Commercialization: Definition & An Overview

KEY TAKEAWAYS

• 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.

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.

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. 

Summary

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.