DEFINITION of 'Commercialization'

The process by which a new product or service is introduced into the general market. Commercialization is broken into phases, from the initial introduction of the product through its mass production and adoption. It takes into account the production, distribution, marketing, sales and customer support required to achieve commercial success. As a strategy, commercialization requires that a business develop a marketing plan, determine how the product will be supplied to the market and anticipate barriers to success.

BREAKING DOWN 'Commercialization'

The process of commercialization is likened to a funnel. At the widest part are the many ideas that a company might have for launching a product. As the funnel narrows, the company weeds out ideas based on logistics and costs, consumer and economic trends, and feasibility. Commercialization is part of a larger feedback loop for a product, as the ultimate introduction of the product into the market may require adjustments to the process.

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