new product development
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New Product Development. A variety of perspectives from which to analyse the development of new products. Some thing to consider…. Figure 9.6 Dropout rates for R&D projects - PowerPoint PPT PresentationTRANSCRIPT
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New Product Development
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A variety of perspectives from which to analyse the development of new products
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Some thing to consider…
Figure 9.6 Dropout rates for R&D projectsSource: Adapted from D.L. Babcock (1996) Managing Engineering Technology: An Introduction to Management for Engineers, 2nd edn, Prentice Hall, London.
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Stages in NPDIdea
generation
Idea screening
Concept development
and testing
MarketingStrategy
development
Business strategy
Productdevelopment
Test Marketing
Commercialization>
http://www.tutor2u.net/business/presentations/marketing/newproductdevelopment/default.html
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From R&D dept Production team Sales team Employees Customers Competition External sources Market research >
Don’t forget the social determinist and Individualist school of innovation!
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Creativity versus innovation Creativity is the generation
of new ideas. Innovation is the
implementation of creative ideas.
For Example: if a scientist has a number of ideas about how to build a household robot, she is creative.
If she applies those ideas to build a household robot, she is innovative.
http://www.businessinnovationinsider.com/images/2006/05/Creativity%20to%20innovation.jpg
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45% of lucrative business ideas — whether breakthrough products or services, new uses for old ones, or ways to cut costs— come from employees…PricewaterhouseCoopers
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Individual creativity versus organisational creativity
Individual creativity People can learn to be more creative by reading
books, participating in workshops, learning creative thinking techniques etc
Organisational creativity Making an organisation more creative and more
innovative is much more complex, requiring the establishment of a culture of innovation together with tools for creative collaboration;
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Creative collaborationa greater variety of people participating in the
idea generation process equals a higher level of creativity and innovation.
a greater variety of people participating in the idea generation process equals a higher level of creativity and innovation.
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variety of people with different backgrounds and areas of expertise required
at minimum, that teams are made up of people from different divisions within the company. At best, those people will also come from different locations or countries.
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Collaboration can happen in … Creative teams
Management placed for project or Self created by asking for assistance by friends (though usually from
same area of expertise) Brainstorming groups
When appropriate, business partners, customers and others from outside the
company should be brought in to participate. Networking
seek the assistance of a colleague for ideas, advice or help – across company
staff directories and discussion forum tools can help encourage people to network outside their departments and immediate contacts
Open collaboration through web based discussion forums a totally open environment to solve problems.
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2. Screening ideas Screen good ideas
and drop poor ones asap.
Checked for Technical feasibility Financial feasibility and
marketability Evaluate its demand,
marketability, and profit potential
Give ratings to ideas >
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Criteria for evaluating new products
Sufficient demand ? Profitable? Likely payback period? Fit firm’s image ? Lifecycle of the product ? State of market and
competitors ? Capability company to
successfully produce and market product ?
Ease of manufacture ?
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Remember I.Ansoff’s matrix
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Product vs market (extended Ansoff’s growth matrix)
Same product
Extended product range
Incremental change
Totally new product
Same market
Better market coverage
Related market
Totally new market
Product
Mar
ket
pen
etra
tio
n
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3. Concept development Detailed version of new
product (in documented user terms – a user requirements / functional list)
Turing ideas into tangible products – customers perceive as being valuable
Concept testing : with groups of consumers
Nokia has released images of Aeon, a concept phone that combines two touch-sensitive panels mounted on a fuel-cell power pack Devices like this are all part of Nokia's vision of 'wearable technology'. Users could wear the lightweight panels as a badge, or connected to a wrist-strap.
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4. Marketing strategy development
Initial marketing strategy based on product concept
Formal market research for product’s potential
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5.Business analysis
Review of sales, costs, profit projection
Estimate potential sales, income, breakeven point, profit and return on investment from new ideas
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6. Product development
R& D turns idea into product Develop product concept into physical
product, via prototypes or simulations Engineering and production issues
resolved via this process Consider materials, production processes,
quality and safety
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Design mix Formal design –
aesthetics Functional design –
performance, ,does it work is it reliable ?
Economy of manufacture – does design allow manufacture efficiently and cost that allows profit ?
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7. Test marketing
Pilot in small geographical area Field experiment in realistic setting Aims:
Forecast probable results of a national launch Test operational effectiveness of the
marketing plan Identify possible problems Assess customer reactions
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Problems with test marketing:
Test market may not be true indicator Environment may change from test to
national launch Competition may disrupt
By exceptional marketing activity Launching own product
Alerts competition to new product Simulated test marketing is getting more
sophisticated
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8.Commercialisation/ product launch Introducing new
product into the market Timing is critical for
success Heavy promotional
expenditure Choice of introductory
pricing Well targeted and
positioned
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We have already seen organisational creativity and collaboration in the form of :Creative teams Brainstorming groupsNetworkingOpen collaboration
These ideas can be extended to serve a NPD cycle …
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Models of NPD Departmental Activity stage (and
concurrent engineering)
Cross functional Decision stage
models Conversion process Responsive Models
Network models >
Idea generation
Idea screening
Concept development
and testing
MarketingStrategy
development
Business strategy
Productdevelopment
Test Marketing
Commercialization
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Departmental
Each department is responsible for certain tasks and once finished ‘passed over to next dept’ – over the wall’
Ad Each dept ‘knows what IT needs to do’
Disad Forward and backwards Lots of rework
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Departmental
R&D provides interesting ideas Engineering – develop prototypes Manufacturing – viable mass manufacturing Marketing – then plan and conduct the
launch
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Activity stage Similar to departmental Build around the activities Lots of feedback loops Simultaneous nature of activities (varying in
intensity)
Ad Groupings according to activity
Disad Even more passing and therefore, procrastination
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An activity-stage model
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Cross functional (TEAMS) Dedicated team representing people from a
variety of functions
Ad Full representation
Disad Organisation and project management disciplines need
to be well developed
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Decision stage models Set of decisions points or gateways must be
passed. Iterative and uses f/b loops
http://www.stage-gate.dk
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Conversion process Numerous inputs into a black box, converted into
a product output Input’s such as customer requirements,
technical ideas, manufacturing capabilities all provide a product output
Not disciplined , or measurable, or defined
Response model Behaviourist approach to decisions Organisational response to new proposals and
ideas
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9310.2006.00413.x for articles on innovation (journals)
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Network models – most recent thinking Accumulation of knowledge from
variety of sources eg marketing, manufacturing, R&D
And over the progression of project from initial idea to development PLUS
external linkages (additional information flow into organisation)
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A network model of NPD