Managing the new product development process
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Managing the new product development process. Managing the new product development team. Introduction 2.New products as projects 3.The key activities that need to be managed 4.Screening and evaluation of projects 5.The R&D/marketing interface 6.Summary and recap.

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Managing the new product development process

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Managing the new product development process

Managing the new product development process


Managing the new product development process

Managing the new product development team

  • Introduction

  • 2.New products as projects

  • 3.The key activities that need to be managed

  • 4.Screening and evaluation of projects

  • 5.The R&D/marketing interface

  • 6.Summary and recap


Managing the new product development process

New products as projects

  • The conditions for innovation to occur are necessary but insufficient

  • The process is managed and operated by people

  • NPD is not the preserve of one department

  • It involves a variety of people across the organisation

  • Teams of people and project teams is at the heart of NPD


Managing the new product development process

The NPD process as a series of linked activities

Strategic

planning

Scientific and

technological

developments

Assembling

knowledge

Market

research

Society and

market

developments

leading to needs

R&D

Generating business

opportunities

Product concept generation

Screening

and evaluation

is not a one-off

activity –

it is a continual

process and takes

place at every stage.

Development of

product prototypes

Market and technical testing

Market introduction


Managing the new product development process

Matrix organisation structure

Full time

Part-time

Senior management

Sales

Production

Finance

Marketing

Research andtechnology

Business

Team 1

Business

Team 2

Business

Team 3


Managing the new product development process

Assembling knowledge

Networking by

organisations’

employees (gatekeepers)

Recruitment of

good people

Technology

monitoring by

R&D department

Licensing,

contract research,

patents

Knowledge base

of the organisation

Conferences, etc.

Company’s own

market research

Other companies including

customers,

suppliers,

competitors, etc.

Internal R&D

Publications,

databases


Managing the new product development process

Generating new business opportunities

Competitors’ productsand reverse engineering

Existing

products

Technology

Individuals

Unexploited

patents

Generation of

business opportunities

Brainstorming and

synetics

customers and

vendors

senior and

top management


Managing the new product development process

Need

Form

Technology

A better

vacuum cleaner without bags

Developing product concepts

For a product idea to become a new product concept,

Crawford (2000), argues three inputs are required:

1. Form;

2. Technology;

3. Need.

Example:

Similar design

Shape, maybe some

unique features

such as clear bin

Use of Cyclonic

forces and no

bag


Managing the new product development process

60 ideas are evaluated for:

Number

  • Technical feasibility

of research

  • Financial feasibility

ideas

  • Suitability

12 ideas worthy of evaluation through:

Technical evaluation & market research analysis

6 potential products worthy

of further development & analysis

3 prototypes for technical

& market testing

2 products

launched

1 successful

product

Evaluation of research project ideas

Evaluating research projects


Managing the new product development process

Evaluation criteria


Managing the new product development process

Evaluation criteria (Continued)


Managing the new product development process

Screening

  •   It is not a single, one-off activity;

  •  It occurs at every stage of the new product development process;

  • Do we have the necessary commercial knowledge and experience?

  •  Do we have the technical know-how to develop the idea further?

  •    Would such a product be suitable for our business?

  •    Are we sure there will be sufficient demand?

  •   The main purpose of screening ideas is to select those that will be successful and drop those that will not – herein lies thedifficulty e.g.

  • RCA identified TV but not VCR.

  • Kodak and IBM failed to see the potential in photocopying butXerox did


Managing the new product development process

The famous Apple Mac, launched 1984

The Xerox PC with GUI, 1983


Managing the new product development process

The key screening stages

  • Initial screen, entry screen or preliminary screen

  • Customer screen, concept testing

  • Technical screen, technical testing

  • Final screen

  • Business analysis


Managing the new product development process

Development of prototypes andtechnical testing

  • usually difficult to distinguish between the two;

  • technical testing is an on-going activity;

  • the stage where the product acquires finite form;

  • usually several different designs are considered.


Managing the new product development process

Market testing and launch

  • regional testing is often overlooked;

  • consumer research techniques are so sophisticated full-blown tests are no longer necessary;

  • be wary of consumer research, it may stifle innovation;

  • disruptive innovations may be spurned;

  • whereas sustaining innovations appeal to existing customers;

  • the importance of channel management in launch.


Managing the new product development process

Classification of new product development

activities across different industries

Industrial products

Pharmaceutical industry

Technological

activities

Electronics industry

Balance of

activities

White goods and

domestic appliance industries

Marketing

activities

fmcg

Food and drinks industries


Managing the new product development process

The R&D/marketing interface

  • Scientists and engineers are often heard berating their commercial colleagues for failing to comprehend the technical aspects of the project;

  • The main barriers to effective R&D/marketing interface have been found to be related to perceptual, cultural, organisational and language factors (Wang, 1997).


Managing the new product development process

The R&D/marketing interface (Continued)

  • Cultural difference results from the different training and backgrounds; Marketing managers tend to focus on shorter time spans than R&D managers who adopt much longer time frames for projects;

  • Language barrier;

  • The extent of the integration required between marketing and R&D varies between industries.


Managing the new product development process

Marketing and R&D’s perceptions of each other.

The ten most common complaints:

Technical people about marketing people

Want everything now

Are focusing on customers who don’t know what they want

Quick to make promises they can’t keep

Can’t make up their minds

Can’t possibly understand technology

Are superficial

Too quick in introducing new products

Want to ship products before they are ready

Are not interested in the scientist’s problems

Marketing people about technical people

Have a very narrow view of the world

Never finish developing a product

Have no sense of time

Are interested only in technology

Don’t care about costs

Have no idea of the real world

Are in a different world

Always looking for standardisation

Should be kept away from customers


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