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Commercialization: Definition & An Overview

Updated: February 6, 2023

A key word in the business world is growth.

Small business owners will know the value of growing a business and all of the work that goes into it in order to make it a success. Growth can be achieved in a number of different ways. But it’s mostly done by expanding your operations and bringing new products into the market.

That’s where commercialization comes in. 

But what exactly is commercialization? We’ll take an in-depth look at everything to do with commercialization in this handy guide.

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    • Commercialization is the process of bringing new services or new products to market. 
    • There are three phases of commercialization. The ideation phase, the business process phase, and the stakeholder phase. 
    • In a broader sense, commercialization includes production, distribution, marketing, sales, and other key functions. 

    What Is Commercialization?

    The commercialization process is when a business brings in new services or new products to market. In a broader sense, it entails things such as production, distribution, marketing, and sales. All of these things are key functions to achieving commercial success for the new product or service. 

    When a business has experienced growth and scales its operations, commercialization can occur. For example, if a flower shop has had great success with its arrangements. They can commercialize these products by selling the pre-arranged bundles to a local store who then sells them on. This can increase the flower shops’ sales.

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    The 3 Phases of Commercialization

    The commercialization phase can be split up into three different sections:

    • The Ideation Phase
    • The Business Process Phase
    • The Stakeholder Phase

    1. The Ideation Phase

    This phase is where you come up with a new product and start the process of introducing it to the market. The product has to be commercially viable so that it can stand out in the market. Therefore having a higher chance of success. 

    If this stage goes wrong, the entire product can experience failure before it’s really started. 

    2. The Business Process Phase

    The second phase focuses on the business side of things. When a new product is introduced to the market, it is with the aim of improving the business. 

    For this to happen, it’s vital that proper strategies and campaigns are put in place for marketing. Every business needs to make sure that they are thorough in their business processes. This is in order to correctly engage their target market. 

    3. The Stakeholder Phase

    Stakeholders are an important part to consider when launching a new product to the larger market or mass market. 

    You need to be sure that your new ventures will be able to benefit the business’ stakeholders. If there is a large amount of risk involved, then the chances are that the stakeholders won’t approve your commercialization.

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    The Commercialization Process

    The ideation stage of the commercialization process incorporates the Four Ps of marketing. This stands for product, price, place, and promotion. Companies use this to figure out what products to make, the price points, the customer base target, and the marketing campaign.

    To then be eligible for commercialization, there must be a degree of public value. There must be considerations for the feasibility, costs, and how a commercialization strategy could be played out. 

    So for commercialization to be successful, the business must meet both the stakeholder and the customers needs. 


    When expanding your business, it’s important to know the full details and definition of commercialization. Launching a new product can be a risky venture, so make sure that you know the ins and out before you commit. 

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    FAQs About Commercialization

    What Is the Difference Between Marketing and Commercialization?

    These two things overlap but are not the same. Marketing is a much broader term that can encompass a number of different things. Whereas commercialization is the process of introducing new products or services to market. 

    What Does Commercialization Strategy Mean?

    Commercialization strategy refers to the financing options that a business chooses. This is in order to bring a product from concept to the marketplace.

    Why Is Commercialization Important?

    Commercialization allows customers to get a wider choice of products. For companies, it helps to generate more income, and reduce costs.

    What Are the Disadvantages of Commercialization?

    It can increase the cost of living by increasing the price of goods. It can also encourage a higher rate of consumer exploitation due to an increase in price. 


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