New Product Development From Mind to Market Product Development - - PowerPoint PPT Presentation

New Product Development

New Venture Entrepreneur Innovation

Raise Resources Deliver Value

Product Development Cost-Benefit Value Equation Opportunity Customer Need Mindset Networking Finance People Assets

From Mind to Market

Anticipate and satisfy needs

The Innovation Space

Desirable Feasible Salable

Successful Innovations

Design/Sociology/ Anthrapology Needs/wants Empathic design Applied ethnography Engineering/ope- rtions/quality Customer requirements Product specs QFD VOC Marketing/Economics/Psy- chology Product characteristics, attrubutes Conjoint analysis Perceptional mapping, prefrernce modelling

? ? ?

Breakthrough Innovations

 Pocket calculator  Automatic teller  Camcorder  CAT Scan  CAD/CAM

D? F? S?

New-Product Development Process

Idea Generation Idea Screening Concept Development & Testing Business Analysis Prototype Development Test Marketing Commercialization Drivers Ideas

Analytical Thinking

Creative Thinking Incubation Research

Five D’s

Exploratory Research/Secondary Resources Ethnography/Online Communities

Target Definition/Needs Assessment Design Specifications Ideation/Concept Development Concept Evaluation Features Trade-off Prototype Evaluation Positioning Launch

Combines Rearranges/Reverse s Enhances/Enlarges Adapts/Adopts Transforms/Modifies Eliminates Substitutes

New Value Proposi

• tion?

How the Entrepreneur C R E A T E S

Creativity

The Basic New Products Process

 Opportunity Identification and

Selection

 Concept Generation  Concept/Project Evaluation  Development

Technical tasks Marketing tasks

 Launch

Product Definition

 What will it do ?  Who will buy it ?  What will be its rough dimensions ?  What styling features will it have ?  What are the major competitors ?  What functional features should it have ?  What are the psychological descriptors or semantics of

the product ?

 What is its context ?

Successful Product/Service Ideas

 New product should have relative

advantage over the existing offering

 Be compatible with beliefs, attitudes

and changes in buyer behavior

 Be simple vis-à-vis functionality  Be easy to communicate (benefits of) to

potential users

 Convince buyer (satisfy a key need)

Need, Form and Technology in Action

The New Product Concept

Need Form Technology

Need- technology concepts

New Products

Form- technology concept Need-form concepts

Portable and Personal Music

Need/Technology/ Design Across and Within Generations

Five Critical NPD Success Factors

 #1: Differentiated product that delivers

unique benefits and superior value to the

customer

 #2: Strong market orientation

 market driven and customer focused new

product process

Uncover unmet needs and problems

 #3: Sharp and early product definition  #4: Market attractiveness as a key project

selection criterion

 #5: Speed is everything!

but not at the expense of quality of execution

Analysis of Need

 How is this need being satisfied ?  Is the present method inefficient ? Ineffective ?

What can be improved ?

 What is good about the present method of

satisfying the need ?

 Why will this new way be better and succeed ?  What is the relative cost of the present method

v/s the proposed method ?

 Is there an unmet need inherent in this

• pportunity ? What is it ?

Meeting Customer’s Needs

 Articulate

market

• pportunity

 Define

market segment

 Collect

customer needs

 Identify

lead users

 Identify

competitive products

 Plan for

product

• ptions

and extended product family

 Set target

sales price points

 Develop

marketing plan

Technology – Usability Continuum

Technology-Driven Products User-Driven Products

Super-Computer

Hard Disk Drive Computer workstation

Laptop Computer

Cellular Phone

Automobile

Camera

Wrist Watch Coffee Maker Coffee Vending

Value Benefits

 Quality  Style  Delivery  Service  Technology  Shopping ease  Personalization  Assurance  Place  Credit  Brand/

reputation

 Belonging  Altruism

What is the precise source of value to the: Purchaser?/User?/Producer?/Provider?

Technical Requirements

 What is the problem really about?  What implicit expectations and desires are

involved?

 Are the stated customer needs, functional

requirements and constraints truly appropriate?

 Scope and limitations for creative design  Characteristics / properties the product must /

must not have

 Technical and technological conflicts in the design

task

Crucial Technical Specifications

 Design: the functional design of the product and

attractiveness in appearance

 Durability: of the materials from which the

product is made

 Reliability: ensuring expected performance under

normal operating conditions

 Product safety: posing no potential dangers under

normal operating conditions

 Standardization: through elimination of

unnecessary variety among potentially interchangeable parts/objects

Some Product Development Tradeoffs

New Product Development Challenge

Superior Value Equation Use

• f

Resources

Requirements Specification

New Product Idea Opportunity Evaluation Secondary Information Primary Information Perceived Value Positioning Cost Evaluation Customers Value Marketing require- ments specification To Development

Factors for Market Failure of Technological Products

Pricing problems Distribution channel selection Poor communication of product benefits Poor selection of target market Unique attributes not seen Need for product is not seen Information about product is scarce, unclear or difficult No innovative advantage perceived Customer expectation not met

Customer Discovery, Validation and Design

• Identify a problem that potential customers

have

• This may lead to:
• a market niche not served,
• a potential improvement in an existing

product or

• an opportunity for a breakthrough product
• r process
• This “front end” of product development is

most impactful; unclear product definitions result in higher costs and higher rates of failure

• When you validate a customer, you

are conducting preliminary research to determine whether you have the right customer and solution

• Does the solution currently

exist?

• Is it a way to actually solve the

problem?

• Can you solution be produced,

protected?

• How much will it cost to

produce?

• How much time will it take to

bring to market?

• Early on, determine the potential for intellectual property protections, and plan to file for

patent protection at the best time

• Learn how your development process will be affected by laws or regulations
• You need preliminary drawings to estimate costs and manufacturing processes, and to apply

for a patent, if patentable

• From these drawings come the prototype or model

Overview of the Product Development Cycle

 The product development cycle consists of a series of tasks which

appear linear, but are not

• 1. Customer identification or discovery
• 2. Customer validation and design
• 3. Business creation
• Identify a problem that potential customers have
• This may lead to:
• a market niche not served,
• a potential improvement in an existing product or
• an opportunity for a breakthrough product or process
• This “front end” of product development is most impactful;

unclear product definitions result in higher costs and higher rates

• f failure

Product Development Milestones

 Eureka

Idea formation and evaluation stage

 Alpha

Concept testing stage

 Beta

Product use testing stage

 Gamma

Market testing stage

 Delta

Post-launch testing stage

New Product Failure

• The probability of success at

launch is 60%

• Figure shows the typical

percentage of new products that succeed, fail, or are killed during development

• Kill rate during development

is higher for best performing products, so failure rate is lowest

• Research reveals that the

principal reason for new product failure is lack of good market and industry analysis

New Product Failure

 Lack of resources for new product

development results in 5 problems:

• 1. Poor execution
• 2. Time-to-market increases
• 3. First-to-market opportunities are

missed

• 4. projects are made simpler so that more

can be done with less

• 5. Team morale declines

New Product Checklist

Go-To-Market

• The final phase is go-to-market or launch strategy
• Determine the means by which you will

commercialize your technology or product:

• License the technology to another company
• Develop it into applications
• Start a business to make and distribute the

product

• Sell the technology
• Joint venture with another firm

Exploring the Opportunity

 What is the opportunity?

Why? Who for?

 How does the opportunity create new value?

How is it different? What benefits will the

customers obtain which are not currently available?

 How does the opportunity score on the four

essential qualities?

Attractive; anchored in a product/service that

creates value; timely; and durable

 How to realize the opportunity?

Where? When? Scale?

Sample Feature-Benefits Table

Features Benefits

Product Development Framework

Product Designs, Prototype Developments and Testing Simplicity & Ease of Use Technology Quality Expandability Cost / Function Cost

Customer: Superior Value Equation Provider: Optimal Use of Resources

Ultimate Decider of Venture Success

The 10X Rule

C R E A T E S

Thank You