1. Ashesi University COURSE TITLE : NEW PRODUCT DEVELOPMENT SEMESTER : SECOND, 2015/16 MODULE 3 : Concept Development and Problem-Based Ideation Lecturer: Ebow Spio

2. Learning Objectives Appreciate and develop Innovation and Creativity Mindset Identify Sources of New Product Ideas Acquire skills to gather problems and identify consumer needs to focus on Identify and Practice Creative Techniques for Generating Ideas to Solve Consumer Problems Craft Concept Statements

3. The Phases of the New Products Process 2-3

4. Concept Generation Figure II.1

5. Barriers to Firm Creativity Cross-functional diversity: Diversity leads to more creative stimulation but also to problem solving difficulties. Allegiance to functional areas: Team members need to have a stake in the team ’ s success, or won ’ t be loyal to the team. Social cohesion: If interpersonal ties among team members are too strong, candid debate may not occur, resulting in less innovative ideas. Role of top management: Management should encourage the teams to be adventurous, otherwise only incremental changes will occur. 4-5

6. Obstacles to Idea Generation Group Think: Ideas that group find acceptable “conventional wisdom” rather truly original ideas Poor Customer Knowledge: Lack of consumer insight i.e. underlying motivation that drives consumer behaviour Complexity: Notion of the more complex the idea the better or smarter and more promotable they seem Targeting Error: Keeping going back to the same simple demographic targets Lack of Empathy: Well-educated, high income and upscale lifestyle of Managers makes it difficult to understand “typical’ customer they are trying to sell to 4-6

7. The Role of Management in Stimulating Creativity Recognize individuality Be tolerant of mistakes Be supportive under stress Special Rewards Techniques include: – Competitive teams/Creative Abrasion – Idea bank of unused ideas for possible reuse – Encourage interaction – even in how offices are laid out, creative abrasion 4-7

8. Required Inputs to the Creation Process Form (the physical thing created, or, for a service, the set of steps by which the service will be created) Technology (the source by which the form is to be attained) Benefit/Need (benefit to the customer for which the customer sees a need or desire) Technology permits us to develop a form that provides the benefit. 4-8

9. Some Patterns in Concept Generation Customer need  firm develops technology  produces form Firm develops technology  finds match to need in a customer segment  produces form Firm envisions form  develops technology to product form  tests with customer to see what benefits are delivered Note: the innovation process can start with any of the three inputs. 4-9

10. What is a Product Concept? A new product concept is a statement about the anticipated product features that will yield selected benefits relative to other products or problem solutions already available. A new product concept statement is claim of proposed satisfaction. 4-10

11. What is a Product Concept? A Product Concept statement describes the core purpose of a product or service, its uniqueness and its promise to fulfill unmet customer expectations. A concept statement provides a factual summary of the product's benefits and differentiates it from the competition.

12. What is a Product Concept? A product concept is a verbal or prototype statement of what is going to be changed and how the customer stands to gain or lose. Rule: You need at least two of the three inputs to have a feasible new product concept, and all three to have a new product. What are these inputs? 4-12

13. Why Do You Need a Product Concept and Not Just an Idea? Needed to judge whether it is worthy of development Potential customers do not have enough information to judge the worthiness of an idea: the product concept gives them the required information. 4-13

14. New Product Concepts and the New Product NeedForm Technology New Product “ C ” = Concepts C C C Figure 4.4 4-14

15. The Designer Decaf Example Benefit: “ Consumers want decaffeinated espresso that tastes identical to regular. ” Form: “ We should make a darker, thicker, Turkish- coffee-like espresso. ” Technology: “ There ’ s a new chemical extraction process that isolates and separates chemicals from foods; maybe we can use that for decaffeinating espresso coffee. ” Why would each of these taken individually not be a product concept? 4-15

16. Components of A Concept Paper Headline: The first part is a headline that grabs people's attention, the benefits and the reasons why consumers should believe in the product. Examples of good headlines include "fastest product in the market" and "best value in the market today." Main Benefits : Once people start paying attention, the concept statement should highlight the main benefits. For a computer system, it could be something like "superior performance and lower power consumption." For a new bicycle, it could be "hassle-free riding and exceptional durability to suit every budget." Reasons to Believe: The final part of the concept statement is an explanation of the reasons to believe in the product, such as its technical specifications or the quality of its ingredients. For a computer, it could be the processor speed, hard disk size and monitor specifications. For a bike, it could be information on the composite materials in the frame and its lightweight construction. Celebrity endorsements also could be part of a concept statement.

17. You care about the health and well being of your family, Therefore, you are always careful to procure food ingredients that are hygienically processed and handled. K maize flour and products are Wholesome and deliver a distinctive taste that the family loves. K maize flour and products are produced with superior Technology and under hygienic conditions that guarantee consistent high quality flour (clean and finer grains). Available in different pack sizes. Concept A

18. You aspire to show your love time and time again through good cooking for your family. K maize flour and products deliver that distinct great taste, texture and appetizing appeal to your dish that makes your family almost always say “Mummy you are special”. K maize flour and products are produced with superior Technology and under hygienic conditions that guarantee consistent high quality flour (clean and finer grains). Available in different pack sizes. Concept B

19. You desire to provide nourishing and tasty food for your family time and time again but you don’t always Have the time to process food ingredients by yourself. K maize flour and products deliver consistent and distinct taste that members of your family relish, Leaving you free to get on with other things. K maize flour and products are produced with superior Technology and under hygienic conditions that guarantee consistent high quality flour (clean and finer grains). Available in different pack sizes. Concept C

20. Narrative Here is a tasty, sparkling beverage that quenches thirst, refreshes, and makes the mouth tingle with a delightful flavor blend of orange, mint, and lime. It helps adults (and kids too) control weight by reducing the craving for sweets and between-meal snacks. And, best of all, it contains absolutely no calories. Comes in 12-ounce cans or bottles and costs 60 cents each. 1. How different, if at all, do you think this diet soft drink would be from other available products now on the market that might be compared with it? Very different ( ) ( ) ( ) ( ) Not at all different 2. Assuming you tried the product described above and liked it, about how often do you think you would buy it? More than once a week ( ) ( ) ( ) ( ) ( ) ( ) Would never buy it

21. Drawing/Diagram

22. Methods for Generating Product Concepts Two Broad Categories of Methods: Gathering Ready-Made Product Concepts Using a Managed Process Run by the New Products Team 4-22

23. Best Sources of Ready-Made New Product Concepts New Products Employees – Technical: R&D, engineering, design – Marketing and manufacturing End Users – Lead Users Resellers, Suppliers, Vendors Competitors The Invention Industry (investors, etc.) Idea exploration firms and consulting engineers Miscellaneous (continued) Figure 4.5 4-23

24. Best Sources of Ready-Made New Product Concepts (continued) Miscellaneous Categories – Consultants – Advertising agencies – Marketing research firms – Retired product specialists – Industrial designers – Other manufacturers – Universities – Research laboratories – Governments – Printed sources – International – Internet Figure 4.5 4-24

25. Lead Users An important source of new product ideas. Customers associated with a significant current trend. They have the best understanding of the problems faced, and can gain from solutions to these problems. In many cases, have already begun to solve their own problems, or can work with product developers to anticipate the next problem in the future. Leader users may be tinkerers 4-25

26. Toolkits for User Innovation A set of design tools that customers can use to customize a product best suited to them. Can incorporate CAD/CAM or rapid prototyping. Example: International Flavors and Fragrances: Internet-based toolkit that provides a database of flavor profiles and rules on how to combine them. Customer can specify flavor mixes that are immediately made into samples; customer can then make adjustments until the desired flavor is obtained. 4-26

27. Open Innovation The process by which a firm externally searches for ….........research, innovation, technologies, and products. Increases speed of research and innovation, cuts risks, and generates new innovative ideas. Viewed by some as the dominant innovation model of the 21 st century. Inputs can come from internal sources (marketing, strategic planning) and external ones (customers, market information, etc.). Sources such as inventors, startup companies, or university laboratories are actively sought out. 4-27

28. Open Innovation at Work: P&G P&G ’ s “ Connect and Develop ” program, designed to allow for internal intellectual property to be marketed outside, spun off, or licensed. Avoids the “ not invented here ” syndrome. To execute Connect and Develop, P&G assigned a team to find external partners, build brand equity, access new technologies, and create new product categories. Examples: – SunHealth Solutions (a P&G partner) developed the UV sensing technology used in Huggies swimpants with UV sensors, that help parents monitor their child ’ s exposure to UV radiation. – Mr. Clean scrubbing brush uses technology originally used as insulation in the auto industry. – Magic Eraser cleaning pad was sourced from a German chemicals company, and first noticed by P&G in use in Japan. 4-28

29. Finding and Solving Customers’ Problems 5-29

30. Problem Analysis: General Procedure 1. Determine product or activity category for study. 2. Identify heavy users. 3. Gather set of problems associated with product category. –Avoid “omniscient proximity” — rate importance of benefits and levels of satisfaction. 4. Sort and rank the problems according to severity or importance. 5-30

31. Problem Analysis Applied to the Cell Phone Keeping the unit clean. Breaks when I drop it. Battery doesn’t stay charged long enough. Finding it in dark. Battery dies in mid- conversation. Who “out there” hears me? Dropped calls. Looking up numbers. Voice fades in and out. Hard to hold. Health risks? Can’t cradle between ear and shoulder. Antenna breaks off. Flip cover breaks off. Disruptive instrument. Can’t see facial/body language. Rings too loud/too soft. Wrong numbers. Fear of what ringing might be for. 5-31

32. The Bothersomeness Technique of Scoring Problems 5-32

33. Problem Analysis: Sources and Methodologies Experts Published Sources Contacts with Your Business Customers or Consumers –Interviewing –Focus groups –Observation of product in use –Role playing 5-33

34. Example of Problem Analysis: Dyson’s Air Multiplier Fan Conventional fan problems: –Spinning blades chop airflow –Hard to clean –Blades can be dangerous to children –Fan tips over –Energy inefficient Air Multiplier: bladeless (uses technology adapted from hand dryers), and attractively designed. –Airstream is smooth and danger is eliminated –Low center of gravity eliminates tipping –Much more effective and efficient cooling –No blades to clean 5-34

35. Example of Problem Analysis: Dyson’s Air Multiplier Fan

37. Typical Questions for Problem Analysis Focus Groups What is the real problem here – what if the product category did not exist? What are current attitudes and behaviors of focus group members toward the product category? What product attributes and benefits do the focus group members want? What are their dissatisfactions, problems, and unfilled needs? What changes occurring in their lifestyles are relevant to the product category? 5-37

38. Observation and Role Playing in Problem Analysis Carmakers send their designers out to parking lots to watch people and how they interact with their cars (Ford called this “gorilla research”). Honda got insights as to how large the passenger compartments of their SUVs should be by observing U.S. families. Bausch and Lomb generated ideas on making contact lenses more comfortable by getting pairs of executives to act out skits in which they played the eyeball and the contact lens. 5-38

39. Problem Analysis in Action Toyota pickups were perceived as too small for North American tastes. Redesigned with a V8 engine and a much roomier passenger compartment. Domino’s Pizza, for years known for average quality but fast delivery, found that taste was frequently mentioned as a problem in focus groups. Intense product development led to a better pizza which is Domino’s new competitive position. 5-39

40. Solving the Problem Group Creativity Methods/Brainstorming Principles of Brainstorming: –Deferral of Judgment –Quantity Breeds Quality Rules for a Brainstorming Session: –No criticism allowed. –Freewheeling -- the wilder the better. –Nothing should slow the session down. –Combination and improvement of ideas. 5-40

41. Brainstorming Techniques Brainstorming circle Reverse brainstorming Tear-down Phillips 66 groups (buzz groups) Delphi method 5-41

42. Electronic Brainstorming Supported by GSS (group support systems) software. Overcomes many drawbacks of brainstorming (only one can talk at a time, fear of contributing, “social loafing”). Participants sit at networked terminals. Contributions are projected on screen, and also recorded (so no errors are made in transcription). Can be done over multiple sites via computer linkups or videoconferencing. Can handle larger size groups (into the hundreds). 5-42

43. Online Communities Any group that interacts using online social networking or a similar medium. –Open online communities (Facebook) –Lead user communities (http://www.tivocommunity.com)http://www.tivocommunity.com –Firm-organized communities (J&J’s http://www.babycenter.com) http://www.babycenter.com –Private online communities set up by service providers like MarketTools (under 500 members) –Proprietary online communities (thousands of members that statistically represent a target market) 5-43

44. Use of Online Communities Listen to the voice of the customer Monitor public communities and blogs to spot new trends and opportunities Establish rapport with customers and enable customer support Build emotional bonds with the customer 5-44

45. Online Community in Action: Del Monte Pet Food Division Working with MarketTools, analyzed data from millions of blogs, forums, and message boards, Identified biggest concerns of pet owners. Identified new customer segment (“Dogs Are People, Too”) Created invitation-only online community to encourage customer innovation (500 consumers) Community generated and refined ideas for new breakfast product. New product, Sausage Breakfast Bites, launched in half the normal time. 5-45

46. Drawbacks to Online Communities They are hard work Costly and time consuming (hire moderators and facilitators) Takes time for the community to mature Organizing the content so it is easy for the members to find Member privacy, confidentiality, content ownership, and other legal issues 5-46