The New Product Process

Chapter 3

THE NEW PRODUCTS PROCESS

What is New Product Process?

• The next product in a company’s product line a design team goes through product development process steps.

• A product that adopts or replaces an existing product.

• An old product package in a different way.

STRATEGICPLANNING

Is an organizations process of defining its strategy, or direction, and

making decisions on allocating its resources to pursue this strategy.

A successful Strategic Planning process should:

• Describe the organization's mission, vision and fundamental values• Target potential business arenas and explore each market for emerging threats and

opportunities• Understand the current and future priorities of targeted customer segments• Analyze the company's strengths and weaknesses relative to competitors and

determine which elements of the value chain the company should make versus buy

• Identify and evaluate alternative strategies• Develop an advantageous business model that will profitably differentiate the

company from its competitors• Define stakeholder expectations and establish clear and compelling objectives for

the business• Prepare programs, policies, and plans to implement the strategy• Establish supportive organizational structures, decision processes, information and

control systems, and hiring and training systems• Allocate resources to develop critical capabilities• Plan for and respond to contingencies or environmental changes• Monitor performance

Three main streams of activity feed strategic planning.

1.Ongoing marketing

2.Ongoing corporate planning

3.Special opportunity analysis

They sort into four categories:

Underutilized resources

New resources

External mandate

Internal mandate

Concept Generation

the act by which new concepts, or ideas are created. Also the definition of the second phase of the overall product innovation process, during

which the concepts are created sometimes called idea generation or ideation.

Pretechnical Evaluation

sometimes called screening It is the stage when the ideas that came

from the conception generation activity are evaluated.

Technical Development

This is the phase during which the item acquires finite form-a tangible

good or a specific sequence ofresources and activities that willperform an intangible service.

Commercialization

Has described that the time or thatdecision where the firm decides to

market a product.-should not mean the GO in a GO/NoGo

decision.-the commercialization phase, for someproducts, is life in a pressure cooker.

LaunchThe debut of a product into the

market. The product launch signifies the point at which consumers first

have access to a new product.

The Process Should Meet the Condition of the 13 Key Concepts Given in Chapter 2

• When a process is failing to produce, we usually find that one or more (often several) of the key concepts have been lost.

• Another of the 13 key concepts forces managers to be aware that they are developing three things, not just one. Making the middle stream of activity (evaluation) mandatory automatically forces the team to deal with the three primary causes of new product failure: need, meeting need, and marketing.

Why do new products fail?

Inadequate budgetLacked top

management supportDidn’t involve customer

And scores of others

No need or want

Product didn’t meet the need

net

Not well marketed

+ +Exceptions come with exogenous

factors: competition, government,

economyMoral: Control on accomplishment, not action

They say

They mean

• The last of the 13 key concepts, called continuous new product process development, means that we have to measure the productivity of the process we are using.

• Measuring performance requires preset management guidelines, usually called metrics, so now those who develop new processes must spell out exactly what that process is to produce, when, how much, etc. No more of this “developing the process on the run.” unless, of course an emergency demands it.

The Process should provide some structure of checkpoints along its

way

• Stage gates- points where a stage of activity ends and process

ExampleBefore technical development begins full force, we like to have assurance from the intended end user (and that person’s or firm’s network of advisors) that what we intend to develop will indeed meet needs they have.

• The stage gate should not be a toll gate, where everyone stops while some authority on high is appealed to, makes some ruling, and then allows work to resume.

• The first stage in most processes is strategic planning—opportunity identification and evaluation, combined with a statement how that opportunity will be used.

• The end point is a strategy, and in this book is called a product innovation charter.

Strategic Planning Stage

Product Innovation charter

Concept Generation Stage

Pool of interesting concepts

Pretechnical Evaluation Stage

Concepts screens well and has definition

Technical Development Stage

Financial assurance

Commercialization Stage

Success

• Some people have called stage gates info-gates. Some people called them accomplishments, or popular today, deliverables

The Process should allow the Team and Its support group substantial

degrees of freedom

• Empowerment can loosen up the stage gates, but there are many other ways team can be hobbled. Remember that a new products team is a horizontal form of management. Creating new products takes us across all function, thus risking conflict with all of the chimney’s or silos--- the functions, such as marketing and manufacturing. Each of the function (and not just the big ones) has its own rules or method of operation, sometimes call paradigms. Each is apt to be headed by a power player.

The New Product Process must be flexible to changing conditions

Change can be expected in what the customers wants, how competitors might respond and the new technologies being applied in the product.

The New Product Process must deal with especially critical points in the development

Moments of truthThe customer and organization come into contact with one another in a manner that

gives the customer to either change an impression about the firm.

The New Product Process should integrate the team with the rest of the firm and the rest of the world

The New Product Process should permit a smooth launch

A successful new product launch takes

research, planning and a skilled and

knowledgeable marketing team. 

The New Product Process should provide organization learning

Organizational learning is an area of knowledge within organizational theory that

studies models and theories about the way an organization

learns and adapts

Implication for Aspiring New Product Managers

• Be multifunctional – have experience in more than one function

• Be risk takers – willing to do whatever is necessary to bring a product to market

• Be general manager types – more interested in managing than doing

• Be a combination of optimist, realist; aggressor and team player, leader and follower

• Have a strong creative bent to achieve better product characteristics and to carve out new ways of doing things

• Be comfortable in environments where chaos and confusion seem to reign. Be able to work with depressives, euphorics, and those with no emotion at all