Commercialisation and Productisation

Turning Ideas into Market-Ready Products

Taking an idea from concept to a market-ready product is a complex process that involves multiple stages, strategic decision-making, and overcoming various challenges. The disciplines of commercialisation and productisation are essential for turning innovative concepts into profitable products, whether digital or physical. This article explores strategies for navigating the commercialisation and productisation journey, from concept development to market validation, scaling, and lifecycle management.

Understanding Commercialisation and Productisation

Before delving into the process, it's important to distinguish between commercialisation and productisation:

Commercialisation refers to the entire process of bringing a new product or service to market, encompassing everything from initial research and development (R&D) to sales, marketing, and distribution.

Productisation is the act of refining a concept or technology into a marketable product that can be repeatedly sold to customers. It involves shaping the product’s features, packaging, pricing, and delivery method based on market needs.

Pro Tip: Both commercialisation and productisation are critical for transforming an idea into a tangible product that meets customer needs and achieves market success. Treat productisation as the foundation that supports commercialisation efforts. If a product lacks essential features or doesn’t meet market needs, even the most effective commercialisation strategy won’t achieve long-term success.

Strategies for Moving from Concept to Commercialisation

Market Analysis and Validation

One of the first steps in commercialisation is understanding the market landscape. Conducting a thorough market analysis helps identify target customer segments, understand competitors and validate the product's value proposition.

Identify the Target Market: Define your ideal customer profile based on demographics, preferences, and purchasing behaviour.
Competitive Analysis: Assess competitors' strengths, weaknesses, and market positioning. Identify any gaps or opportunities that your product could fill.
Validate the Concept: Gather feedback from potential customers using techniques like surveys, focus groups, and minimum viable product (MVP) testing. Early validation helps confirm demand and avoid costly mistakes.
Trend Analysis: Monitor industry trends to ensure the product remains relevant. Consider factors like technology advancements, regulatory changes, and shifts in consumer behaviour.

Pro Tip: Test assumptions with real-world data. What you think customers want and what they actually need may differ. Early validation reduces the risk of investing in the wrong direction. Regularly update your market analysis, especially during longer product development cycles. This ensures your strategies remain aligned with evolving market conditions.

Product Development and Design

Turning the concept into a functional product involves several steps, including design, prototyping, and iteration based on user feedback.

Prototype Development: Create a prototype or MVP that showcases the product's core functionalities. This helps refine the design and gather early user feedback.
Iterative Improvements: Use feedback from MVP testing to make necessary adjustments. Agile development methodologies, which focus on continuous iterations and short development cycles, can be particularly effective.
Design for Scalability: Ensure the product design allows easy scaling in response to market demand. This is especially relevant for physical products, where production capabilities must meet varying demand levels.

Cost Analysis and Pricing Strategies

Effective commercialisation requires understanding the costs involved and setting a pricing strategy that balances profitability with customer value:

Cost Analysis: Factor in all aspects of production, including material costs, labour, overhead, shipping, and marketing. Don't forget hidden costs such as licensing fees, import duties, or required certifications.
Pricing Strategies: Choose a pricing model based on your goals—e.g., premium pricing for unique products, penetration pricing to capture market share quickly, or cost-plus pricing to cover expenses and achieve a specific margin.

Pro Tip: Conduct a break-even analysis to determine the minimum sales volume needed to cover costs. This will guide your sales targets and financial planning.

Sales Strategies to Drive Market Adoption

A strong sales strategy can make or break commercialisation efforts. Consider the following approaches:

Direct Sales: For complex products, especially B2B, direct sales channels such as dedicated sales teams can be effective. This allows for personal interaction, negotiation, and tailored solutions.
E-commerce Platforms: Online sales channels provide global reach and convenience and can benefit digital products or consumer goods. Invest in digital marketing techniques like SEO, content marketing, and social media campaigns to drive traffic.
Distribution Partnerships: Collaborating with established distributors or retailers can rapidly expand market reach. Ensure that partnership agreements clearly outline responsibilities, margins, and sales targets.

Pro Tip: Train sales teams or partners thoroughly on the product’s unique selling points and target audience needs to ensure consistent messaging and customer experience.

Legal and Financial Considerations

Navigating commercialisation's legal and financial aspects is crucial for protecting your product and ensuring regulatory compliance.

Intellectual Property Protection: Secure your product's patents, trademarks, or copyrights to protect against infringement. This is especially important for innovative products or proprietary technologies.
Regulatory Compliance: Verify that the product meets all local, national, and international regulatory standards. This may include safety certifications, environmental regulations, or industry-specific requirements.
Financial Planning: Establish a financial model including revenue, costs, and cash flow projections. Seek legal advice for investment agreements, shareholder contracts, and partnership arrangements to avoid pitfalls.

Pro Tip: Regularly consult with legal and financial experts to stay informed about changing regulations or economic conditions that may impact your efforts.

Scaling Strategies and Sales Approaches

Moving Beyond Initial Market Entry

Scaling is about expanding reach, enhancing features, and entering new markets:

Geographic Expansion: Assess the potential for entering new regions or countries. Be aware of local regulations, language differences, and cultural preferences that may require product adjustments.
Product Line Expansion: Introduce complementary products or versions to cater to different customer segments. Use customer feedback to guide development.

Pro Tip: Ensure supply chains and support systems are prepared for the increased demand associated with scaling. Sudden growth can strain operations and affect customer satisfaction if not managed carefully.

A solid Go-to-Market (GTM) strategy is key to successfully launching a product. This strategy encompasses reaching customers, positioning the product, and generating early sales.

Channel Selection: Based on your target audience, choose the most effective distribution channels, such as online platforms, retail stores, or B2B partnerships.
Marketing Campaigns: Launch targeted marketing campaigns to generate awareness and build interest before and after the launch.
Sales Team Alignment: Train your sales team on the product's unique selling propositions (USPs) and equip them with resources to educate customers.

Pricing Strategy

Pricing is a powerful tool that can influence demand, customer perception, and profitability.

Value-Based Pricing: Set prices based on the product's perceived value to customers rather than solely on production costs. This approach helps in maximising profit margins.
Penetration Pricing or Premium Pricing: Consider offering an introductory price to attract early adopters or a premium price for high-value features to capture a specific market segment.
Regular Review and Adjustment: As the product evolves and market conditions change, revisit the pricing strategy to maintain competitiveness.

Businesses can adopt a variety of pricing strategies for both physical and digital products, including cost-plus, value-based, and subscription models, with opportunities to mix and create hybrid approaches tailored to their unique market needs.

#	Physical	Digital
1	Cost-Plus Pricing: Calculate total costs and add a markup percentage to ensure profitability.	Subscription Pricing: Charge customers a recurring fee (monthly, yearly) for continuous access to the product or service.
2	Value-Based Pricing: Set prices based on the customer's perceived value rather than on the cost of production.	Tiered Pricing: Offer different pricing levels based on features or usage, allowing customers to choose the level that suits their needs.
3	Penetration Pricing: Introduce the product at a low price to gain market share quickly and increase prices later.	Freemium Model: Provide a free version of the product with limited features while charging for the full version.
4	Premium Pricing: Price the product higher to create an image of exclusivity and quality.	Pay-What-You-Want Pricing: This allows customers to choose how much they want to pay, and it is often used for digital goods like music or software.
5	Competitive Pricing: Set prices based on competitors' pricing for similar products.	One-Time Purchase: Charge a single upfront fee for access to the product or service.
6	Bundle (Packaged) Pricing: Offer several products at a reduced price to encourage customers to buy more.	License Pricing: Charge based on the number of users or licenses required for software products.
7	Dynamic Pricing: Adjust prices based on real-time supply and demand conditions.	Usage-Based Pricing: Charge customers based on product usage, which is common in cloud services and APIs.
8	Geographical Pricing: Set different prices based on geographic location to account for shipping costs and local market conditions.	Performance-Based Pricing: Tie pricing to the performance or results delivered by the product, often used in SaaS.
9	Promotional Pricing: Offer temporary discounts or promotions to attract customers and boost sales during specific periods.	Content Licensing: Charge businesses to access digital content for their use.
10	Seasonal Pricing: Adjust pricing based on seasonal trends or events, such as holidays or back-to-school sales.	Dynamic Pricing: This system adjusts prices based on demand, user behaviour, or market conditions, allowing businesses to respond to changing customer needs.

Sales and Distribution Scaling

As the product gains market traction, expanding your reach is essential.

Expanding Distribution Channels: Establish partnerships with new distributors, retailers, or online platforms to reach a wider audience.
Product Line Extensions: Offer variants or complementary products to increase customer retention and drive additional sales.

Pro Tip: Leverage sales analytics tools to monitor performance across channels. Identify high-performing areas and invest resources to maximise returns there.

From direct sales and influencer marketing to content-driven approaches, companies can implement diverse sales strategies for physical and digital products while exploring hybrid models that combine multiple techniques for greater effectiveness.

#	Physical	Digital
1	Direct Sales: Selling products directly to consumers through a physical storefront or online platform.	Content Marketing: Creating valuable content to attract and engage potential customers.
2	Retail Partnerships: Collaborating with established retailers to reach a wider audience.	SEO and SEM: Optimising websites for search engines and using paid search advertising to drive traffic.
3	Trade Shows and Events: Participating in industry-specific events to showcase products and generate leads.	Email Marketing: Building a mailing list and sending targeted emails to nurture leads and promote products.
4	Influencer Marketing: Partnering with influencers to promote products to their audience, leveraging their credibility.	Webinars and Online Demos: Offering live demonstrations or educational sessions to showcase product features and benefits.
5	Loyalty Programs: Implementing programs that reward repeat customers with discounts or exclusive offers.	Affiliate Marketing: Partnering with affiliates to promote products in exchange for a commission on sales.
6	Referral Programs: Encouraging existing customers to refer new customers in exchange for rewards.	Freemium to Paid Conversions: Converting users from a free product version to a paid subscription or premium version.
7	Online Marketplaces: Utilising platforms like Amazon or eBay to reach a larger customer base.	Retargeting Ads: Using targeted ads to re-engage users who have previously interacted with the product.
8	Social Selling: Engaging with customers through social media to drive sales and build relationships.	Social Media Advertising: Running paid ads on social media platforms to reach specific target audiences.
9	Upselling and Cross-Selling: Encouraging customers to purchase more expensive items or additional products.	User-Generated Content: Encouraging customers to create content (reviews, testimonials) that can be shared to attract new users.
10	Personal Selling: Using a sales team to connect directly with customers, providing personalised recommendations.	Customer Education and Training: Offering resources and support to help customers get the most out of the product, increasing retention and upsell opportunities.

Managing Commercialisation and Productisation Throughout the Product Lifecycle

1. Concept and Development Phase

At the earliest stage, the focus is on transforming ideas into viable product concepts. Commercialisation and productisation play key roles in shaping the direction and viability of the product.

Market Research and Validation: Before investing in full development, assess the market demand, identify target customer segments, and understand potential competitors. This ensures the idea aligns with market needs.
Prototyping and MVP Development: Develop a Minimum Viable Product (MVP) to test core functionalities and gather early feedback. The aim is to validate the concept and identify necessary improvements before proceeding.
Product Roadmapping: Outline a clear development plan, incorporating feedback and prioritising features that align with customer needs and market potential. This roadmap helps guide the evolution of the product.

Pro Tip: Use agile development methodologies to iterate quickly and adapt to feedback. This approach allows for flexibility, reducing the risk of developing a product that doesn’t fit the market.

2. Introduction Phase

At this stage, the product is launched, and the primary focus shifts to building market awareness and generating sales. Commercialisation strategies aim to maximise the product's market penetration.

Go-to-Market Strategy Execution: Implement the plan by targeting early adopters, leveraging sales channels, and launching marketing campaigns to create buzz around the product.
Pricing Strategy: Carefully set the price point based on the product's value proposition, target market, and competitive landscape. Consider introductory pricing or discounts to incentivise early sales.
Early Feedback Loop: Continue gathering customer feedback post-launch to identify any issues or improvements needed. This feedback helps fine-tune the product and marketing strategies.

Pro Tip: Employ targeted marketing efforts to reach niche segments that are likely to benefit the most from the new product. Building a loyal customer base early on can help drive word-of-mouth promotion and advocacy for the product or service.

3. Growth Phase

As the product gains traction, scaling becomes the priority. Efforts are geared toward expanding the customer base, increasing market share, and optimising operations.

Expanding Distribution Channels: To reach more customers, explore new sales channels, such as additional retailers, e-commerce platforms, or international markets.
Product Line Extensions or Variants: Introduce new versions, complementary products, or accessories to meet customer needs and preferences. This can boost revenue and solidify market position.
Marketing and Sales Scaling: Ramp up promotional activities to maintain growth momentum. Focus on customer acquisition strategies and building long-term relationships.

Pro Tip: Use customer data analytics to identify trends and preferences. Personalise marketing messages to target specific segments more effectively, improving conversion rates.

4. Maturity Phase

During the maturity phase, the product has reached peak sales, and growth may start to slow. The emphasis shifts to maintaining market share and maximising profitability.

Product Differentiation: To keep the product relevant, introduce updates or enhancements that offer new value to customers. This could involve adding features, improving performance, or updating the design.
Cost Management: Streamline production processes and optimise the supply chain to reduce costs and protect margins. Negotiating better terms with suppliers or leveraging economies of scale can help maintain profitability.
Customer Retention: Focus on retaining existing customers through loyalty programs, regular updates, or bundled offers. Satisfied customers are likelier to remain loyal and recommend the product to others.

Pro Tip: Pay attention to competitors who may be trying to capture your market share with similar products. Monitoring the competitive landscape helps in quickly responding to any threats.

5. Decline Phase

In the decline stage, sales and market demand begin to wane. Strategies must adapt to manage the product's lifecycle cost-effectively and decide whether to rejuvenate, phase out, or replace the product.

Exit Strategy or Product Sunset Planning: If maintaining the product is no longer feasible, plan an exit strategy. This could involve selling off remaining inventory at a discount, phasing out production, or offering support for existing users while no longer developing new features.
Product Rejuvenation: If market trends or customer needs shift, consider revitalising the product with new features, rebranding, or targeting different market segments. This can sometimes extend the product's lifecycle.
Transfer Resources to New Products: As demand declines, resources can be allocated to developing or promoting newer products in the portfolio.

Pro Tip: During the decline phase, focus on extracting maximum value from the product with minimal additional investment. Monitor the profitability closely to avoid sunk costs.

Tools and Frameworks for Commercialisation and Productisation

Adopting the right tools and frameworks can facilitate smoother commercialisation and productisation processes:

Business Model Canvas: Use this tool to map out the key elements of the business model, including value propositions, customer segments, and revenue streams.
Customer Relationship Management (CRM): Implement a CRM system to track customer interactions, preferences, and feedback.
Agile Development Frameworks: These methodologies allow for iterative product improvements based on customer feedback.
Financial Analysis Tools: Budgeting and forecasting tools help in planning expenses and revenues, which is crucial for economic stability during scaling.

Pro Tip: Implement workflow management tools to streamline cross-functional team activities. These tools can improve communication and ensure that all stakeholders are aligned on product goals.

Bottom-Up Approach to Product Development

The bottom-up approach focuses on customer needs rather than top-down directives from senior management. By prioritising customer feedback, data-driven decisions and input from specialists, products can better align with market expectations.

Empowering Product Managers and Specialists: Encourage teams to gather insights from customer interactions, sales data, and user trends to guide product development.
Data-Driven Decision Making: Base product features and updates on data such as customer feedback, market trends, and competitive analysis.
Continuous Customer Feedback Integration: Establish a feedback loop using CRM tools, direct customer interactions, and user analytics.

Pro Tip: Facilitate a company culture that encourages experimentation and innovation based on customer needs. Fail Fast, Fail Smart. This allows employees to propose ideas, test, iterate, lean and develop solutions that benefit both the customer and the business.

Lucas Gabriel
2025 FOLIO