New Product Development

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Chapter 1 Introduction. New food product development represents a monumental investment for a company, both in money and human resources. The odds against success are disheartening. The rewards, on the other hand, can mean the continued profitability of the company.Many in management believe new product development to be the life blood of any food company.The failure rate in new product development is, indeed, horrendous..

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New Product Development

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1. New Product Development Introduction New product development process Organization Idea generation Business Analysis Qualitative refinement and quantification Development and testing of new product Development and testing of advertising and packaging Market test Business plan preparation Full scale marketing

2. Chapter 1 Introduction New food product development represents a monumental investment for a company, both in money and human resources. The odds against success are disheartening. The rewards, on the other hand, can mean the continued profitability of the company. Many in management believe new product development to be the life blood of any food company. The failure rate in new product development is, indeed, horrendous.

3. Chapter 1 Introduction I. Defining New Food Products II. Classification and Characterization of New Food Products III. Why Go Into New Food Products Development?

4. I. Defining New Food Products There is no single definition that fits perfectly. New packaging on an old product can justify its being classified as a new product. An old, established product positioned into a new market niche is a new product. A new package size of an old product is also a new product. The never-before-seen product is also a new product.

5. Definition of New Food Products Development Either the development and introduction of a product not previously manufactured by a company into the marketplace or the presentation of an old product into a new market not previously explored by a company.

6. II. Classification and Characterization of New Food Products A. Line Extensions B. Repositioned Existing Products C. New Form of Existing Products D. Reformulation of Existing Products E. New Packaging of Existing Products F. Innovative Products G. Creative Products H. Summary

7. A. Line Extensions Line extensions represents a logical extension of a family of similarly positioned products The new food product that require: little time or effort for development , no major manufacturing changes in processing lines or major equipment purchases, relatively little change in marketing strategy, no new purchasing raw material sources, no new storage or handling techniques for either the raw ingredients or the final product. This means that regular distribution systems can be used.

8. B. Repositioned Existing Products A company can be very startled to find, either through their consumers’letter or through product usage surveys, that their consumers have come up with a new use for an existing product. This may allow a whole new market direction to be taken and give a new life to an existing product. The new products require: minimal time, no manufacturing changes, marketing department to design and print new labels, to design a new package, and to prepare a new advertising strategy.

9. C. New Form of Existing Products Putting an existing product into a new form is a radical departure from the type of new product development. An instantized, solublized, granulated, tableted, powdered, foamed, concentrated, spreadable, frozen, or otherwise modified version of an existing food product can involve extensive development time. The new products require: major equipment purchases both for manufacturing and packaging, processing and its supporting system may be different, vastly different warehousing and distribution system.

10. D. Reformulation of Existing Products The ‘new, improved...’product is typical of category. Reformulation of a product to make some improvement (e.g, better color, better flavor, more fiber, less fat, greater stability) has a high probability of technical success. Usually reformulation to obtain an improvement can be accomplish comparatively inexpensively and in a relatively short development time. Reformulation may also be necessary to satisfy the consumers’demand for a healthier products.

11. E. New Packaging of Existing Products In its simplest form, the packaging of bulk produce into unit packages typifies this category. New technologies such as modified atmosphere packaging and controlled atmosphere packaging have permitted the creation of a number of new products. The packaging and brand-labeling of produce and meats are other examples of existing products being given a new life as a new product. The new products require: expensive packaging equipment be purchased, redesign of the entire packaging line, reformulation for some products .

12. F. Innovative Products An innovative product is one resulting from making changes in an existing product. The new products require: very little research and development in terms of costs and time education of consumer, both costlier and riskier than any other path of new product development. Example A frozen dinner Simulated products Peeled ready-to-eat food

13. G. Creative Products A creative product is one newly brought into existence: the rare, never-before-seen product. Surimi, a fish gel developed several hundred years ago, and its development into texturized shellfish analogues. Creative product require extensive development time and cost. Marketing is costly and capital costs for equipment can be expensive. The introduction of creative products into a market can be very risky. If the products are successful, imitators will rapidly flood the market and take advantage of the time and effort of the developers

14. H. Summary Typical problems faced by developers as they attempt to bring to market new product. The 1st solid, at the origin, depicts the situation of an established product in a known market. The 2nd solid represents the situation when the company takes the same established product into a more complex marketplace situation. The 3rd solid is a product with added value (increased product complexity) introduced into a marketplace that is known to the company and aimed consumes known to the developer.

15. H. Summary The 4th solid represents the added-value product has been introduced into a more complex marketplace, one previously unknown to the developer. The 5th solid represents another repositioning problem. An established product is targeted for an elusive consumer but in a familiar marketplace. The 6th solid represents the worst of all possible worlds. A technically complex product (i.e., with added value) is to be positioned for elusive consumers in a market foreign to the developer.

16. The potato tree, illustrating product complexity, marketplace complexity, and consumer elusivity

17. III. Why Go Into New Food Products Development? A. Product Life Cycles B. Corporate Reasons for New Product Development C. Marketplace Reasons for New Product Development D. Technological Reasons for New Product Development E. Governmental Influences on New Product Development

18. Chapter 2. New Products Development Process A. Guidelines and Objectives B. Concept Generation C. Business Analysis D. The Concept Refinement System– Qualitative Refinement E. Quantification and the Blueprints F. Business Analysis Check G. Developing and Testing of Products H. Developing and Testing of Advertising and Packaging I. Business Analysis Check J. Market Test K&L Business Plan Preparations and Full Scale Marketing

19. A. Guidelines and Objectives Both a set of guidelines and very specific objectives (by time period) for your new product development program. The guidelines and objectives should not only be cleared by top management, but also be disseminated to and agreed upon by all departments. New product development is a team effort. That is the reason why you need to agree from the very beginning on your guidelines and objectives. (Chapter 2)

20. B. Concept Generation As part of your new product development program, you will need to acquire a large number of new product concepts– called concept portfolio A large number is very important. You should avoid dealing with one good idea. Rule #1 of concept generation: always work, in the early stage, with a large number of ideas and handle them in convenient groups. Aimed at satisfying known consumer needs with appropriate technology to be selected later. (Chapter 4)

21. C. Business Analysis Remember, the whole objective of new product development is to develop a business. In the business analysis system covered in Chapter 5, we apply a system of analysis to each concept. This system allows us to sort our concepts by viewing them as potential business propositions. It will allow us to estimate future efforts before we spend any market research dollars. We must always keep in mind that our ultimate goal is to develop business, not product.

22. D. The Concept Refinement System– Qualitative Refinement The refinement process begins with focus group interviews involving members of the target market. In the most simple case, three focus groups should suffice for up to six concepts. Each group consists of about 12 participants, and is moderated by a trained, professional moderator.

23. Objectives of the Concept Refinement System The 1st, it allows us to identify the new concepts that have some general consumer interest. The 2nd, in any focus group, a large number of concepts will neither immensely interest nor be rejected by the consumer. The 3th, the most important thing to be learned from the focus groups is the consumer’s understanding of the product concepts. Finally, you will have isolated a few new product concepts that appear to be interesting to the consumer, and the list of attributes (??) for these concepts.

24. E. Quantification and the Blueprints Once the concepts have been polished by qualitative research, we need to ascertain the nature and magnitude of the business proposition we are facing. Objectives of providing us with following data: An estimate of each concept’s sales potential Demographic (target) refinement (including psychographics) The Positioning Blueprint (for use in creating advertising, packaging, and naming the product) The Product Blueprint (for use by R&D)

25. E. Quantification and the Blueprints The sales volume figure is important because it will be a key factor in your equation of just how desirable a business this new product concept really is. The blueprints are the most important output of this system. Positioning Blueprint is the base for all consumer communications. Product Blueprint is the communication with the R&D/Manufacturing Group. In Chapter 6 we will go through the refinement system.

26. Positioning Blueprint

27. Product Blueprint

28. F. Business Analysis Check To re-evaluate each concept utilizing the data from the previous steps To use the same business analysis system applied in the Business Analysis step. To provide two additional and very important pieces of data A rough sales potential projection for each concept To see much more clearly how the final product should appear, what must be built into it, and what you want to say about it.

29. G. Developing and Testing of Products At this stage, you are able to submit the Product Blueprint to the R&D/Manufacturing Group. This blueprint will not only tell them what is that you are aiming to market, but also allow them to judge the desirability of various trade-offs in the development process, because it will show the relative weights of various product attributes that are part of the product. During the development process a great deal of testing with the actual consumer should be done.

30. H. Developing and Testing of Advertising and Packaging While the R&D is going on (assuming that no large changes will be made in the product concetp by R&D), you should be developing and testing its consumer communications. Most of this will be done by the advertising and the packaging.

31. I. Business Analysis Check This is probably the last step you can make before spending money in the marketplace. To utilize the latest trial and repeat-frequency data from product and advertising testing to prepare a tight financial plan. Using the business analysis system, you should make a last check of other variables to make sure that no large changes have occurred.

32. J. Market Test There are two choices. First, a traditional test market-which could be a geographical location (or a certain group of your consumer). Or, you can use a mathematical model that simulates conditions in your industry. (Chapter 10) The method you choose should yield the following: Very tight financial data. If you use an actual market, it should give you a great deal of data in the following areas: 1.Advertising weight and its relationship to consumer awareness and trial. 2.Marketing strategy and programs and further, trade strategy and programs

33. K&L Business Plan Preparations and Full Scale Marketing At this point, you are ready to convert what you have learned into a full investment decision. A final business plan and its execution in the marketplace should reflect what you are learned in the test marketing stage. If you have used an actual test market, you will have some fairly tight financial plan. If you are not able to do this, it is still necessary to make a financial marketing plan based on your best judgment.

34. Chapter 3. Organization Before we unfold the system for new product development, there are a number of organizational considerations that need to be discussed. These set the stage for the successful development of new products by defining the new product development program’s charter and role in the firm. A. The role of the chief executive officer in new product development. B.Organizing for the development of new products. C.Defining corporate assets (?????)of the new products developer. D.Setting the guidelines and objectives for the new product development program.

35. The role of the Chief Executive Officer in new product development The Chief Executive Officer, either implicitly or explicitly, always sets the tone for the new product development program of a company The tone is referred both to objectives, long-rang goals, level of acceptable risk, and to subjective values such as commitment.

36. The Chief Executive needs to do the following: 1. Making the long-range plan for the NPD department of the firm 2. Organizing for NPD 3. Setting the guidelines and objectives for a NPD program 4.Monitoring the activity of the NPD progarm

37. 1. Making the long-range plan for the NPD department of the firm To make any kind of investment decision correctly, the firm should have a long-range plan (10-year plan). The 1st section contained the plans for the coming year. The 2nd section contained the plans for the years two through five. The 3th section contained the plans for the remaining years.

38. If your firm does not have 10-year plan -- ask yourself the following questions What will my industry look like in five or in ten years– in terms of number of firms, overall growth rate? How do we want our firm to fit into the industry?Do you want to be the industry leader? Do you want to be more diversified than the average firm? What will our size be– in sales and assets? What kind of markets do we expect to serve in terms of consumers and geography? What kind of people do we expect to have? What kind of technologies or channel of distribution do we expect to own?

39. 2. Organizing for NPD (1) New Product Department (2) New Product Committee (3) New Product Manager (Brand Manager) (4) Venture Team

40. (1) New Product Department ?????????????? ?????????????????????????????,????????,?????????????????? ???????????????????,??????????????? ???????????????????????????????????

41. ?????????????

42. ??????? ??????? ?????????? ??????? ????????? ????????? ??????????????

43. (2) New Product Committee ??????????????? ??????????????????????????? ???????????????,??????????????,????????? ?????????,????????????????????????,???????????????

44. ??????????????? ??? ?????? ?? ?? ?? ?? ??

45. ????????? (1)????????????????? (2)??????????????? (3)?????????? (4)????????????? (5)??????????????

46. ????????? (1)??????????,??????????????????? (2)??????????,?????????? (3)???????????????????,?????????? (4)??????????????,???????,???????????????? (5)??????,????????????????????????

47. ????--?????? (1)???????????,??????????????? (2)?????????????????,???????????,?????????????????????? (3)???????????????,??????????????,??????????,???????

48. (3) New Product Manager (Brand Manager ????????????????,??????????????????? ????????????????????,?????????????? ???????????,???????,?????????????????????????????????? ?????????????????,?????????????,????????????????? ??????????????????,?????????????

49. ???????????

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53. ????????????????

54. (4) Venture Team ????????????????????????? ?????????? ??????????? ?????????????????????? ????????????????????? ????????????????????????????? ??????????,??????? ??????????????

55. ?????????

56. ??????? ????????????????????????????????????????,?????????? ??????????

57. **????????????????????? ??????????????,???????????????? ???????????????????????????? ??????????????????????????? ????????????????????????????????????

58. **??????????????????????? ???????? 69% ?????? ????????????????60.5%????

59. (1) New Product Department ?????????????? ?????????????????????????????,????????,?????????????????? ???????????????????,??????????????? ???????????????????????????????????

60. ?????????????

61. ??????? ??????? ?????????? ??????? ????????? ????????? ??????????????

62. (2) New Product Committee ??????????????? ??????????????????????????? ???????????????,??????????????,????????? ?????????,????????????????????????,???????????????

63. ??????????????? ??? ?????? ?? ?? ?? ?? ??

64. ????????? (1)????????????????? (2)??????????????? (3)?????????? (4)????????????? (5)??????????????

65. ????????? (1)??????????,??????????????????? (2)??????????,?????????? (3)???????????????????,?????????? (4)??????????????,???????,???????????????? (5)??????,????????????????????????

66. ????--?????? (1)???????????,??????????????? (2)?????????????????,???????????,?????????????????????? (3)???????????????,??????????????,??????????,???????

67. (3) New Product Manager (Brand Manager ????????????????,??????????????????? ????????????????????,?????????????? ???????????,???????,?????????????????????????????????? ?????????????????,?????????????,????????????????? ??????????????????,?????????????

68. ???????????

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70. ????????????

71. ????????????? ???????????????????,?????????,?????????????????????,??????????????????? ???????????????????????? ???????????????????????????,???????????????????? ???????????????????,???????????,??????????

72. ????????????????

73. (4) Venture Team ????????????????????????? ?????????? ??????????? ?????????????????????? ????????????????????? ????????????????????????????? ??????????,??????? ??????????????

74. ?????????

75. ??????? ????????????????????????????????????????,?????????? ??????????

76. **????????????????????? ??????????????,???????????????? ???????????????????????????? ??????????????????????????? ????????????????????????????????????

77. **??????????????????????? ???????? 69% ?????? ????????????????60.5%????

78. To whom in the firm should this organization report? The 1st choice: Top Management The President or Executive Vice President This has the advantage of assuring top management commitment (??) and lends the aura (??????)of importance to the function. The 2nd choice: Vice President of Marketing The marketing department has a number of skills that are important to new product development: a knowledge of a consumers, a knowledge of the techniques of marketing research, a feeling for the role that the communications (positioning) values play in the development of a brand.

79. To whom in the firm should this organization report? The 3rd choice: Vice President of R&D Having the R&D department control NPD for a firm to be the least attractive of the alternatives Reasone 1: R&D department is often more isolated from the Chief Executive than the marketing department. Reason 2: This department is usually unskilled in market research and unfamiliar with consumer data Reason 3: This department is usually relatively unskilled at working with the positioning of a product.

80. 3. Setting the guidelines and objectives for a NPD program (1) Setting the guidelines The function of these guidelines is to set the parameters within which your activities will take place. This guidelines contain provisions (??) for the following area: Financial Brands/Image of New Product Marketing Manufacturing Facilities

81. Financial The NPD process is really a process of preparing investment alternatives for the firm. Therefore, the guidelines should include the financial expectations for a new product.

82. Brands/Image of New Product Often a firm will include in its gridelines the mention that a brand currently owned by the firm must be utilized or The new product should fall into some quality or image area.

83. Marketing What kind of channels of distribution? The cost of setting up new channels of distribution can be expensive and lehgthy It is normal that the guidelines specify the current channels of distribution. If the industry requires some minimum sales volume for maintaining distribution, this should be included as a guideline

84. Manufacturing Facilities The guideline must make it explicit whether it is acceptable to manufacture products outside or whether it is necessary to utilize the firm’s own facilities. Acceptable investment levels for new equipment should be specified

85. (2)Setting the Objectives A reference that agreed-to guidelines will be observed, and a restatement of the financial parameters for an acceptable product. You should make a statement showing the number of products that you intent to ready for the marketplace (either test marketing or full scale marketing) and the time period within which this will take place You need to show the other activities the new product program will be involved in in order to provide market-ready products in the next year.

86. 4.Monitoring the activity of the NPD progarm

87. A Case Study– the Middle South Milling Company Middle South Milling was started in Missouri in 1932. Product: flour, Mother’s Secret, a standard bleached flour, 12million/year Distribution Area: Missouri, Kansas, Tennessee, Arkansas, Oklahoma. In 1947 Middle South was purchased by J.R.”Red”Jackson, canning vegetable and fruits Jerome, a management consulting firm in Chicago for 8 year, took over Red in 1973

88. Jerome and Middle South --guideline for NPD program Make a listing of the assets (????) of Middle South sales system -- 47 brokers in 30 states Two brands – Mother’s Secret and Southern Delight Professor Hartman’s technology Three corporate assets for his guidelines: The distribution system The brand name has high consumer recognition Professor Hartman’s process

89. Jerome set the guideline and objectives for new product development Guideline for financial/marketing Any new products should have the potential for reaching a breakeven sales volume by the 24th month after a full-scale introduction. A pay back (??) of no more than 36 months and a return on investment of 10% Manufacturing start-up costs should not exceed $100,000 if we have to use our own facilities. If we are to use an outside processing plant, there must be more than one available.

90. Guideline for marketing/product The product should have no ingredients that might eventually become very difficult or costly to obtain. Any new product should have an estimated life cycle of a minimum of five years. New products using one of the current brands are preferable, but this is not a mandatory guideline. Any new product should have, as a minimum volume, a sales potential of one case per store per month. (Jerome knew this was the industry’s rule of thumb for maintaining distribution) The current distribution system of brokers and retailers must be used by the new product.

91. From the guideline Jerome set the following objectives for NPD 1. We will develop a systematic approach toward the development of new products. This approach must contain provisions for (a) the generation of ideas, (b) the evaluation of these ideas as potential businesses, (c) the refinement of these ideas by consumers. 2. We will have one product ready for introduction into test markets within 18 months. 3. We will stagger our consumer research and product R&D so that we will be able to test market a new product on the average of every six months following the introduction indicated our first new product. 4. All new product development will fall within these agreed-to guidelines.

92. At this point Jerome, after interviewing several candidates for the job, decided to hire you. You accepted the Middle South offer, and assumed control of its new product development program, reporting directly to Jerome Jackson

93. 5.Organizing the generation of new product concepts The purpose of this is to cover the next step-the preparation of preceding new product concept generation (1)Converting the guidelines/objectives into language appropriate for ideation (2)Defining the competitive environment and understanding your potential customer (3)Sources of ideas for new products

94. (1)Converting the guidelines/objectives into language appropriate for ideation Aiming at developing a certain kind of product Aiming at a category The use of technology Aiming at providing a specific end benefit The use of an asset

95. Aiming at developing a certain kind of product By using this kind of direction, you show the kind of product that you would like to develop– but not its specific attributes Example: You might aim at developing a shampoo, specifically designed for senior citizens. You would give more information, of course, but stating a direction this way should allowed most of people helping you to generate things like the consumer end benefits, product form, and delivery system, to enable them to provide a wide spread of concepts. You are assured that the end result will be in the area in which you are interested.

96. Aiming at a category Using a category rather than a product allows for a wider spread of ideas. For example: If you are a company that markets mechanical office supplies– staplers, paper-cutters, punches, and the like, it would be appropriate to set as a direction For large and small offices and home use, with the product to retail between $2 to 15. The broader the direction you give, the more you will receive some ideas that are unusable. This can not be avoided and you should not worry about it. There is a certain waste in concept generation, and you should accept it as a cost of doing business. You need to make sure that you have developed a large enough bank of ideas.

97. The use of technology Use of technology usually occurs after a laboratory discovery. It is usually impossible to decide whether it is commercially feasible without first deciding what it might look like in a saleable form, or what its market might be. Therefore, the next step is to convert it into new product concepts. For example: a pharmaceutical firm discover a chemical that inhibits the growth of mold Ideas:

98. Aiming at providing a specific end benefit You can aim at providing your customers with a specific end benefit. For example: low fat or reduced fat sausages ???

99. The use of an asset (????) The distribution system The brand name has high consumer recognition Professor Hartman’s process It is commonly the case that a concept project aims at using one or more of these assets For example: We will develop a group of new product concepts that are based on the positioning of our brand X.

100. (2)Defining the competitive environment and understanding your potential customer Before beginning the concept generation process, it is necessary to make a complete review of all data available about the kinds of products you are interested in developing. This data will be one of three types: Secondary Data Primary data owned by the firm New primary data

101. Secondary Data In most industries, a good deal of secondary data is available. The places you should look at: Industry Publications Advertising Agency Government Data Internal Sources Professional Firms

102. Secondary Data— Industry Publications Almost every industry has a number of publications that serve it. Typically, they specialize in that some tend to be concerned with manufacturers’ points of view, and others with the point of view of supplier or people in the channel of distribution. These publications are often very useful in that they report trends, or sometimes report sales figures, etc. Talk to the editorial staff. They have a great deal of data available that they have not reported.

103. Secondary Data— Advertising Agency Most advertising agencies keep information files that relate to their client’s activities. It is a good start to let your agency know immediately of your needs so they can be most helpful. It is very often possible to buy the kind of data you need from larger agencies by contacting the correct person at that agency. The larger agencies are generally better equipped information-gathering area.

104. Secondary Data— Government Data The U.S. Government publishes data on various industries. The best place to start is the public library. You should write to the Department of Commerce and state your need.

105. Secondary Data— Internal Sources The firm already contains a great deal of data. It may be in a company library, or it may be information that people are carrying around in their heads. Often, people carry around data in their heads in the form that is useful to them. Regardless of the potential problems, internal sources cannot be overlook. If you talk to enough people, you should be able to get a composite picture that will be helpful to you.

106. Secondary Data— Professional Firms If you do not have access to the information gathered by a large advertising agency, or do not have your own company library, the professional firms represent the best single source of data available to you. The firms can provide with a reasonable thorough search within a short period of time. FIND is a well known professional firms in New York City.

107. Primary data owned by the firm Very often your firm will have done research about its markets. In the food industry you might find that there is retail movement data (measurement of sales through retail stores), usage and demographic studies (the kinds of people who consume the products, how they consume it, when or how often they consume it, etc.), consumer attitude data, tests of advertising and promotion, and the like. It is not uncommon for the new products developer to lack this kind of information.

108. New primary data Developing your own primary data should be no problem and need not be expensive in time and money. It is possible to generate good data by interviewing a small number of customers, as few as 20-30, but this will vary depending on the size of the market. It is important to define the kind of information that you want ahead of time. How do people see the products currently in the marketplace? What brands are they aware of ? What brands do they currently use? How do they use these brands in terms of day? Time for year?

109. New primary data -- define the kind of information that you want ahead of time What product attributes are important for the brand they use most often ? What product attributes are important for other brands they are aware of ? What brands that they tried? Why did they reject them? How do they think they go about deciding which one to purchase? Who in the family actually makes the decision to buy products of this kind? Who in the family will make most use of the product? What improvements should be made in current products?

110. New primary data All of the above will give you an idea of the information you should gather. You should have a fairly complete idea of how your potential customers fell about the marketplace. You need to synthesize it into a presentation for those who will do your new product concept generation for you. But actual new product concepts almost never will come from this step. You must not expect people will telling you how to create the next good new product or category. It may happen, but it is unlikely.

111. (3)Soueces of ideas for new products Generally, we are going to have to develop our own portfolio of new product concepts. However, before we get into techniques for generating new product concepts, we should look at a list showing the sources of ideas for new products. A concept is a well-formed thought for a new product, including a reasonable description of what it would look like and how it would act An idea is simpler and it usually not much more than a bare-bones thought about a possible new product

112. A list showing the sources of ideas for new products Advertising Agencies Consumer Research Our R&D Department Firms Specializing in Creating New Product Concepts The Company’s Marketing Department R&D Consultants Customers and Other Outside Individuals Selecting a New Products Consulting Firm

113. Advertising Agencies Generally, the advertising agency is staffed by persons who are trained to see things in a innovative way. Very often they will have suggestions for improvement or modification of your current product. Given proper direction, they are also a good source of new product ideas.

114. Consumer Research The consumer may suggest an improvement in a product or new product for your company. You should alert your Market Research Department to your interest in these kinds of ideas and periodically ask them if they are engaged in projects that might generate these idea.

115. Our R&D Department The R&D Department is a rich source of ideas. They often have potential suppliers talking to them about new technological development, and the like. It is necessary for you to establish a strong liaison (??) with this department. You should be frank with them about the goals of your program and the direction that you are taking, and ask them to forward any ideas or pieces of data that seem relevant.

116. Firms Specializing in Creating New Product Concepts There are a number of firms that specialize in creating new product concepts. It is useful to interview several before you decide to use one. You can obtain the names of some responsible firms through your advertising agency or through other new product development practitioners. Generally these firms have some new business development program and your fellow practitioners will have heard of several of them.

117. The Company’s Marketing Department Alert all members of the Marketing Department to your program’s aims and the kind of new products that you are interested in. Many marketing people are innovative and will often have whole host of ideas for new products that they have tucking away. Once they understand your needs, they will help you keep track of potential competition by telling you of rumored or actual products that have entered the marketplace.

118. R&D Consultants Most industries have outside firms that will do R&D work. Often these firms independently produce a new product and then attempt to sell it. They may approach you own R&D Department, and you should let it be known that you are receptive to new ideas. But it does little good to solicit these firms. Their new products are usually the result of experimentation. You would not want them working with the thought of selling the product to you at the end. Therefore, letting your R&D people, and those in the industry, know that you are receptive to ideas, is an excellent course of action.

119. Customers and Other Outside Individuals It is not uncommon for customers to mail in ideas on product improvements, and for outside individuals to submit new product ideas to your firm. Few worthwhile ideas ever come in this way. Acknowledgment of an acceptable idea leaves you open to legal action. Discuss this with your legal department. It is usually best to have a formal system that tells the person submitting the idea that you cannot accept or consider his ideas (but thank them).

120. Selecting a New Products Consulting Firm One good way to obtain new product ideas is through a professional new products consulting firm. Advantage: You can effect cost savings The providing objectivity will surprise you A wider range of imaginative ideas Their range of contacts

121. You can effect cost savings For many firms, the new products function is not a full-time function, and therefore employing someone in house with expertise in this area can be wasteful.

122. The providing objectivity will surprise you The fact that your own people can sometimes be too close to the problem to be perfectly objective, will come as no surprise to you. When you hire such a firm, you are obtaining the benefit of many years of experience in the new product process. Generally, you will find their judgment to be quite good. Perhaps saving you from wasting time and money by pointing out hidden risks and assumptions, unanswered questions.

123. A wider range of imaginative ideas They should be quite skilled in the area of concept generation and concept refinement. As a rule, manufacturers do not keep experts in this filed on their staff. Therefore an outside firm should not only be able to provide you with a wider range of imaginative new product concepts than you could generate, but also be better able to assess these concepts as business propositions than you can.

124. Their range of contacts A firm that has been in business for a number of years should have a good grasp of what the industry is doing and what the trends are. They can often suggest an acquisition or the purchase of a brand from another company. They can obtain data from the industry with anonymity, thereby protecting your own firm from exposing its area of interest.

125. Chapter 4 Idea Generation Some rules before for putting together your own concept portfolio Generating a portfolio of new product ideas A tool kit for assisting in concept generation Using some creativity tools

126. Some rules before for putting together your own concept portfolio 1.The more ideas you start with, the better will be the final concept(s) 2.It is not advisable to count on consumer research for the generation of ideas 3.Do not set the parameters too tightly.

127. Generating a portfolio of new product ideas The straight line method of thinking is fine for solving problems in your daily life. It can also result in new product concepts. But you can not depend on it for the sole support in your idea process.

128. A tool kit for assisting in concept generation Before we get to discuss the creativity tools, it is necessary to discuss the rules of brainstorming. Brainstorming is the setting in which we are best able to make use of the creativity tools. It is not a special technique but a special atmosphere that encourages the application of the principles and the techniques... of conceptual ideas. Brainstorming, with any of the creativity tools to be discussed later, can be done either within the context of the group, or be oneself. Basically, brainstorming is s free-wheeling situation in which the participants feel free to say anything that comes to their mind with even the vaguest relation to the problem being discussed. This does not mean that brainstorming is an out-of-hand situation. Actually, in some ways, it is tightly controlled.

129. The rules of brainstorming 1. The need for a leader or moderator. 2. Definition of problem. 3. Size of group 4. Openness to ideas 5.The suspension of judgment (the avoidance of criticism). 6. Challenging assumption 7. Cross-stimulation 8. The need for creativity tools in a brainstorming group.

130. 1. The need for a leader or moderator It is important in a brainstorming session that someone takes charge. This person needs to make sure that the problem is defined and that the relative information is disseminated. To make sure that the rules of brainstorming are followed and that the group generally keeps moving toward the areas of interest. He should not impose his views on the group, nor constrain the activity too much. He should assume the role of a benevolent leader and the jealous protector of the right of strange ideas to extit.

131. 2. Definition of problem It is important that everyone have an idea of the problem to be discussed. Everyone has an adequate grasp of the information that is generally available. Both these functions must be fulfilled or arranged for by the moderator.

132. 3. Size of group Generally, brainstorming requires a group of somewhere between 5 to 10 members. This gives everyone an adequate chance to participate and to feel involved. Any more is very unwieldly. Less than five is usually inadequate because it puts too much pressure on the participants. Fewer people -- If they feel comfortable enough with one another and the idea of brainstorming, it can work.

133. 4. Openness to ideas The most important thing about brainstorming is that the setting (?????) must be made. Every member feels perfectly able to say whatever he thinks might relevant to the issue. The moderator must maintain this right of each member and should make it clear ahead of time that this situation exists. The brainstorming session provides a formal opportunity for people to make suggestions that they would not otherwise dare make for fear of being laughed at. No idea is too ridiculous to bring forward.

134. 5.The suspension of judgment (the avoidance of criticism) It is absolutely essential in brainstorming that no criticism of anyone’s ideas be made. This is called suspension of judgment and is the most difficult for first-time brainstorming group members. The moderator must be cautious about comments that begin with any of the follow: The would never work because...; It is well-known that..., This is silly, and impractical idea... ; It would be much too expensive... ;How would you get that to... No one would accept that... ; We have tired that...

135. The moderator must be cautious about... These are very natural comments, but if they are allowed, then the brainstorming session is useless. Not only is one forbidden to evaluate the ideas of others, but also his own ideas. It is the job of the moderator of the session to stop any attempt of evaluation. He must make this quite clear at the start of the session. He need only say ’that is an evaluation’ in order to put a stop to it.

136. 6. Challenging assumption The moderator should make clear that every assumption implicit in the problem and the information given is challengeable. Every member should feel free to say why he feels uncomfortable with an idea and suggest modification.

137. 7. Cross-stimulation The provocation is supplied by the ideas of others. Since such ideas come from another, it stimulates one’s own ideas. Even if one misunderstands the idea, it can still be a useful stimulus. Although the ideas in a brainstorming session are related to the problem under discussion, they can still act as random stimuli. The moderator should promote as much cross-stimulation as possible, asking one member to build on another’s ideas, or asking one member to follow the same train of thought (even if he must force himself to). Cross-stimulation is an essential ingredient in a brainstorming group.

138. 8. The need for creativity tools in a brainstorming group Unless you are very fortunate, the brainstorming group will, on occasion, get stuck. It will not be able to proceed further, and on one will be satisfied with where it currently is. The moderator can move back to an earlier phase and ask to develop ideas in a different direction. Or, he can use some game or creativity tools to stimulate the group to think it in new areas. These tools are absolutely essential for the new product developer whether he is working by himself or when he is running a brainstorming group.

139. Using some creativity tools 1. Attribute Listing 2. Morphological Analysis 3. Synectics Fleshing Out Core (Skeletal) Concepts

140. 1. Attribute Listing It is a technique in which you break down the product that you would like to improve or the new product that you would like to develop into its attributes. You select one or several attributes, and the group develops new products or improves the current product by changing attributes (all others remain constant or disappear, if necessary) It allows some focusing without any real rigidity, and you will soon find groups are more able to handle one or a couple of area than completely reformulating or changing a whole product.

141. Example For Attribute Listing Target: Invent a New Cereal, which would be positioned as a light (??) evening meal, or perhaps a late snack. Attribute listing for cereals Shape, Color, Size, Smell, Nutrition, Flavor, Price, Package, Texture Let us take three: size, nutrition and smell Let us force ourselves to invent new products that are basically cereals, using only these three factors.

142. Ideas for a New Cereal 1. A low-nutrition cereal that would not be fattening, which has the smell of fruits, and which comes in nibble-size pieces so that you can eat it dry while you are watching T.V.. 2. A cereal for dieters that represents a light evening meal. The pieces are big that you can hold them in your hand, and eat them like a small sandwich alone with a glass of milk. It is low in calories and has the smell of a bacon, lettuce and tomato sandwich. It is very chewy to give you the satisfaction of chewing and swallowing. 3. A cereal for people on a low meat and dairy diet (either for medical reasons or personal preferences). The pieces will be various sizes and chewy. It will be low fiber and high in vitamins, particularly B, which you would normally get from dairy products. It would have the smell of a cheeseburger.

143. Some strange phenomenon The more familiar the members of the groups are with a certain product, the more difficult it is for them to agree on the basic attributes of that product. The expert knows too many reasons why something can not be done, so he never tries.

144. 2. Morphological Analysis Another way of bringing together attributes that would not normally be related -- and this new combination then allows you to think in previously unexplored areas. Morphological analysis is a very useful tool for organized creative activity.

145. 2. Morphological Analysis The procedure is as follows: The statement of the problem should be as broad and general as possible, and then all of the independent variables must be defined broadly and completely as possible. Each one of these independent variables becomes an axis on the morphological chart. If there are n independent variables, we will have a chart of n dimensions. Each of the independent variables can probably be expressed a number of different ways

146. Example for Morphological Analysis Target: Invent a New Cereal, which would be positioned as a light (??) evening meal, or perhaps a late snack. Attribute listing for cereals Shape, Color, Size, Smell, Nutrition, Flavor, Price, Package, Texture Let us take five: shape, color, size, smell, texture And selected five end benefits: nutrition, flavor, eat wet or dry, easy to digest or eat, nonfattening

147. Example for Morphological Analysis The listing is coded to match the number in the upper left-hand corner of the block . For each number, the product attribute must be related to the end benefit in the concept. 2. A multicolored cereal that kids would eat as a dry snack after school (Color/Nutrition). 6. This is the fruit salad cereal. Different pieces look and taste like various fruits (Shape/ Flavor).

148. Example for Morphological Analysis 12. This is a cereal that changes (into fruit flavored) colors when you make it wet (Color/Wet). 18. This cereal consists of small, soft, easy to chew and digest pieces (Size/Easy to digest or eat). 25. This cereal is extremely chewy. You get so much satisfaction from chewing, that you eat less than normal (Texture/Nonfattening).

149. Conclusion of the above example We have gone through the grid and have a number of ideas. Frankly, none of these ideas are ready to be seriously considered as a new product concept. However, to take this exercise a little further, let us convert this cereal project into a three-dimensional grid. We have worked so far with two interesting variables, product property and end benefit. Let us add a third variable, means.

150. Three-Dimensional Grid Draw #1 is a cereal that is easy to digest or eat, which has some peculiarity about the size particle and which can be made of standard cereal grain. It is probably already invented. A great number of cereals, both hot and cold, that are on the market would fit this box. Draw #2 is a cereal made out of dairy protein. It has nutrition as an important attribute, and it has shape as an important product property. Draw #3 would be product made out of vegetable protein. It would have some interesting texture properties and would be easy to digest or eat.

151. 3. Synectics It is not a tool: it is a system for practicing creativity. It is far more important than any other tool in this section. Two areas of this system will be studied 1.How to run a meeting 2.How to use a brief excursion into excursion techniques -- which will provide you with a new tool.

152. 1.How to run a meeting Four major stumbling blocks (???) The 1st, chairman did not provides precise knowledge of what he expects, the members can easily become confused. An agenda alone does not solve this problem The 2nd, chairman habitually, albeit unwittingly, discourage creativity and free speculation. The 3rd, The chairman is likely to use his power unwisely. The 4th, we find in almost any meeting that there is a high level of antagonism toward ideas.

153. 1.How to run a meeting? Four major stumbling blocks (???) The 1st, chairman did not provides precise knowledge of what he expects, the members can easily become confused. An agenda alone does not solve this problem The 2nd, chairman habitually, albeit unwittingly, discourage creativity and free speculation. The 3rd, The chairman is likely to use his power unwisely. The 4th, we find in almost any meeting that there is a high level of antagonism toward ideas.

154. The traditional image of the strong chairman An executive who guides the discussions, hews to an agenda, makes instant judgments of relevance and usefulness, and parcels out assignments – to get things done. The results is that the old-fashioned chairman wastes talent, both his own and the group’s, and therefore time and money as well.

155. How can a chairman multiply the effectiveness of his people? The chairman must adopt a nontraditional attitude. He must come to view himself as the servant of the group (in the same way that the group views itself as the servant of the meeting). He must devote his entire attention to helping the group use its wits

156. How can a chairman to run the meeting? 1. The Rotating Chair 2. Stating the problem 3. Temporary Shelving 4. Spectrum Policy 5. Restating the Problem 6. Metaphoric Vacation 7. Toward the Solution

157. 1. The Rotating Chair There is quite a bit of evidence that the traditional chairman is self-serving and manipulative. It quite clear that members recognize this, resent it, and struggle against it, but more often subtly. Common response are: ‘He does not listen to my idea’or , ‘I think I could run better meeting than he does’ A habit of egocentricity in the chair severely limits the productivity of a meeting, and our recommendation is rotating chair. It is important that every member of a meeting group regularly have the opportunity to lead– to test and to shape his capability, and to taste the responsibility of sitting at the end of the table.

158. 2. Stating the problem In small, task-oriented meeting, the conference room should be arranged so the chairman can keep notes that all can see.-- Entering the dog food market The first step is to write a brief statement of the problem-- How can we enter the pet-food market with an advantage over the competition? The next step is for the chairman to ask the experts for a more detailed explanation of the problem The experts are Mr. B of marketing and Mr. C of R&D The chairman should listen to these questions with much more attention.

159. 3. Temporary Shelving (??) The chairman does not devalue this question. But since he knows it can lead to endless discussion of opinions which do litter or nothing to help with the problem at this point. Will you please write down the problem as you see it, and we will take it up later as a subproblem.

160. 4. Spectrum Policy The chairman is to force Mr. B to think about the positive value of Mr. A’s idea. Thus Mr. B will see a range of values in the suggestion, a range from good to bad -- a spectrum of values. The chairman has enforced the so-called spectrum policy, and by so doing he has accomplished more than may be apparent. Note that Mr. B has continued on to identify some approaches for the group that he himself finds acceptable. Not also that his approval signals Mr. A.

161. Example Mr. A : I think it would be a good idea to shape our dog food like bone and make it chewier. Mr. B: But there is already a dog bone The chairman: Just a second, Mr. B.. First tell us what you like about Mr. A’s suggestion Mr. B: Well, this change in shape is a good idea. Mr. A, if I get his meaning, wants to use shape to make our product more appealing to the buyers. We know the buyer’s view of the food is a key element --- the dog does not care much. The chairman: Now what troubles you about the idea of a chewy bone, Mr. B?

162. Example Mr. B: I am worried about the shape. Although the bone is traditionally associated with dogs and is good from that viewpoint, it is not new to the market One of our competitors is using it. Mr. D: Mr. B your concern over the bone shape not being new suggests to me that we might go in a completely new texture direction: let us have an ‘Instant Breakfast’ dog food or a ‘Metrecal’ (???) dog food. If the experts consider this a possible solution, they say so and the leader records and saves.

163. 5. Restating the Problem Next, the chairman asks that each member of the group write one or more statements of the problem as he understands it. The chairman then records these for all to see, adding any that occur to him. This stage gives each member the opportunity of make an official declaration of the problem a he understands it or of the goal he wished to attain. The more of these, the better -- and the more differences between them, the better. Imagination and temporary irresponsibility should be welcome.

164. Example 1. How can we capitalize on (??) the acceptance of the leading brand? 2.Why do not we devise a pet food that makes addicts (??) out of pets? 3.How can we make pet food that perfectly fits the buyer’s image of what the pet needs and loves? 4.Why can not we devise a pet food that the pet will choose every time in a taste test? 5.How can we make a pet food that the pet will eat and like so much he sends a message of thanks to his owner?

165. 6. Metaphoric Vacation (?????) Next, the chairman selects one of the subproblems or restatements listed (never his own) and notes it. He temporarily puts the problem out of mind with confidence that later, when his mind has rested, some new clue to solution will come to him. Thus: the chairman instructs, ‘please put the problem out of your mind. Now, can anyone think of an example of a striking image in the world of weather?’”thunderhead”(???), “A thunderhead is beautiful, but there are dangerous forces inside it” Vacation time (????) should last from 5 to 15 minutes, depending on the members’skill in focusing off the original problem and the chairman’s ability.

166. 7. Toward the Solution As his next step the chairman should bring the vacation to a close. The chairman asks the members to return to the problem in question #3 and to use the irrelevant comments about thunderheads to suggest unthought-of-lines of speculation. Mr. D: This idea of hidden danger in the thunderhead– it makes me think of hidden meanings. Could we perhaps put some sort of hidden meanings in dog food? Chairman: Do you mean that we should

167. Example Mr. D: This idea of hidden danger in the thunderhead– it makes me think of hidden meanings. Could we perhaps put some sort of hidden meanings in dog food? Chairman: Do you mean that we should somehow put extra meaning in dog food? Mr. D: Yes, but I do not know how? Mr. B: We should treat dog food as though it is more important than dog food. Mr. C: We can treat it like people food. This discussion leads to the notion that a dog food exactly like hamburger could be marketed directly through the butcher (??). Mr. B: Low product costs, good storing quality, and data suggesting that some people eat pet food.

168. 2.How to use a brief excursion into excursion techniques The use of creativity tools within the context of a meeting – in this case, the use of a metaphoric vacation. This vacation is similar to what the Synectics people call excursions.

169. Fleshing Out Core (Skeletal) Concepts After you have used these tools and generated a number of skeletal concepts (or core ideas) you need to flesh them out before you go on to prepare concept statements, and ultimately research them with consumers. What you need to do is examine each of the core ideas in a rigorous manner to make sure that you are stating it as strongly as possible, and you are stating it in as many ways as possible.

170. Concept Preparation Checklist 1. Combine 2. Eliminate 3. Adapt 4. Modify 5. Other uses 6. Substitute 7. Rearrange 8. Magnify 9. Minify 10. Reverse

171. Example 1: home hair dryer 1. Combine Combine a hair misting device with hair dryer to apply a conditioner, or a handing fluid to your hair and then quickly dry it into shape 2. Eliminate Elimination of the heat function and have a natural hair dryer

172. Example 1: home hair dryer 3. Adapt Adapt to plug into automatic cigarette lighter for emergency use and which can be carried in your automobile. 4. Modify Modify it so that it can be readjusted for oily hair or dry hair or for use on baby as well as adults (the first all-family hair dryer)

173. Example 1: home hair dryer 5. Other uses A window defroster for your automobile Promote its use as a dust remover for electrical appliances 6. Substitute Substitute a whirling nozzle instead of a straight nozzle Substitute batteries for the electrical input

174. Example 1: home hair dryer 7. Rearrange Rearrange the action so that instead of blowing hot air onto the hair, it sucks air into it. Hair dryer with moisture-sensing device 8. Magnify Can increase the heat output and make a quick dry model Can increase the size and sturdiness of the item and market a professional model.

175. Example 1: home hair dryer 9. Minify To reduce the size of the model to make it into a travel unit (perhaps with a folding handle) Make a small unit for children to use 10. Reverse To draw the water out of the hair, instead of causing it to evaporate through hot air

176. Example 2: hamburger for dog food 1. Combine 2. Eliminate 3. Adapt 4. Modify 5. Other uses 6. Substitute 7. Rearrange 8. Magnify 9. Minify 10. Reverse

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