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    New Product Development: Strategy, Tactics & Process Strategy, Tactics & Process

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    Noel Moses
    This document outlines strategies and processes for new product development. It discusses identifying opportunities, generating ideas, developing concepts, screening concepts, product development, test marketing, and commercialization. Key aspects of the process include cross-functional teams, developing a product design specification, different types of new products, using market research, and leveraging time to market. "Stage gates" are built into the process at concept testing and test marketing to reduce failure risk and produce winning new products. The overall marketing plan incorporates sales, finance, production, promotion and advertising plans.

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    New Product Development: Strategy, Tactics & Process Strategy, Tactics & Process

    Uploaded by

    Noel Moses
    206 views32 pages
    This document outlines strategies and processes for new product development. It discusses identifying opportunities, generating ideas, developing concepts, screening concepts, product development, test marketing, and commercialization. Key aspects of the process include cross-functional teams, developing a product design specification, different types of new products, using market research, and leveraging time to market. "Stage gates" are built into the process at concept testing and test marketing to reduce failure risk and produce winning new products. The overall marketing plan incorporates sales, finance, production, promotion and advertising plans.

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    Product development process

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    New Product Development

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    This document outlines strategies and processes for new product development. It discusses identifying opportunities, generating ideas, developing concepts, screening concepts, product development, test marketing, and commercialization. Key aspects of the process include cross-functional teams, developing a product design specification, different types of new products, using market research, and leveraging time to market. "Stage gates" are built into the process at concept testing and test marketing to reduce failure risk and produce winning new products. The overall marketing plan incorporates sales, finance, production, promotion and advertising plans.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    206 views32 pages

    New Product Development: Strategy, Tactics & Process Strategy, Tactics & Process

    Uploaded by

    Noel Moses
    This document outlines strategies and processes for new product development. It discusses identifying opportunities, generating ideas, developing concepts, screening concepts, product development, test marketing, and commercialization. Key aspects of the process include cross-functional teams, developing a product design specification, different types of new products, using market research, and leveraging time to market. "Stage gates" are built into the process at concept testing and test marketing to reduce failure risk and produce winning new products. The overall marketing plan incorporates sales, finance, production, promotion and advertising plans.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 32

    New Product Development

    Strategy, Tactics & Process

    Anand Subramaniam

    Knowledge speaks, but wisdom listens."


    - Jimi Hendrix

    Highlights
    NPD - Strategy NPD - Design NPD - Types NPD Process NPD - Levers

    Reason for New Product Failures


    Overestimating market size Poor marketing research Design problems Excessive development costs Incorrectly positioned, priced, or advertised Competitive reaction

    New Product Development Strategy

    New Product Development Strategy


    Original products Acquisition Product improvements Product modifications New brands through the firms own R&D efforts.

    NPD - Value Add


    NEW PRODUCT DEVELOPMENT

    GROWTH

    PRODUCTIVITY

    QUALTITY IMPROVEMENT

    BRAND MAINTENANCE

    Line Extensions New Products New Packages

    Reduce Cost Formulas Packages Manufacturing

    Quality of Design

    Conformance Special Situations Regulatory Environmental Specifications


    7

    NPD Strategy - Planning Levels


    Identity Company Strategy
    Mission Objectives

    Mission Objectives

    Business Units

    Business Strategy

    PRODUCT STRATEGY
    Technical Competencies Strategic Principles Organisation Alliances Categories

    Portfolio Strategy

    Project Mix Milestones

    PRODUCT PORTFOLIO STRATEGY


    Resource Levels

    Brands

    Project Strategy

    Resource Allocations

    PRODUCT DEVELOPMENT STRATEGY


    Timing Deliverables

    Projects

    Technical Approaches

    Cross Functional Team

    Technology & Quality


    Packaging Engineering/Process Engineering Quality & Safety Research & Development Industrial Engineer Mechanical Engineer

    Marketing
    Marketing Research
    Sales

    Manufacturing
    Operations Logistics Procurement Supply Chain Quality Control

    Finance & Admin

    Legal Affairs

    New Product Development Design

    Product Design Specification


    Environment Testing Safety Legal Quantity Materials Ergonomics Aesthetics Installation Service life Standards Performance Quality assurance Customer Timescale Storage Processes Patents Shelf life Packing Competition Weight Maintenance Politics Plant

    DESIGN CORE
    Size

    Disposal Shipping

    11

    New Product Development Types

    Product Development Types


    Generic (Market Pull) Description The firm begins with a market opportunity, then finds an appropriate technology to meet customer needs. Technology Push The firm begins with a new technology, then finds an appropriate market. Platform Products The firm assumes that the new product will be built around the same technological subsystem as an existing product. Concept development assumes a technology platform. Process Intensive Characteristics of the product are constrained by the production process. Customisation New products are slight variations of existing configurations.

    Distinctions with respect to the generic process

    Additional initial activity of matching technology and market. Concept development assumes a given technology.

    Both process and product must be developed together from the very beginning, or an existing production process must be specified from the beginning. Snack foods, cereal, chemicals, semiconductors.

    Similarity of projects allows for a highly structured development process. Development is almost like a production process. Switches, motors, batteries, containers.

    Examples

    Sporting goods, furniture, tools.

    Synthetic Fabrics

    Consumer electronics, computers, printers.

    13

    New Product Development Process

    New Product Development Process


    The Fuzzy Front End
    Opportunity Identification Idea Generation Concept Development Concept Screening*

    Product Development

    Marketing Plan Development

    Test Marketing*

    Commercialisation

    Positioning Development

    *Stage Gates

    15

    Opportunity Identification
    Internal sources
    Company employees at all levels

    External sources
    Customers Competitors Distributors Suppliers Outsourcing
    16

    Idea Generation (Ideation)


    Cross Functional Team Generate Ideas
    Brainstorming Suspend judgment Encourage creativity

    Identify Opportunity Areas


    Problem solving to bring new ideas to the table Sketching or prototype Idea prioritisation

    Generate New Product Concepts and evaluate against a set of company criteria for new products.
    17

    Concept Development
    Done by Marketing and/or Advertising Agency Conducting Focus Groups Objectives
    Judge whether the concept fits the opportunity area, and constraints Refine and / or describe the product concept
    What it is : What benefit(s) will it deliver to the user Key information size, varieties, package, price
    18

    Market Research Options

    Qualitative

    Depth Interviews Focus Groups Expert Judgment

    Surveys Concept Tests Perceptual Maps Conjoint Analysis

    Product Use Tests Lab Test Market Test Market

    Quantitative

    Pre-Prototype

    Post-Prototype
    19

    Concept Screening / Testing


    Produce a Concept Board Conduct a survey Representative sample of end users via Internet, Panel Show concept and ask buying intent, uniqueness, value Analyse the results Compare scores to internal criteria, benchmarks, norms Forecast Trial If end user shows interest in trying the product during the trial forecast, then the concept qualifies for development It clears the first stage gate.

    20

    Product Development
    Initial stages with broad design parameters
    Produce early prototypes Show and obtain feedback from end users Refine design

    Fine tune & finalise design


    Vary formulations on key ingredients Conduct product testing amongst end users Experimental designs offer most powerful learning Optimise final design and packaging
    21

    Position Development
    Develop positioning
    Target : Benefit(s) : Frame of Reference : Support

    Develop communications strategies


    Media strategy

    Test & refine copy


    Qualitative research Communications Check Produce, test and refine the advertisements

    Conduct final test (Stage Gate Review)


    22

    Marketing Plan Development


    Final Positioning Statement
    Target : Benefit(s) : Frame of Reference : Support

    Sales Plan
    Who will sell it? : Where will it be sold?

    Advertising Media Plan


    How will we advertise it?

    Promotion Plan
    Consumer promotion (coupons), Trade promotion (on-sale)

    Production Plan
    How will we make it? (make / buy analysis)

    Financial Plan
    How do we make the profit necessary to satisfy our share holders? Fixed Costs : Variable Costs : Breakeven : Targeted ROI
    23

    Test Marketing
    Two Stages:
    Simulated Test Market Live Test Market

    24

    Test Marketing (Contd.)


    Simulated Test Market (STM)
    Similar to Concept Test but with product Provide samples to consumers who are interested in the concept Measure both trial potential and reaction to product Reaction to product is used to forecast repeat rate Volume is forecasted on basis of both the trial forecast and the repeat forecast.
    25

    Test Marketing (Contd.)


    Live Test Market (LTM)
    To measure actual sales volume
    Controlled Behavior Scan Conventional normal channels.

    Track sales rate, trial, repeat Compare to goals and identify gaps Investigate and close gaps
    26

    Commercialisation
    National expansion of product
    Develop market rollout plan

    Can involve significant capital investment


    Brick & Mortar : Equipment

    Can involve distribution costs


    Slotting fees : Sales incentives

    Build product into a Platform


    Maintain growth and sustain competitive advantage
    27

    New Product Development Levers

    Time to Market
    Prioritise development projects Dont overload resources Rapidly staff the project according to plan Emphasise design re-use to minimise development cost & schedule Capture and document requirements and specifications completely Tightly manage requirements Plan concurrent development Tightly synchronise development activities Learn to work with partial information Prepare to roll out the product early Involve subcontractors and suppliers in development Plan and coordinate production requirements Resolve production problems quickly Create a comprehensive, realistic project plan Obtain personnel's commitment to the project plan Communicate project plans and responsibilities Identify project staffing requirements Plan development resource requirements Allocate and manage resources Use modular design approach Standardise parts and materials Balance testing and time-to-market considerations Create electronic mock-up of the product Simulate & analyse product designs early to minimise late iteration and physical prototypes. Tightly integrate analysis & simulation with design Use rapid prototyping technologies Use collaboration systems to facilitate communication

    29

    Points to Note
    New Product Development Process is used to reduce the risk of failure, and produce new winning products It should start with an opportunity identification step The Fuzzy Front End considers a lot of alternatives Business analysis occurs throughout the process Stage Gates are built in:
    At the concept test stage to justify development costs At the test market stage to justify going to market.

    The Marketing Plan includes a comprehensive set of plans that involve Sales, Finance, Promotions, Advertising and Production
    30

    Opportunities multiply as they are seized."

    - Sun Tzu

    31

    Good Luck
    http://www.linkedin.com/in/anandsubramaniam

    32

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