Ph +61 3 9413 9000

info@bayly.com.au

www.bayly.com.au

Mark Bayly

Creating a New Product

The Secret Recipe for Success An eBook for Businesses creating

physical products for other businesses

Page 2 Creating a new product: The Secret Recipe for Success

Contents

What’s the secret? ........................................................................... 3

Introduction ...................................................................................... 4

Is this you? ....................................................................................... 5

Using your sales team ..................................................................... 6

What you need to do ........................................................................ 6

Step 1 - Market Research ................................................................ 7

Step 2 - Customer Research ............................................................ 8

Discovery interviews ................................................................... 9

Preference interviews ................................................................ 10

Step 3 - Product Research ............................................................. 11

Step 4 - Product Architecture ......................................................... 11

Why does this approach work? ...................................................... 12

About Mark Bayly ........................................................................... 13

About Bayly Group ......................................................................... 13

Contact Bayly Group ...................................................................... 13

Recommended reading .................................................................. 14

Page 3 Creating a new product: The Secret Recipe for Success

What’s the secret?

In truth, there really isn’t one.

Creating, launching and selling physical products is the key process for

many businesses. Some businesses sell products to other businesses

(business to business, B2B). Some businesses sell products direct to

consumers (business to consumer, B2C).

Published research from Cooper finds that an average of only 25% of

products that make it to market are successful.1 Research from

Strategyn suggests the rate of success is only 5% to 10% on average.2

Where else in our businesses do we accept these success rates?

Successful businesses really own their new product development

processes and are able to design, manufacture, distribute, sell and

support products on a global scale. They shroud their processes in

mystique, personality, stories of outrageous brilliance and foresight to

create emotional engagement between customer and brand. However,

there is really no secret to how they achieve new product success.

In simple terms, successful businesses have an effective new product

development process which is designed to:

1. Understand who their customers are

2. Discover the important problems their

customers are experiencing

3. Provide the absolute best and most

valuable solution to their customers’

problems

When you add to that a great design and development process, you can

achieve great new product developments that are successful 86% of the

time; an improvement of 300%+.2

A proven process

This is not a new process but has been developed over more than a

decade. It forms the fundamental new product development process at

successful companies like Du Pont, John Deere, GE, Dow Corning, ITW

companies and more. It is not complex and is accessible to any B2B

business to use to help create great new products.

25% of products that make it

to market are successful

- Dr Robert Cooper,

Winning at New Products

1. Cooper, RG, “Winning at new products”, 3rd Ed, page 11

2. Strategyn, “Innovation Trade Record Study”, 2014

Page 4 Creating a new product: The Secret Recipe for Success

Introduction

The purpose of this ebook is to share a way of increasing the probability

that your new B2B products will be successful.

Most businesses do not use a structured process to find out what their

customers want, nor do they know how to consistently deliver a product

that satisfies their customers’ needs. As a result, businesses waste

extraordinary amounts of their precious cash designing products that their

customers don’t want or need to buy.

What you are going to discover in this ebook is how having a clear product

vision, a blueprint for uncovering your customers’ needs, a proven and

robust product development process and faultless market launch approach

can improve your probability for new product success.

Through this ebook you will learn how the most successful businesses use

a New Product Blueprinting process and how to apply these same ideas

and processes to your business.

A New Product Blueprinting process

can improve your probability for

new product success

The YMCA Playnasium

Page 5 Creating a new product: The Secret Recipe for Success

Is this you?

Business owners and senior managers come to me all the time with a

similar story.

Is this you? Do you make decisions based on your gut feel too often? Do

you have accurate information on what your customers want so that you

can make effective decisions based on facts instead of hunches?

You are not alone, just about everyone relies on their gut feel to some

degree. A lot of business owners feel that they are the only people with a

complete view of what their customers want, what they will pay for it and

what it will cost to develop and launch the new product.

“I don’t have the time to focus on making sure that my new products will be successful. I rely on

trusting my gut about what the new product should be, what features it should have and how

much it can be sold for in the marketplace. I have some close customers that I trust to give me

feedback on some of the product ideas. The rest of my team don’t have the knowledge or the

experience to make the call about what is going to work and so it always ends up my decision.

“I feel like I am usually right but there is a lot of risk in doing things this way. A lot of the time the

product ideas don’t get to market because the risk of investment is too great and I can’t take the

chance on whether I can get the returns I want. As a result, we tend to stick to minor product

innovations and updates to the products in the marketplace. We spend a lot of time looking at

what our competition is doing. It makes it really hard to grow the business because the

competition is always working on their products too.

“I wish my business would be able to make more money, that our products were market leaders

and that we could take them to markets all over the world.”

Page 6 Creating a new product: The Secret Recipe for Success

Using your sales team

Your sales team probably think that they know what your customers want,

and to an extent that is true. Your customers are likely to tell your sales

team about what they want all the time. Some successful companies are

organised well enough that they have a system that gathers this

information so that it can be reviewed on a regular basis to help guide the

strategy behind your product development objectives and this helps

increase the success of your product in your market.

We all know that customers love to have a whinge right? So, it is also true

that those same customers are telling your competition’s sales team

exactly the same thing, or even worse telling them about the things that are

more important because they like them better. How can you deal with that?

The downside on relying on customer feedback is that it doesn’t offer you

an advantage of differentiation over your competition. You are all likely to

have the same information about what your customer thinks is important.

You are also missing any insights of what these expressed needs mean in

terms of the level of performance required, how much more they would pay

for this problem to be solved and whether this really is the most important

opportunity for innovation in the market.

What you need to do

Use a proven structured process to really determine what your customers’

want, analyse and value the characteristics of the products they desire and

connect with their emotions to make your products great, successful and

very profitable.

There are four fundamental steps identifying your customers important

problems which need solving:

1. Market Research

2. Customer Research

3. Product Research

4. Product Architecture

Make your Toothpaste just right

Page 7 Creating a new product: The Secret Recipe for Success

Step 1 - Market Research

Customers come in all shapes and sizes across an infinite number of

demographics. Is it reasonable to think that the customers might have

equally diverse problems that are waiting to be solved? Of course it is.

For your business, it is critical to try and prioritise the groups of customers,

or in marketing speak, the market segments and their specific problems that

provide the greatest commercial value for your business. This is very

important because you don’t want to waste your money developing products

to solve problems in low value market segments.

In summary, when considering the market segment data, be as specific and

detailed as you can. We recommend that you start with the following

characteristics of the market segment for B2B products:

Size of revenue opportunity

Market segment growth rate

Market segment profitability

Unmet customer needs

Likely power of value proposition

Likelihood of technical solution

Current market presence

The segments that you decide to try and dominate are chosen based on

these characteristics.

The segments also need to align with the strategic goals of your business so

you should validate your thinking and decisions based on your:

Company Vision

Brand positioning

Comparative technical advantages

Core R&D strengths

These activities should happen hand in hand and the problems you identify

in the next step should influence the decision you make on which market

segments to dominate.

The No PressTM Device

Page 8 Creating a new product: The Secret Recipe for Success

Step 2 - Customer Research

Customer research is a really critical aspect to making sure you define the

requirements of your new product and it is the area that has the biggest

impact on your end results. If you are going to just focus on one area of the

four steps, this is the one to focus on.

Conducting customer research will usually highlight any concerns about the

consistency of the assumptions and decision made during market research.

The customer research step consists of two interviews that are undertaken

with a small subset of 6 to 10 important customers in the market segment

you have identified.

Val Morgan Outdoor Ultrascreen

What are your customer’s important

problems? Make sure you understand these

before you start designing your product

Page 9 Creating a new product: The Secret Recipe for Success

Discovery interviews

This first interview is focused on discovering problems.

Conduct a series of discovery interviews with 6 to 10 important targets /

clients in the market segment you have identified. Using a properly

structured interview process in a one-off interview arrangement, work with

the group to determine and tease out what their problems are with the

current products in the market segment.

From the interview results it is relatively straightforward to evaluate and

rank the 10 or so most important problems that this group of customers

face. You now have the most critical needs of this market segment from

just a small sample of interviews.

ARRB Walking Profiler G3

By focusing solely on identifying problems

and not solutions, you will gain the key

insights through a small market sample

Page 10 Creating a new product: The Secret Recipe for Success

Preference interviews

The second interview helps you determine the most important problems

under-served by existing solutions.

Focusing on the most important problems identified in the discovery

interviews, work with your 6 - 10 target customers / clients to rank or score

each of the needs in terms of their importance, and how well the need is

met in the current market.

Armed with the preference interviews results, a simple market satisfaction

gap analysis can isolate the handful of problems that are both important to

customers as well as badly served by the current market. These are the

items that you need to focus on solving to produce a product that will

outperform any other competitor.

The extreme opportunities are the

fundamental requirements that your new

product needs to address

Page 11 Creating a new product: The Secret Recipe for Success

Step 3 - Product Research

Conduct side-by-side testing of competitor products against the key

needs identified in the market satisfaction gap analysis.

During the preference interviews you also need to collect information

about how customers normally test the performance in these key

areas as well as an understanding of what levels of performance

they would value.

Competitor testing will form the baseline of the current market

performance. Use this baseline to set the performance targets for

your new product.

Step 4 - Product Architecture

Compile information from the previous steps and output a set of

product objectives which can be presented in a business case for

review and approval before moving into detailed development of the

product.

JIO Post Clip for Waratah

Page 12 Creating a new product: The Secret Recipe for Success

Why does this approach work?

There are good reasons why you should use this approach.

It is cost effective

This process is advantageous in that it can usually be achieved with

existing business resources and does not require costly market research

investment.

You can avoid ambiguity in the direction of the costly product development

programs. By defining the key requirements of a product at the beginning of

development it is easier to minimise feature and performance creep and

reduce the number of iterations in the design process.

It builds your relationships

This process builds and enhances your existing customer relationships by

helping produce a product that solves the customers most important and

most poorly served needs.

It focuses on solving real customers’ problems

The biggest advantage of this process is that it creates new product

opportunities away from the temptation of boardroom groupthink. The

process explores ideas away from marketing, sales or engineering

departments and allows you to gain a deep understanding of market needs.

Aviation Weather Data SODAR

Page 13 Creating a new product: The Secret Recipe for Success

About Mark Bayly

Mark Bayly is an awarded engineer with over 30 years’ experience in

products design and engineering in an ever widening range of markets for

business and consumer products.

For the past 23 years, Mark has run the family business previously known

as Bayly Design in Melbourne, Australia.

Mark’s experience provides him with the real insights earnt through

hundreds of design projects. After playing his part in the proliferation of

“idea” based design processes, Mark is committed to helping businesses to

make better use of the knowledge that exists in customer insights, and use

this knowledge to design successful products.

Contact Mark at m.bayly@bayly.com.au

About Bayly Group

Bayly Group was established in 1971 to provide Australian businesses with

the best industrial design consulting services available.

Bayly Group recommends that our B2B customers use a New Product

Blueprinting process at the beginning of projects to develop effective

product requirements based on real market needs. We have tools that

greatly simplify and streamline the process. We can assist in planning and

conducting interviews as well as presenting interview data to make

adoption as easy and as effective as possible.

Bayly Group is renowned for its product design and development services

and supports its customers at all stages of the product development

process.

Contact Bayly Group

9/84 Church Street, Richmond VIC 3121

Ph +61 3 9413 9000

info@bayly.com.au

www.bayly.com.au

Page 14 Creating a new product: The Secret Recipe for Success

Recommended reading

Christensen, CM, Hall, J, Dillon, K, Duncan, DS,

“Competing against luck, the story of innovation and customer choice”

Adams, D, “New Product Blueprinting, the handbook for B2B Organic Growth”

Ulwick, AW, “Jobs to be Done, Theory to Practice”

Ulwick, AW, “What customers want”