1. NEW PRODUCTS MANAGEMENT Merle Crawford Anthony Di Benedetto 10 th Edition McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Chapter 12 Product Protocol 12-2

3. A Marketing-R&D Conversation MKTG: We’re going to be needing a solar-powered version of our standard garage door opener, soon. R&D: How reliable should it be? Should it be controllable from inside the house? Should we use new electronics technology? Should it be separate from the collector system already installed? MKTG: Well, you’re the technical people, make some recommendations. R&D: In other words, you don’t know what you want. MKTG: Cripes, do we have to tell you everything? What do you do for a living? How should we know where the collectors should be located? R&D: If we go electronic, you’ll say it’s too expensive. If we go electric, you’ll say we’re living in the 1930s. Wherever we put the collectors you will say we are wrong. If we guess, you second-guess. MKTG: OK. Put the collectors on the garage roof. R&D: That probably can’t be done. 12-3

4. Why Have A Protocol? Also known as product requirements, product definition, deliverables, etc. Doesn’t it seem obvious and simple? Actually is one of the top success factors distinguishing winning from losing projects. Maybe because it involves more than technical aspects. 12-4

5. Purposes of Protocol To determine what marketing and R&D groups need to do their work. –Think concept life cycle: this is more than a simple concept statement, yet less than we will have when the first prototype is available. –Try to identify the key deliverables at this point. To communicate essential to all players and integrate their actions, directing outcomes consistent with the full screen and financials. To set boundaries on development process or cycle time. To permit the development process to be managed (i.e., what needs to be done, when, why, how, by whom, whether). 12-5

6. Contents of a Product Protocol Target market Product positioning Product attributes (benefits) Competitive comparison Augmentation dimensions Timing Marketing requirements Financial requirements Production requirements Regulatory requirements Corporate strategy requirements Potholes 12-6

7. Narrow Version of Protocol: End- User “I Want” List This is the “I Want” list for a new lawn leaf blower/vacuum. These are benefits — how they are achieved is determined during development. Manufacturer stands behind product — two year full warranty. Electrically and mechanically safe. Good value and lasts a long time — top quality component parts, state-of-the-art manufacturing. Makes yard clean-up easier — most powerful blower you can buy. Converts from blower to vacuum without tools. Electrical cord does not come loose. Can be used with existing extension cord. Easy to maneuver. Clog-free vacuuming. Tubes go together and stay together. 12-7

8. Protocol Stated as Benefits: BuiltNY Product concept: carrier for two wine bottles. Customer benefits: –Protective, insulating, ergonomic, lightweight, reusable, inexpensive, flexible (easy to fold) Result: neoprene wine bottle carriers (inexpensive, easy to cut and dye into designer colors). Spinoffs included beer carriers and baby- bottle carriers. 12-8

9. A Sample Protocol: Trash Disposal System Must automate trash disposal at factory cost not to exceed $800. Clean, ventilated, odor-free, no chance of combustion. Must be safe enough to be operated by children; outside storage safeguards against children and animals. Size must be small enough to work as kitchen appliance, to provide easy access and eliminate need for double handling of trash. Simple installation Decor adaptable to different user tastes. If design requires opening of exterior walls, structural integrity and insulation against elements must be maintained. User-friendly, automatic operation, easy to maintain by technical servicepeople. 12-9

10. Example of Difficulty of Translating Idea Into Product: Morton Hot Salt The Voice of the Customer (VOC) might suggest this is a great idea. But how to translate it into a product? How spicy? How different from regular chili powder? Flavored more like cayenne or chipotle? Without specific, precise information, food engineers are left just to guess. 12-10

11. Protocol Within the New Products Process End User  Market Contact  New Product Group  R&D Contact  Engineers Unmet Needs Inventory of Statement of Needs to Benefits to How to Deliver the And Problems Needs Be Fulfilled by Product Deliver Requested Benefits Benefit to Feature Conversion (Specs) Finished Prototype Evaluate Prototype; R&D Delivers Features Delivered; Product Confirmed Further Development Prototype Lab Assesses Performance PROTOCOL End User  Market Contact  New Product Group  R&D Contact  Engineers 12-11

12. Quality Function Deployment (QFD) A technique designed to insure that customer needs are focused on throughout the new product project. First step is the House of Quality (HOQ): gathers desired attributes from customers and translates them to engineering characteristics. Requires inputs from marketing and technical personnel; encourages communication and cooperation across the functional areas. 12-12

13. QFD and Its House of Quality 12-13

14. Benefits in QFD Example Compatibility Print quality Ease of use Productivity 12-14

15. Technologies in QFD Example Postscript compatible Resolution Edge sharpness Duplex printing Hours training required Speed (text) Speed (graphics) 12-15

16. Tradeoffs in QFD Example Improving resolution slows down text printing and really slows down graphics printing. Increasing edge sharpness slows down both text and graphics printing. Duplex printing speeds up text and graphics printing. Postscript compatibility improves resolution and edge sharpness. 12-16

17. House of Quality : Source: Adapted from John R. Hauser and Don Clausing, “The House of Quality,” Harvard Business Review, May-June, 1988. Customer Attributes Engineering Characteristics Parts Characteristics Process Operations Production Requirements Parts Deployment : Process Planning: Production Planning: Converted to: Moving to Later Stages of QFD 12-17

18. QFD Realities Substantial cost and time commitment. Only mixed results in some applications. Requires top management support and commitment. Must be viewed internally as an investment. Requires good functional integration. May work better if the team members have a successful track record of working together before. 12-18

19. Improving QFD Efficiency Concentrate on only some of the Engineering Characteristics: the most critical, or the ones where improvements are easy to accomplish. Organize the Engineering Characteristics into groups, and designate responsibility to functional areas. Do cost-benefit analysis on each Engineering Characteristic to determine which provide the greatest benefit relative to cost of improvement. 12-19