can increase value by bundling up products, providing premium customer support, and providing premium features fir every product category. Creating additional value is also attainable through specializing and customizing products to appeal to a specific consumer group and customizing different product offerings to create personal and unique appeals (Handiwibowo, Nasution, Arumsari, & Astuti, 2020). Dial a Delivery can create a unique product by including specialized and customized features to fit different needs and to encourage users to choose a product over the competition who provide generic versions. Lastly, creating package deals and bundled products will provide additional value and encourage customers to purchase more. The strategy is very effective for a small organization such as Dial a Delivery because it will expose products offered through the package deals to the customer. Package deals such as delivery associates, delivery users, and enterprise users can be amalgamated into one bundle to increase the chances of repeat business. Other products include a marketing platform that can easily connect these three groups.
Conclusion
In this section, the product development strategy for Dial a Delivery has been analysed, including a presentation of the stages necessary to achieve success of the product and the perceived benefits of having a product development strategy. Dial a Delivery intends for its company to connect people with transport needs it markets itself as a marketplace for all delivery transactions. It competes with Uber, Lyft, Didi, Ingogo, GrabCar, GoCatch, Sherpa, and Gopeople. The discussion finds that since the product development strategy is tied to the overall corporate strategy, Dial a Delivery will have a means to reduce risk within the larger product concept development process and will improve its fit between the product offered and the targeted market in Australia. It is recommended that Dial a Delivery modifies one or more of its existing products and focus on updates in its marketing to influence customers to try improved versions of the product, and to add value, expose customers toother products, and gain competitive advantage over the competition.
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