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NewProductDevelopmentStrategy,Tactics&ProcessStrategy,Tactics&ProcessAnandSubramaniam“Knowledgespeaks,butwisdomlistens.2-JimiHendrixHighlightsNPD-StrategyNPD-DesignNPD-TypesNPD–Process3NPD–ProcessNPD-LeversReasonforNewProductFailuresOverestimatingmarketsizePoormarketingresearchDesignproblemsExcessivedevelopmentcosts4ExcessivedevelopmentcostsIncorrectlypositioned,priced,oradvertisedCompetitivereactionNewProductDevelopmentStrategyNewProductDevelopmentStrategyNewProductDevelopmentStrategyOriginalproductsAcquisitionProductimprovementsProductmodifications6ProductmodificationsNewbrandsthroughthefirm’sownR&Defforts.NPD-ValueAddNEWPRODUCTDEVELOPMENT7GROWTHPRODUCTIVITYIMPROVEMENTBRANDMAINTENANCEQUALTITY•LineExtensions•NewProducts•NewPackages•ReduceCost•Formulas•Packages•Manufacturing•QualityofDesign•Conformance•SpecialSituations•Regulatory•Environmental•SpecificationsNPDStrategy-PlanningLevelsMissionObjectivesMissionObjectivesPRODUCTSTRATEGYBusinessUnitsIdentityCompanyStrategy8STRATEGY•TechnicalCompetencies•StrategicPrinciples•Organisation•Alliances•ProjectMix•Milestones•ResourceLevelsPRODUCTPORTFOLIOSTRATEGY•ResourceAllocations•TechnicalApproaches•Timing•DeliverablesPRODUCTDEVELOPMENTSTRATEGYCategoriesBrandsProjectsBusinessStrategyPortfolioStrategyProjectStrategyCrossFunctionalTeamTechnology&QualityPackagingEngineering/ProcessEngineeringQuality&SafetyResearch&DevelopmentMarketingMarketingResearchSales9Research&DevelopmentIndustrialEngineerMechanicalEngineerLegalAffairsManufacturingOperationsLogisticsProcurementSupplyChainQualityControlFinance&AdminNewProductDevelopmentDesignNewProductDevelopmentDesignProductDesignSpecificationPatentsEnvironmentMaterialsShelflifePackingCompetitionWeightQuantitySafetyTestingLegalMaintenancePolitics11DisposalShippingSizeProcessesCustomerTimescaleErgonomicsAestheticsInstallationPerformanceServicelifePlantStandardsQualityassuranceStorageDESIGNCORENewProductDevelopmentTypesNewProductDevelopmentTypesProductDevelopmentTypesGeneric(MarketPull)TechnologyPushPlatformProductsProcessIntensiveCustomisationDescriptionThefirmbeginswithamarketopportunity,thenfindsanappropriatetechnologytomeetcustomerneeds.Thefirmbeginswithanewtechnology,thenfindsanappropriatemarket.Thefirmassumesthatthenewproductwillbebuiltaroundthesametechnologicalsubsystemasanexistingproduct.Characteristicsoftheproductareconstrainedbytheproductionprocess.Newproductsareslightvariationsofexistingconfigurations.DistinctionsAdditionalinitialConceptBothprocessandSimilarityof13DistinctionswithrespecttothegenericprocessAdditionalinitialactivityofmatchingtechnologyandmarket.Conceptdevelopmentassumesagiventechnology.Conceptdevelopmentassumesatechnologyplatform.Bothprocessandproductmustbedevelopedtogetherfromtheverybeginning,oranexistingproductionprocessmustbespecifiedfromthebeginning.Similarityofprojectsallowsforahighlystructureddevelopmentprocess.Developmentisalmostlikeaproductionprocess.ExamplesSportinggoods,furniture,tools.SyntheticFabricsConsumerelectronics,computers,printers.Snackfoods,cereal,chemicals,semiconductors.Switches,motors,batteries,containers.NewProductDevelopmentProcessNewProductDevelopmentProcessNewProductDevelopmentProcessConceptScreening*OpportunityIdentificationIdeaGenerationConceptDevelopment“TheFuzzyFrontEnd”15TestMarketing*ProductDevelopmentPositioningDevelopmentCommercial-isation*”StageGates”MarketingPlanDevelopmentOpportunityIdentificationInternalsourcesCompanyemployeesatalllevelsExternalsources16ExternalsourcesCustomersCompetitorsDistributorsSuppliersOutsourcingIdeaGeneration(Ideation)CrossFunctionalTeamGenerateIdeas•Brainstorming•Suspendjudgment•Encouragecreativity17•EncouragecreativityIdentifyOpportunityAreas•Problemsolvingtobringnewideastothetable•Sketchingorprototype•IdeaprioritisationGenerateNewProductConceptsandevaluateagainstasetofcompanycriteriafornewproducts.ConceptDevelopmentDonebyMarketingand/orAdvertisingAgencyConducting“FocusGroups”Objectives18ObjectivesJudgewhethertheconceptfitstheopportunityarea,andconstraintsRefineand/ordescribetheproductconcept•Whatitis:•Whatbenefit(s)willitdelivertotheuser•Keyinformation–size,varieties,package,priceMarketResearchOptionsQualitativeDepthInterviewsFocusGroupsExpertJudgment19Pre-PrototypePost-PrototypeQuantitativeSurveysConceptTestsPerceptualMapsConjointAnalysisProductUseTestsLabTestMarketTestMarketConceptScreening/TestingProduceaConceptBoardConductasurveyRepresentativesampleofendusersviaInternet,PanelShowconceptandaskbuyingintent,uniqueness,value20AnalysetheresultsComparescorestointernalcriteria,benchmarks,normsForecast“Trial”Ifendusershowsinterestintryingtheproductduringthetrialforecast,thentheconceptqualifiesfordevelopment–Itclearsthefirststagegate.ProductDevelopmentInitialstageswithbroaddesignparametersProduceearlyprototypesShowandobtainfeedbackfromendusersRefinedesign21Finetune&finalisedesignVaryformulationsonkeyingredientsConductproducttestingamongstendusersExperimentaldesignsoffermostpowerfullearningOpti