Case Study 8Case Study 8

New Product Development (NPD)Tony Gauvin, 1006

Company 8Company 8 Financial Services firm

Consumer retail banking 200 banks in 20 States 30% market share

Goal – New (High-tech) Product Development Improve image as a technologically advanced in

institution Online store providing consulting for customers

that wanted to start their own businesses Theme

“Marketing is a process for creating and delivering goods, services, and ideas to customers “

Company BackgroundCompany Background

NPD into the online environment failed Focused on e-commerce and CRM Failed to thoroughly understand BI

syndicated research issues Concern over technology-image decline Entrepreneurial customer base

product to start own business bank would leverage intra and extranet

technologies

OverviewOverview

Marketing department reports gradually declining customers satisfaction compare to major competitors Company’s technology image Overall customer satisfaction Willingness to recommend

Award winning intranet and extranet technology

Goal- increase in key indicators in relation to competitors

Goal and strategiesGoal and strategies Create a new, high-tech retail banking

product Process >> new product development Data

Syndicated research study Employee interviews

Marketing, IS and Advertising company Idea generation Idea screening

Result Electronics store infrastructure Market-driven (need) Technology driven (been there –done that)

New Product Development New Product Development (NPD)(NPD)

Six types of new products (review) New-to-the-world products New product lines Additions to existing product lines Improvements and revisions of

existing products Repositioning(s) or restaging(s) Cost reductions

Managing the New Product Managing the New Product ProcessProcess

Idea generationIdea screening

Concept development and testingMarket strategy development

Business analysisProduct development

Market testingCommercialization

New Product Failure RateNew Product Failure Rate

98-99%

80%

98-99%

80%

Depending on the studyDepending on the study

NPD MethodNPD Method

Organizational improvisation (Moorman 2001) Simultaneous planning and

implementation Requires

High levels of internal knowledge Real time communications among product

team members Outside-looking-in information source

NPD methodNPD method

Technology Map (Capou and Glazer, 1987) Conduct technology resources

inventory Address resource gaps Determine “what to sell” Evaluation of new Product

The productThe product Online Stores

Maintained and handled by Company 8 $1000/month

Promotions Free hosting for 90 days

$150 savings In branch merchandising Direct sales

Result – Sales far below expectations Regroup (focus groups) and reintroduce Results 75 stores in 2 years (expected 300)

Withdrew product

General Reasons for New General Reasons for New Product FailureProduct Failure

CEO ego Market size overestimated Poor design Incorrect positioning Incorrect advertising Overpriced High development costs Competitor reaction

Why Did It Fail?Why Did It Fail?

Further into NPD before simultaneously implement?

Step 3 in the organizational improvisational plan outside looking in information source

Issues range of technological sophistication and product

support services out-of-core competency

Surprise Key indicators all improved

StakeholdersStakeholders

Customers Serving current

Shareholders Negative impact

E-Biz ComponentsE-Biz Components

eCommerce Online store front

Business Intelligence Surveys (Advertising & employees) Did not survey customer till after deployment

Customer Relationship Management Goal of the project

Supply Chain Management N/A Enterprise Resource Planning N/A

Value Bubble AnalysisValue Bubble Analysis

Not initially included in promotion and communications Assumed that off-line and on-lien

customers behaved the same Technology savvy customers ignored

the traditional marketing since it was ALL place-bound in the physical banks

Used ATMS and online banking Value Bubble analysis is based on

what should have been done

AttractAttract

Did not do much Should have

Off-line and online traffic building Press releases SEO Reciprocal links

Technologies Site design ASP CSS JavaScript JSP

EngageEngage

Did implement Password for eSupport Community section Helpful hints

Technologies Java calculators HTML forms Did not use DOM

RetainRetain

Intended to provide Updates and enhancements Send e-mails Redo “helpful hints”

Technologies Account and password “caching” Should have

Cookies (greetings) Database

Learn Learn

Good implementation Pop-up surveys for customer

satisfaction Customer registration Profiling

Technology ASP JSP Database Clicksteam??

RelatingRelating

Customizable navigation based on usage

36 hour turn around on tech support Technologies

ASP PHP CSS JavaScript

Success or FailureSuccess or Failure

FAILURE with this product SUCCESS with the objectives Problems

Bad BI Not customer concentric Product did not match customer wants and

expectations Moved away from core-competency Organizational improvisation for small “fleet-

of-foot” technology companies not BANKS Future success likely if they have “learned

their lesson”

SummarySummary

Good example of a dot.com failure More learning is available by analyzing

failure than success Questions??