Managing the new product development process

1. Managing the new product development process

2. 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

4. 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

5. 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

6. Matrix organisation structure Full time Part-time Senior management Sales Production Finance Marketing Research andtechnology Business Team 1 Business Team 2 Business Team 3

7. 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

9. 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

10. 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

11. 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

12. Evaluation criteria

13. Evaluation criteria (Continued)

14. 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 the difficulty e.g. • RCA identified TV but not VCR. • Kodak and IBM failed to see the potential in photocopying butXerox did

15. The famous Apple Mac, launched 1984 The Xerox PC with GUI, 1983

16. The key screening stages • Initial screen, entry screen or preliminary screen • Customer screen, concept testing • Technical screen, technical testing • Final screen • Business analysis

17. 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.

18. 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.

19. 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

21. 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).

22. 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.

23. 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