# What Is Commercialization? Steps in the Product Rollout Process

![Commercialization: The process of bringing new products or services to market.](https://www.investopedia.com/thmb/yGTuFnz7Rb7N9wMO1-VY6HlLxg4=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/commercialization.asp-final-ced1e6b60e6c4c608f0169861d5ae826.png)

*— Investopedia / Julie Bang*

> **Definition**
>
> Commercialization is the process of bringing new products or services to market.

## What Is Commercialization?

Commercialization refers to the process of bringing new products or services to market. It involves essential functions, such as production, distribution, marketing, sales, customer support, and more, to ensure the product or service achieves commercial success.

The process often follows a three-tiered strategy that includes the ideation stage, the business process stage, and the stakeholder stage, all of which help scale operations to reach a broader market.

For example, a small bakery known for its cinnamon rolls can commercialize by packaging them for sale in local grocery stores, expanding its reach and increasing sales. Understanding this process is essential for driving business growth.

### Key Takeaways

*   Commercialization is the process of bringing new products or services to market, involving production, marketing, and sales.
*   A successful commercialization strategy requires a three-tiered approach: ideation, business process, and stakeholder engagement.
*   The ideation phase focuses on generating products that meet consumer demands and align with the company's business model.
*   Legal protections, like patents and trademarks, are essential before a product is introduced to the market.

## Key Components of the Commercialization Strategy

Commercialization requires a carefully developed three-tiered product rollout and marketing strategy. It encompasses the following major components:

*   The ideation phase
*   The business process stage
*   The [stakeholder](https://www.investopedia.com/terms/s/stakeholder.asp) stage

### How the Commercialization Process Unfolds

Many people view the [ideation](https://www.investopedia.com/terms/i/ideation.asp) stage as the mouth of a funnel. Although many ideas enter the funnel top, only a fraction ultimately make their way downward toward implementation. Ideation attempts to generate new products and services that meet unanswered consumer demands, and the most functional designs align with the company’s business model, by offering high benefits at low cost.

The ideation stage strives to incorporate a marketing philosophy known as the [four Ps](https://www.investopedia.com/terms/f/four-ps.asp), which stand for product, price, place, and promotion. Often referred to as the marketing mix, a company uses this concept to determine the products to create, the price points at which to sell them, the customer base it wishes to target, and the [marketing](https://www.investopedia.com/terms/m/marketing.asp) campaigns it will roll out to try to move merchandise off shelves.

To commercialize a product, [R&D](https://www.investopedia.com/terms/r/randd.asp) must show public value that can boost the company’s profits. In the business process stage, considerations are made in terms of feasibility, costs, and thinking through how a potential commercialization strategy could actually be rolled out.

The stakeholder stage involves identifying target audiences and stakeholders for the product or service. For commercialization to truly succeed, a company must satisfy both its customer and stakeholder needs.

### Bringing New Products to Market: Pathways and Strategies

Patents, trademark registrations, and other legal measures must be undertaken to protect a product’s intellectual rights, before the product may be brought to market. Manufacturing may occur in-house, or it may be [subcontracted](https://www.investopedia.com/terms/s/subcontracting.asp) to third-party factories. Once a product line is complete, promotional efforts then bring awareness to the [target market](https://www.investopedia.com/terms/t/target-market.asp), which is accessed through distribution channels as well as partnerships with retailers.

Businesses managing production, marketing, and distribution in-house often earn higher profits but face higher production cost risks.

## When Does Commercialization Occur?

Commercialization usually occurs after a small business has grown and scaled its operations and reached levels that allow it to successfully reach a larger market.

## What Are the 3 Tiers of Commercialization?

Commercialization requires a carefully developed three-tiered product rollout and marketing strategy:

*   The ideation phase
*   The business process
*   The stakeholder stage

## What Is the Legal Process in Commercialization?

Before a new product may be brought to market, patents, trademark registrations, and other legal measures must be undertaken to protect the product’s intellectual rights.

## The Bottom Line

Commercialization is a multifaceted process that brings new products or services to market through coordinated efforts in production, distribution, marketing, sales, and customer support. Successful commercialization often follows a strategic rollout that includes ideation, business processing, and stakeholder engagements.

It also relies on strong research and development (R&D) to meet market demands, along with securing patents and trademarks to protect intellectual property. Businesses typically reach larger markets after scaling operations, ensuring they can satisfy both customers and stakeholder needs for long-term commercial success.