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New Products Management

New Products Management. Chapter 2 The New Products Process. Figure 2-1. The Basic New Product Process. Phase 1: Opportunity Identification/Selection. Phase 2: Concept Generation. Phase 3: Concept/Project Evaluation. Phase 4: Development. Phase 5: Launch. Figure 2-4.

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New Products Management

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  1. New Products Management Chapter 2 The New Products Process

  2. Figure 2-1 The Basic New Product Process Phase 1: Opportunity Identification/Selection Phase 2: Concept Generation Phase 3: Concept/Project Evaluation Phase 4: Development Phase 5: Launch

  3. Figure 2-4 Rate of Use of NPD Steps among PDMA Members Concept searching 90% Concept screening 76% Concept testing 80% Business analysis 89% Product development (technical) 99% Use testing/market testing 87%

  4. Phase 1: Opportunity Identification/Selection Active and passive generation of new product opportunities as spinouts of the ongoing business operation. New product suggestions, changes in marketing plan, resource changes, and new needs/wants in the marketplace. Research, evaluate, validate, and rank them (as opportunities, not specific product concepts). Give major ones a preliminary strategic statement to guide further work on it.

  5. Phase 2: Concept Generation Select a high potential/urgency opportunity, and begin customer involvement. Collect available new product concepts that fit the opportunity and generate new ones as well.

  6. Phase 3: Concept/Project Evaluation Evaluate new product concepts (as they begin to come in) on technical, marketing, and financial criteria. Rank them and select the best two or three. Request project proposal authorization when have product definition, team, budget, skeleton of development plan, and final PIC.

  7. Phase 4: Development A. Technical Tasks Specify the full development process, and its deliverables. Undertake to design prototypes, test and validate prototypes against protocol, design and validate production process for the best prototype, slowly scale up production as necessary for product and market testing. B. Marketing Tasks Prepare strategy, tactics, and launch details for marketing plan, prepare proposed business plan and get approval for it, stipulate product augmentation (service, packaging, branding, etc.) and prepare for it.

  8. Phase 5: Launch Commercialize the plans and prototypes from development phase, begin distribution and sale of the new product (maybe on a limited basis) and manage the launch program to achieve the goals and objectives set in the PIC (as modified in the final business plan).

  9. Violations of the Process • Who’s got a new idea today? • Here’s a new technical discovery. • Me Too. • Let’s run it up the flag pole and see who salutes. • We’ve got to do something fast.

  10. Correlates of Success • Match to customer needs. • High Value to the customer. • Innovative • Technical Superiority • Screened on growth potential • Favorable Competitive enviorment • Fit internal company strengths • Communication among functions • Top Managment support • Enthusiastic champion • New-Product Organization • Use new-product process • Avoid unneccessary risk

  11. Strategies Success Rate Marketing and Technology Integrated Low budget, conservation Percentage of Company Sales from New Products High budget, Shotgun Focused but Weak Technology Technology Driven

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