I’ve come across a paper on how to launch a new product successfully. The paper is formal and a bit MBA-ish, but offers solid advice on the factors that could impact the launch of a new product.
According to the paper, the critical success factors for new product development are:

1. Product must be differentiated and superior = Make sure that your product is not a tired “me too” product, but something that is clearly better than your competitors.

Also avoid the mistake of launching new products that you think is great — but nobody wants. Do not make products that are in search of a market – which is a totally wrong way to go about creating new products (yet many very established businesses make this mistake).

2. Research, research and research = Do a market research BEFORE even creating the product. Check the concept if this is a product that the target audience actually wants, find out what competitors are doing and whether they have similar products, and verify if you have the resources and capacity to produce the product.

I personally have made the mistake in the past in going to step 2 in product development procuring the software and equipment I need only to find that I cannot produce the product I wanted.

3. Tap the inputs of the customer = The paper suggests doing a lot of customer research including focus groups to tap into the inputs of the customer. This approach may be easy for a bigger business, but may be expensive for a home based entrepreneur. Actually, I have yet to find a home based entrepreneur who actually hires a market research agency to do focus groups prior to developing a new product. It’s one of those things that sound really good, but beyond the reach of many home based business owners.

Formal market research may not be an option – but there are other ways to get customer feedback. If you have a website or access to an email list, you can create your survey for $19.99 per month with SurveyMonkey.com. You can ask your existing customer base about the concept of your product (without giving too much info away!) and verify if the product is something they would buy if available.

4. Clearly define the product. Scope creep is one of the most common causes of project failures. One simple example is a planned mini-ebook on making money through Adsense becomes an expanded book on contextual advertising. Expanding the idea seems to sound good, but you are likely to miss your deadline and you need to do a lot more work. The matter becomes difficult when you are creating a physical product and you have to go to production — changing the specs will increase production costs and create unnecessary expense of revisions.

5. Think of marketing the product before launching. Do not wait for the product to be completed before you think how you are going to market the product. Even during the development phase, you need to know how you are going to reach your target customers, and even start some form of marketing.

You can read the complete paper from BPTrends.com