Transcript New product development2

New Product
Development
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A variety of perspectives from which to analyse the
development of new products
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Some thing to consider…
Figure 9.6 Dropout rates for R&D projects
Source: Adapted from D.L. Babcock (1996) Managing Engineering Technology: An Introduction to Management for
Engineers, 2nd edn, Prentice Hall, London.
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Stages in NPD
Idea
generation
Commercialization>
Test
Marketing
Idea
screening
Concept
development
and testing
Marketing
Strategy
development
Product
development
Business
strategy
http://www.tutor2u.net/business/presentations/marketing/newproductdevelopment/default.html
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From
 R&D dept
 Production team
 Sales team
 Employees
 Customers
 Competition
 External sources
 Market research >
Don’t forget the social determinist and
Individualist school of innovation!
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Creativity versus innovation
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Creativity is the generation
of new ideas.
Innovation is the
implementation of creative
ideas.
For Example: if a scientist has
a number of ideas about
how to build a household
robot, she is creative.
If she applies those ideas to
build a household robot,
she is innovative.
http://www.businessinnovationinsider.com/images/2006/05/Creativity%20to%20innovation.jpg
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45% of lucrative business ideas —
whether breakthrough products or
services, new uses for old ones, or ways
to cut costs— come from
employees…PricewaterhouseCoopers
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Individual creativity versus organisational
creativity
Individual creativity
 People can learn to be more creative by reading
books, participating in workshops, learning
creative thinking techniques etc
Organisational creativity
 Making an organisation more creative and more
innovative is much more complex, requiring the
establishment of a culture of innovation together
with tools for creative collaboration;
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Creative
collaboration
a greater variety of people participating in the
idea generation process equals a higher level
of creativity and innovation.
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variety of people with different
backgrounds and areas of expertise
required
 at minimum, that teams are made up of
people from different divisions within the
company. At best, those people will also
come from different locations or countries.
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Collaboration can happen in …
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Creative teams
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Management placed for project or
 Self created by asking for assistance by friends (though usually from
same area of expertise)
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Brainstorming groups
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When appropriate, business partners, customers and others from
outside the
 company should be brought in to participate.
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Networking
seek the assistance of a colleague for ideas, advice or help – across
company
 staff directories and discussion forum tools can help encourage
 people to network outside their departments and immediate contacts
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Open collaboration
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through web based discussion forums
a totally open environment to solve problems.
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2. Screening ideas
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Screen good ideas
and drop poor ones
asap.
Checked for
 Technical
feasibility
 Financial feasibility
and marketability
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Evaluate its demand,
marketability, and
profit potential
Give ratings to ideas
>
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Criteria for evaluating new products
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Sufficient demand ?
Profitable?
Likely payback period?
Fit firm’s image ?
Lifecycle of the product ?
State of market and
competitors ?
Capability company to
successfully produce and
market product ?
Ease of manufacture ? 13
Remember I.Ansoff’s matrix
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Product vs market (extended Ansoff’s growth
Product
matrix)
Market penetration
Same
product
Extended
product
range
Incremental Totally new
change
product
Same
market
Better
market
coverage
Related
market
Totally new
market
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3. Concept development
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Detailed version of new
product (in documented
user terms – a user
requirements / functional
list)
Turing ideas into tangible
products – customers
perceive as being
valuable
Concept testing : with
groups of consumers
Nokia has released images of Aeon,
a concept phone that combines two
touch-sensitive panels mounted on a
fuel-cell power pack
Devices like this are all part of
Nokia's vision of 'wearable
technology'. Users could wear the
lightweight panels as a badge, or
connected to a wrist-strap.
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4. Marketing strategy development
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Initial marketing
strategy based on
product concept
Formal market
research for product’s
potential
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5.Business analysis
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Review of sales,
costs, profit projection
Estimate potential
sales, income,
breakeven point,
profit and return on
investment from new
ideas
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6. Product development
R& D turns idea into product
 Develop product concept into physical
product, via prototypes or simulations
 Engineering and production issues
resolved via this process
 Consider materials, production processes,
quality and safety
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Design mix
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Formal design –
aesthetics
Functional design –
performance, ,does it
work is it reliable ?
Economy of
manufacture – does
design allow
manufacture
efficiently and cost
that allows profit ?
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7. Test marketing
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Pilot in small geographical area
Field experiment in realistic setting
Aims:
 Forecast
probable results of a national launch
 Test operational effectiveness of the marketing
plan
 Identify possible problems
 Assess customer reactions
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Problems with test marketing:
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Test market may not be true indicator
Environment may change from test to
national launch
Competition may disrupt
 By
exceptional marketing activity
 Launching own product
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Alerts competition to new product
Simulated test marketing is getting more
sophisticated
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8.Commercialisation/ product launch
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Introducing new
product into the
market
Timing is critical for
success
Heavy promotional
expenditure
Choice of introductory
pricing
Well targeted and
positioned
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We have already seen organisational
creativity and collaboration in the form of :
 Creative
teams
 Brainstorming groups
 Networking
 Open collaboration
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These ideas can be extended to serve a
NPD cycle …
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Models of NPD
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Departmental
Activity stage (and
concurrent
engineering)
Cross functional
Decision stage
models
Conversion process
Responsive Models
Network models >
Idea
generation
Commercializatio
Idea
screening
Concept
development
and testing
Test
Marketing
Product
development
MarketingBusiness
Strategy strategy
development
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Departmental
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Each department is responsible for certain tasks and
once finished ‘passed over to next dept’ – over the
wall’
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Ad
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Each dept ‘knows what IT needs to do’
Disad
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Forward and backwards
Lots of rework
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Departmental
R&D provides interesting ideas
 Engineering – develop prototypes
 Manufacturing – viable mass manufacturing
 Marketing – then plan and conduct the
launch
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Activity stage
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Similar to departmental
Build around the activities
Lots of feedback loops
Simultaneous nature of activities (varying in
intensity)
Ad
 Groupings
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according to activity
Disad
 Even
more passing and therefore, procrastination
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An activity-stage model
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Cross functional (TEAMS)
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Dedicated team representing people from a
variety of functions
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Ad
 Full
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representation
Disad
 Organisation
and project management disciplines
need to be well developed
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Decision stage models
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Set of decisions points or gateways must be
passed.
Iterative and uses f/b loops
http://www.stage-gate.dk
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Conversion process
 Numerous inputs into a black box, converted into
a product output
 Input’s such as customer requirements,
technical ideas, manufacturing capabilities all
provide a product output
 Not disciplined , or measurable, or defined
Response model
 Behaviourist approach to decisions
 Organisational response to new proposals and
ideas
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9310.2006.00413.x
for articles on innovation (journals)
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Network models – most recent
thinking
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Accumulation of knowledge from
 variety
of sources eg marketing,
manufacturing, R&D
 And over the progression of project from initial
idea to development PLUS
 external linkages (additional information flow
into organisation)
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A network model of NPD
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