JJ New Product Development at PCH

Publishers Clearing House PCH was founded in 1953 PCH’s name is synonymous with sweepstakes marketing In 1985 PCH started offering a wide range of merchandise to its customers In1999 pch.com was launched

Vision Be a pioneer in the direct mail industry Convert pch.com to the PCH of the 21 st century

What is a Stage-Gate Process ? A stage-gate process is a conceptual and operational road map for moving a new product project from idea to launch

Stage It is a process where action occurs The members of the project undertake keys task to gather information needed to advance the project to the next gate or decision point Each stage costs more than the preceding one

Gate Preceding each stage is a decision point or a gate which serves as a Go/Kill Gate also provides funnel where mediocre projects are culled out Gate deals with three quality issues Quality of execution Business Rationale Quality of action plan

Discovery Stage PCH has an ‘Idea Bank’, this bank is managed by the Product Development Group Ideas are gathered from various departments within the company - - Marketing, Creative, Marketing Operations etc….

Gate 1 – Idea Screen This is gate is also known as the gentle screen gate Is there a Market attractiveness for this new package ? Yes - - ‘GO’ ; No - - ‘Kill’ Can PCH develop this new product ? Do we have the resources ? Yes - - ‘GO’ ; No - - ‘Kill’ Any legal limitations to develop this new package ? No - - ‘Go’ ; Yes - - ‘Kill’

Stage 1 - Scoping A focus group is conducted Market research is also done What other companies are doing to attract new customers ? On what basis other companies are segmenting their customers also know what would prospective customers like to buy from PCH Do we have the market to develop this new package ? Do we have the resources available ? Typically days are spent on this stage

Gate 2 - Second Screen Gate 2 has to pass the ‘must meet’ and ‘should meet’ criteria Here the package is re-evaluated - - information from stage 1 is also discussed What was the reaction of the focus group ? If PCH received a positive reaction then – ‘Go’ if not – ‘Kill’ Financial calculation are also touched here Pay back period = 3 months ? 6 months ? If it is more than 6 months then – ‘Kill’ else ‘Go ’

Stage 2 – Detailed Investigation Here the customer needs are looked into Do they want music related products ? Jewelry product or magazines ? A target audience is also defined here A business case is developed What is the cost to manufacture ? Financial calculations are looked in detail Risk factors are also assessed during this process Any specific geographic area to be mailed Cross functional teams are involved - -Creative, Marketing, Marketing Operation and I.S.

Gate 3 - Decision to develop This is the final gate prior to the development of the project When should this package be mailed ? Do we meet our budget ? If yes - - ‘Go’, No – ‘Kill’ Do we have a timeframe for this project ? If yes - - ‘Go’, No - - ‘Kill’ Departments involved - - Purchasing, Marketing and Creative

Stage 3 - Development Package specifics are discussed here - - Color of package, size, numbers of inserts, type of paper to be used, types of products to be promoted in the package Volume to be mailed is decided during this stage, based on the volume purchasing orders for papers and other components for the package Departments involved - -Creative, Purchasing, Products and Promotions

Gate 4 - Decision to test Financial information is re-reviewed as there could be changes after the test package has been developed For example: A particular color may cost more/less than other color Are we still in plan with the budget ? Over budget ?

Stage 4 - Testing & Validation A ‘Final Team Review’ meeting is conducted where marketing, purchasing, legal sign off the project The departments involved go over the package one last time to ensure everything is according to plan - - proof read the copy, paper quality etc.….. Finalize to launch and operational plans

Gate 5 - Go to launch If the testing and validation is approved then go to launch else go back to Stage 4 and get ready for launch ASAP

Stage 5 - Launch Full production Deliver the package Track orders Fulfill orders Post launch review (how did the package versus projections) Learn from mistakes

Thank You ?s