NEW YORK UNIVERSITY STERN SCHOOL OF BUSINESS MKTGUB.0060.01 (Tisch UC19) New Product Development Professor Bryan Bollinger Updated: 1/26/2014 Class Time: TR 9:3010:45 Office: Tisch 912 Phone: (212) 9980519 Email: [email protected]Office hours: Tuesday 11:0012:00, Thursday 3:004:00, and by appointment. Teaching Assistant: Ronak Sheth email: [email protected]Nature and Purpose of Course This course deals with the challenge of bringing to market elegant and efficient solutions to strong customer needs. This challenge is fundamental in customercentric innovation, and is relevant whether you work for a startup or a large company, whether you sell products or services, and whether your customers are individual consumers or companies. We focus primarily on state of the art frameworks, concepts and tools that have been recently validated by innovative companies. We structure our learning around the following basic steps of the innovation process: 1. Opportunity identification 2. Idea generation 3. Design 4. Testing 5. Launch Required Readings Instead of inundating you with required readings, I have selected only a few that are critical for your understanding of the NPD process. In return, I expect indepth, critical reading and not skimming the material while on the treadmill. To best use our time together in class, I will post lecture slides for you to read ahead of time. This will enable everyone to learn from each other during class time rather than me trying to keep you awake with a song and dance in the front of the room. Required Books Packet of Cases and Articles: Available at the NYU Bookstore.
This course deals with the challenge of bringing to market elegant and efficient solutions to strongcustomer needs. This challenge is fundamental in customercentric innovation, and is relevantwhether you work for a startup or a large company, whether you sell products or services, andwhether your customers are individual consumers or companies.
We focus primarily on state of the art frameworks, concepts and tools that have been recentlyvalidated by innovative companies. We structure our learning around the following basic steps of theinnovation process:
1. Opportunity identification2. Idea generation3. Design4. Testing5. Launch
Required Readings
Instead of inundating you with required readings, I have selected only a few that are critical for yourunderstanding of the NPD process. In return, I expect indepth, critical reading and not skimmingthe material while on the treadmill.
To best use our time together in class, I will post lecture slides for you to read ahead of time. Thiswill enable everyone to learn from each other during class time rather than me trying to keep youawake with a song and dance in the front of the room.
Required Books
Packet of Cases and Articles: Available at the NYU Bookstore.
The packet of cases only include materials not available online through the NYU bookstore to helpdefray the cost. Links to online materials are in the syllabus.
Principles of Marketing Engineering, 2nd ed., by Gary Lilien, Arvind Rangaswamy, and ArnaudDe Bruyn (Only about $30 at http://www.decisionpro.biz/products/books/)
Other Resources
One nice thing about learning about new product development is the wealth of resources availableon the subject. Here is a list of some good reads for your edification. To risk a cliche, what you getfrom the class will depend greatly on how much you are willing to put in.
● Look at More: A Proven Approach to Innovation, Growth, and Change by AndyStefanovich
● Disrupt: Think the Unthinkable to Spark Transformation in Your Business by LukeWilliams
● The Four Steps to Epiphany: Successful Strategies for Products that Win by StevenGary Blank.
● Innovation Tournaments: Creating and Selecting Exceptional Opportunities byChristian Terwiesch and Karl Ulrich
● Why Not? How to Use Everyday Ingenuity to Solve Problems Big and Small by BarryJ. Nalebuff, Ian Ayres, and Ian Ayres.
● Winning at New Products: Creating Value Through Innovation by Robert Cooper● Principles of Marketing Engineering by Gary Lilien, Arvind Rangaswamy, and Arnaud
De Bruyn.● Design and Marketing of New Products, 2nd ed., by Glen Urban and John Hauser.● New Products Management, 8th ed., by Merle Crawford and Anthony Di Benedetto.● Will and Vision: How Latecomers Grow to Dominate Markets by Gerard Tellis and
Peter Golder.● Stanford DSchool bootcamp bootleg:
A course web site is available on NYU Classes. This site contains the course syllabus. All otherimportant material will be available through Google Docs and will be linked in the syllabus.
Guest Speakers
One of the elements in the class I have strived to include is a slate of great guest speakers who areexperts in different areas of the new product development process. Attendance is required andactive listening is encouraged.
The centerpiece of the deliverables in this course is a group project. This is an undertaking you willbegin on the first day of class with the formation of product groups, culminating in the presentationof a new product idea to both myself and your classmates. There will be deliverables throughout thesemester with a final report and presentation, all of which together will count for 40% of your grade.
The project is intended to replicate the entire development process of a new product/service. Pleasemake sure to fully document the development process, including ideas which are not subsequentlyacted upon. I will be looking to determine how well you were able to identify specific customerneeds, delineate a market, translate customer needs into a prototype, define the value proposition,test the concept and outline the launch strategy. In addition, I will gather information from all teammembers on the relative contributions to the project and use appropriate weighting to arrive at theindividual scores.
To succeed in the marketplace, an offering needs to meet three criteria as illustrated by the Venndiagram below:
The idea is to prototype, test and iterate until your offering satisfies all three conditions. Your reportand presentation should touch on all three areas and provide solid evidence that (1) there is potentialconsumer demand, (2) you can create value for the company, and (3) the offering is technicallyfeasible.
We will have frequent checkins during the course, so that I can provide you with timely feedbackon your progress. There will be also several inclass opportunities to solicit input from yourclassmates.
Final Report Guidelines are available here.
Individual Assignments (35%)
● Two case writeups (5% each)● Select a company you are interested in and propose a growth strategy centered around
NPD, backing up your arguments with data (you may want to use the RWW frameworkto organize your thoughts). The report is not to exceed 3 pages. (10%)
● Conjoint assignment (15%)
Contribution/Professionalism (25%)
The best learning experiences occur when students participate actively. You must be prepared todiscuss all assigned readings and cases. Your comments should reflect a depth of understandingindicative of thorough analysis (including number crunching) and most often discussions with otherstudents prior to class. You should be prepared to articulate and defend your position when calledon to do so. Active participation of all students is required but quality and frequency ofcomments is more important than duration of each comment. The ability to speak comfortablyto a group is a vital business skill. If you are anxious about public speaking, the only way to getbetter is to practice. The best way to reduce your anxiety is to be thoroughly prepared.
These are the elements I will consider in evaluating your participation:1. Are you a good listener? Active listening is at least as important as speaking.2. Do you contribute to the learning environment by sharing your relevant business experiences
and those you read about?3. Do your comments show evidence of thorough analysis?4. Do you ask constructive questions of other students that help to deepen everyone's
understanding?5. Do you distinguish between different kinds of data (i.e., facts and opinions)?6. Are you willing to share ideas and information in a collegial fashion?7. Are you willing to test new ideas, or are all comments "safe" (e.g., a repetition of the case facts
without new insights)?8. Are you willing to interact with your classmates to help refine ideas?9. Do your comments build on earlier comments to advance the discussion or are you merely
repeating earlier comments or raising points that do not fit into the current discussion?10. Do your comments incorporate concepts presented in lectures, readings, and earlier cases?11. Do you make your points succinctly?
Rules of Class Discussion: Be respectful. Putting down legitimate comments (those not intended tobe humorous) is unacceptable. Everyone's input, if not repetitious, must be valued and encouraged.Feel free to question or disagree with other students, however, such disagreement must be based onthe idea and not the person. Universal respect is the sine qua non of great discussions and greatlearning experiences.
In addition to in class contributions, a Facebook group has been created where youmay contribute to your classmates learning by sharing interesting materials and links,http://www.facebook.com/groups/nyusternnpdub/. The membership of the group is public but allposts are private. This forum is for you to post your own innovative ideas, new products orconcepts you have seen recently which appealed to you, interesting articles related to NPD, etc.The goal is for the content to spark discussion. Commenting on others’ posts is encouraged (withthe same guidelines as the class discussion). Posting is not mandatory but will be accounted for inevaluation of your class contribution. In addition, I will be selecting some of your posts for inclassdiscussion.
1. You should attend all class sessions, complete all readings before class, and hand in allassignments by the beginning of class. Late assignments will be downgraded. Please minimizedisturbances during class, i.e., talking, arriving late, leaving early, etc. If you must miss a class,please let me know in advance and then get notes from other students.
2. Laptops, tablets, and phones may not be used during lectures and discussions unless needed fora specific activity.
3. Students are expected to adhere to the school’s honor code. Please ask me if you have anyquestions about how the honor code applies to a specific situation. For this class, the mostimportant aspect to be aware of is that the individual assignments need to reflect the work of thestudent handing them in. For the group projects, I encourage you to discuss them with yourclassmates both inside and outside of your group.
4. No extra credit assignments will be given in this course. Please see me right away if you areconcerned about your performance.
5. Deviations from the syllabus may be necessary.
Academic Integrity:
Integrity is critical to the learning process and to all that we do here at NYU Stern. As members ofour community, all students agree to abide by the NYU Stern Student Code of Conduct, whichincludes a commitment to:
● Exercise integrity in all aspects of one's academic work including, but not limited to, thepreparation and completion of exams, papers and all other course requirements by notengaging in any method or means that provides an unfair advantage.
● Clearly acknowledge the work and efforts of others when submitting written work as one’sown. Ideas, data, direct quotations (which should be designated with quotation marks),paraphrasing, creative expression, or any other incorporation of the work of others shouldbe fully referenced.
● Refrain from behaving in ways that knowingly support, assist, or in any way attempt toenable another person to engage in any violation of the Code of Conduct. Our support alsoincludes reporting any observed violations of this Code of Conduct or other School andUniversity policies that are deemed to adversely affect the NYU Stern community.
The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and canbe found here: www.stern.nyu.edu/uc/codeofconduct
To help ensure the integrity of our learning community, prose assignments you submit to Blackboardwill be submitted to Turnitin. Turnitin will compare your submission to a database of priorsubmissions to Turnitin, current and archived Web pages, periodicals, journals, and publications.Additionally, your document will become part of the Turnitin database.
General conduct and behavior
Students are also expected to maintain and abide by the highest standards of professional conduct
and behavior. Please familiarize yourself with Stern's Policy in Regard to InClass Behavior &Expectations(http://www.stern.nyu.edu/portalpartners/currentstudents/undergraduate/resourcespolicies/academicpolicies/index.htm) and the NYU Disruptive Behavior Policy(http://www.nyu.edu/about/policiesguidelinescompliance/policiesandguidelines/bullyingthreateningandotherdisruptivebehaviorguidelines.html).
Students with disabilities
If you have a qualified disability and will require academic accommodation of any kind during thiscourse, you must notify me at the beginning of the course and provide a letter from the MosesCenter for Students with Disabilities (CSD, 9984980, www.nyu.edu/csd) verifying yourregistration and outlining the accommodations they recommend. If you will need to take an exam atthe CSD, you must submit a completed Exam Accommodations Form to them at least one weekprior to the scheduled exam time to be guaranteed accommodation.
Guest Speaker: Luke Williams, Frog Design, Berkeley Center Director
Luke Williams is an internationally recognized authority on innovation leadership. He is Professor of Marketingand Executive Director of the Berkley Center for Innovation & Entrepreneurship at New York University's SternSchool of Business, and a Fellow at Frog, one of the world's most influential innovation companies. Williams is asoughtafter commentator on disruptive innovation, entrepreneurship, and cultural change. He is invited tospeak worldwide, and his views are regularly featured in BusinessWeek, Fast Company, The Atlantic, and NPR(National Public Radio). For more information visit disruptivethinking.com
For this class:● Read (optional): Bower, Joseph L., and Clayton M Christensen, “Disruptive
Technologies: Catching the Wave,” Harvard Business Review, 1995.
● Read: IDEO Product Development, Harvard Business School case 9600143.Prepare as a very brief (one page max) case write up:
● How would you characterize IDEO’s process, organization, culture and management?● Should IDEO accept the Visor project as is (on a dramatically reduced schedule)?
Why? Please consider both IDEO’s and Handspring’s perspectives?● Read (Optional): Schrage, Michael, “The Culture(s) of Prototyping”, Design
Management Journal, 1993.
Session 8: February 20
Topic: New product development process
Objectives:● Actively explore the new product development process.
For this class:● Read: Cooper, R., “Perspective: The Stage Gate IdeatoLaunch Process – Update,
What’s New, and NexGen Systems”, Journal of Product Innovation Management,2008.
● Get a sense for the tradeoffs faced when selecting product features.
For this class:● Read: Marketing Engineering, chapter 3 (segmentation and targeting)● Read: Sweetwater, Harvard Business School case 5699142.
Session 14: March 13
Topic: Targeting and Positioning
Objectives:● Discuss role of perceptual mapping and multidimensional scaling in NPD.
For this class:● Watch: Perceptual Mapping lecture.● Read: Green Ox, Darden case UV0787.● Read (Optional): Marketing Engineering, chapter 4 (positioning).
Objectives:● Understand the methods of concept testing and conjoint analysis.● Learn the different methods for customer preference elicitation.● Get a feel for the merits and limitations of conjoint for product design.
For this class:● Read: Dolan, Robert J., “Analyzing Consumer Preferences”, Harvard Business
Publishing, 1999.● If you had trouble with the positioning material and have not yet read it, read Marketing
Engineering, chapter 4.
Session 16: March 27
Topic: Social entrepreneurship and product design
Objectives:● Hear about the first hand experiences of a social entrepreneur.
For this class:● Read: (Optional) Dolan, Robert J., “Concept testing note”, Harvard Business
Publishing, 1989.● Read: If you haven’t read them yet (or if you need further clarification), read/reread
chapters 34 of Marketing Engineering.
Session 17: April 1
Topic: Conjoint analysis
Objectives:● Become comfortable analyzing customer preferences using conjoint data.● Learn how to calculate market shares based on conjoint data.
For this class:● Read: Marketing Engineering, chapter 6, pg 162174 (conjoint)● Look at the draft of the GreenWare conjoint questionnaire (see file “GreenWare Draft
of Conjoint Questionnaire”). Which modification(s), if any, would you recommend?Your suggestions may relate to the format, the content, or any other aspect of thequestionnaire.
Session 18: April 3
Topic: Conjoint analysis: Application.
Objectives:● Continue analyzing customer preferences using conjoint data.● Understand how demographic and benefit segmentation is performed and how it can
assist managers.● Bring Laptop to class
For this class:● Read: GreenWare, Columbia case 080517.● Bring Laptop to next class!
Session 19: April 8
Topic: Pretest and test markets.
Objectives:● Learn about pretest and test markets.
For next class:● Read: Marketing Engineering, chapter 5 (forecasting) pg. 144149.
Session 20: April 10
Topic: Concept Prototype and Design Review Tradeshow
Objectives:● Update your classmates on your progress● Make the first “public” presentation of your “proof ofconcept ideas”● Gather feedback from classmates on your concept design and mockups
For this class:● Provide material for the potential customer to understand your product:
● Prepare your "proofofconcept” sketches, product renderings or early prototypes toclearly communicate your ideas.
● We will spend all of class in a "tradeshow" environment during which you will gatherfeedback from your classmates and wander around the classroom providing feedbackto them. (You may wish to have a minisurvey available for them to complete.)
● Turn in a one page research plan describing how you will gain consumer feedbackregarding your product prototype.
Session 21: April 15
Topic: Sales forecasting for nondurables.
Objectives:● Learn about common sales forecasting tools for nondurables.● Discuss the Contadina case.
For this class:● Read: Marketing Engineering, chapter 5 (forecasting)● Read: Nestlé Refrigerated Foods: Contadina Pasta & Pizza (A)
● Would you launch the pizza?Analysis questions:● Using the BASES model described in Exhibit 9, forecast the estimated demand
(trial and repeat) for the two pizza options under consideration: Pizza andTopping and Pizza Only. Most of the data needed for the forecasting exercise isavailable in Exhibit 21.
● Hints:○ In Exhibit 21 there is a big difference between Contadina users and
nonusers on the top two box scores. This will affect the forecast dependingon what proportions are used for Contadina users vs. nonusers in thepopulation.
○ On p. 14 (2nd to last paragraph), Nestlé’s marketing research departmentcautions us that parent brand usage could vary from 5% to 25%. It wouldbe worthwhile to judge the sensitivity of the forecast under 5%, 15%, and25% parent brand penetration scenarios.
○ What do you learn from Exhibits 13, 14, and 15?○ How does the pizza concept test data (Exhibit 19, 20, and 21) compare to
the pasta concept test data (Exhibit 6)?○ What is your reading of Exhibits 23 and 24?
Session 22: April 17
Topic: Sales forecasting for durables. Diffusion of new products.
Objectives:● Understand the diffusion process of different types of products.● Get a feel for the dilemmas marketing managers face when trying to forecast the
adoption and diffusion of technologyintensive consumer durables.
For this class:● Finish reading Chapter 5.● Read: Draganska, Michaela, “New Product Diffusion Models”● Read: Gourville, John T., “Note on Innovation Diffusion: Rogers’ Five Factors”,
Harvard Business Publishing, 2006.
Session 23: April 22
Topic: TBD
For this class:● Read: Gourville, John T., “Eager Sellers and Stony Buyers: Understanding the
Psychology of NewProduct Adoption”, Harvard Business Review, June 2006, Vol. 84Issue 6, p98106.
● Read: Leslie, Mark and Holloway, Charles A., “The Sales Learning Curve”, HarvardBusiness Publishing, 2006.
Topic: Launch and postlaunch strategies. Communicating your value proposition.
Objectives:● Understand how best to map product benefits to a marketing plan aimed at conveying
those benefits and overcoming barriers to adoption.● Compare various communication approaches for launching a new product.
For next class:● Dropbox: ‘It Just Works’, Harvard Business School case 9811065.● Prepare: Dropbox is a late mover into a crowded space – what opportunity did
Houston see? When he applied to Y Combinator, what hypothesis did he holdregarding the key elements of Dropbox’s business model? What should Houston doabout the decision at the end of the case, i.e. creating a separate version for small andmedium sized businesses? What process should he use in making the decision?
Session 26: May 1
Topic: Innovative marketing strategies. Wrap up and lessons learned.
