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New Product Development Process

New Product Development Process. March 2010. Vision – to be a leader in private label product offering to the marketplace. Mission – to successfully launch 10 new products yearly offering the best quality, price and reliability.

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New Product Development Process

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  1. New Product Development Process March 2010

  2. Vision– to be a leader in private label product offering to the marketplace. • Mission – to successfully launch 10 new products yearly offering the best quality, price and reliability. • Goal– Enhance Premier’s business in Foot Care, First Aid and strategically related categories by developing and creating a “differentiated product that delivers unique benefits and superior value to the customer.” • Strategy – create products that use Premier’s advantage in: - manufacturing process - affiliate partners and alliances - relationship with customers - marketing and sales resources

  3. Current New Product and Service Development Process Discovery Ideation: Competitors Cust suggestion Sales Marketing Gate 1 Can we manufacture it? Development Gate 4 Testing/ Validation Scoping Gate 2 Gate 3 Extensive testing and validation Test results Proto-type In-house tests Legal and patents Magnitude of opportunity Initial screenings Decision to spend Go to testing Production • No systematic process in place to collect ideas internally • No stage to Build Business case (in-depth research) • Decisions and steps are rushed or skipped • No Post-Launch Review • How can we refine this process?

  4. Introducing….. The New Product and Services Phase-Gate Process 3-phases of Activity: 1. Ideation 2. Elimination 3. Development Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen CFD Gate Testing Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Launch Post Launch Review

  5. How can we fill our Idea bank? • Annual Sales Summit • Conferences, trade shows • Customer service department • Sales, marketing, management, buyers, and sales brokers • Also collect from internal employees (manufacturing, QA, regulations, planning and purchasing) • – set up a reward system for product/improvements chosen and made. • Triggers: • Retail market studies/visits Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen CFD Gate Testing Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Launch Post Launch Review

  6. Ideation Screen • Must-meet criteria: • does the product fit into company’s product mix? • is the product in-line with company’s strategic goals? • generate US$100K or 50K unit volume? • net profit margin @ 20%? • is the product feasible with current resources? • is there a need for this product in our market? • can we sell this in our current market/distribution? • Gatekeepers: Sales, Company Management Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen CFD Gate Testing Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Launch Post Launch Review

  7. Surface Evaluation • Preliminary market assessment (Pro-active development) • internet search, store checks, Evaluation IRI data • How can the product be differentiated? (delivery, ingredients used, design, packaging) • Preliminary technical assessment: • Do we have strategic production capabilities process for this item? • will it expand business arena, product advantage • Preliminary legal assessment • Preliminary Financial assessment • ROI, how long will it take to recoup investments? Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen CFD Gate Testing Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Launch Post Launch Review “The greatest differences (between winner and loser) lie in the first few steps of the new product process ” -Robert G. Cooper

  8. Surface Evaluation Screen Market issues, barriers to entry? Technical issues Legal issues Financial issues with payback period/margins Gatekeepers: - Top Management - Manufacturing engineers - Legal counsel - Vendors Ideation Ideation screen Surface Evaluation S.E. Screen Detailed Evaluation Detailed Eval. Screen CFD Gate Testing Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Launch Post Launch Review

  9. Detailed Evaluation Building the Business Case Product rationale Competitive Analysis :rate of growth, market size, understand current market Target market/ channel Product benefits, Product strategy *Manufacturability and Selection of vendors, logistics Compile PD timeline with projected investment $ for each stage. Forecast potential sales for year 1 and year 2 Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen CFD Gate Testing Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Launch Post Launch Review

  10. Detailed Evaluation Screen • Financial req’s with payback period/margins. • Invest in equipment if payback is less than 3 years. • Has there been a change in market conditions? • Legal issues are unworkable • Initial response from buyers weak/strong • Decision to spend money • Gatekeepers: Operations, outside Sales reps Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation D.E. Screen CFD Gate Testing Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Launch Post Launch Review

  11. Cross Functional Development • Physical Prototype initiation • Have all departments updated on development progress & their roles • Marketing: Build concrete development timeline, market launch plans, sell-sheets, consumer feedback • Sales: collect customer feedback and forecasts • QA: In-house testing • Legal Dept: Resolve any legal hurdles • Purchasing: finalize all sources, components and vendors • Accounting: review all sales #’s and margins Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen CFD Gate Testing Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Launch Post Launch Review

  12. Cross Functional Development Gate • Satisfy customer timeline execution (POG)? • Meet updated financial numbers? • Consumer feedback positive? • Quality assurance from QA? • Go to test • Gatekeepers: Operations, Buyers Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen CFD Gate Testing Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Launch Post Launch Review

  13. Testing and Validation Sample production generated Collect customer feedback Conduct consumer testing panel Initiate Industry product testing: STR Initiate Stability lab testing: accelerated 90-days In-house QA testing (drug fact panels, ship testing req’s, etc.) Develop technical specifications Collect customer acceptance (conference mtgs: ECRM, PLMA) Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen CFD Gate Testing Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Deployment Launch Post Launch Review Testing

  14. Testing Gate • Evaluate quality of testing and validation • Consumer testing results positive? • Industry product testing: STR = 10? • Stability lab testing = stable after accelerated 90 days? • Ship-test, passed? • Financial review • Decision to go/kill • Gatekeeper: Marketing Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen Testing Gate CFD Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Launch Post Launch Review

  15. Deployment Is everything ready/ in-place? Marketing materials sent Logistics: Receive all components in-house Finalize production schedule Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen CFD Gate Testing Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Launch Post Launch Review

  16. Deployment Gate • Test run production • equipment/machine functions properly • production rate at estimated average Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen Deployment Gate CFD Gate Testing Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Launch Post Launch Review

  17. Launch / Post Launch Review Launch = Production Delivery to DC’s Ideation Post Launch Review Review final profits, costs vs. orig forecast. Did all departments deliver/perform? What were the projects strenghts/weakness? Regroup with team to discuss what was learned Make improvements to NPD process Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen CFD Gate Testing Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Post Launch Review Launch

  18. Post Launch Review Gate Is everything running as planned? Are we hitting all numbers? All possible improvements made? Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen Post Launch Review Gate CFD Gate Testing Gate Deployment Gate Cross-Functional Development Testing Deployment Launch Post Launch Review

  19. New Product and Services Phase-Gate Process It Works! Ideation Ideation screen Surface Evaluation Surface Eval. screen Detailed Evaluation Detailed Eval. Screen CFD Gate Testing Gate Deployment Gate Post Launch Review Gate Cross-Functional Development Testing Deployment Launch Post Launch Review

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