1. New Product Development

2. A variety of perspectives from which to analyse the development of new products

3. Some thing to consider…
Figure 9.6 Dropout rates for R&D projects
Source: Adapted from D.L. Babcock (1996) Managing Engineering Technology: An Introduction to Management for Engineers, 2nd edn, Prentice Hall, London.

4. Commercialization>
Stages in NPD
Idea
generation
Commercialization>
Test
Marketing
Idea
screening
Product
development
Concept
development
and testing
Marketing
Strategy
development
Business
strategy

5. _________________________
From
R&D dept
Production team
Sales team
Employees
Customers
Competition
External sources
Market research >
Don’t forget the social determinist and
Individualist school of innovation!

6. Creativity versus innovation
Creativity is the generation of new ideas.
Innovation is the implementation of creative ideas.
For Example: if a scientist has a number of ideas about how to build a household robot, she is creative.
If she applies those ideas to build a household robot, she is innovative.

7. 45% of lucrative business ideas — whether breakthrough products or services, new uses for old ones, or ways to cut costs— come from employees…PricewaterhouseCoopers

8. Individual creativity versus organisational creativity
People can learn to be more creative by reading books, participating in workshops, learning creative thinking techniques etc
Organisational creativity
Making an organisation more creative and more innovative is much more complex, requiring the establishment of a culture of innovation together with tools for creative collaboration;

9. Creative collaboration
a greater variety of people participating in the idea generation process equals a higher level of creativity and innovation.

10. variety of people with different backgrounds and areas of expertise required
at minimum, that teams are made up of people from different divisions within the company. At best, those people will also come from different locations or countries.

11. Collaboration can happen in …
Creative teams
Management placed for project or
Self created by asking for assistance by friends (though usually from same area of expertise)
Brainstorming groups
When appropriate, business partners, customers and others from outside the
company should be brought in to participate.
Networking
seek the assistance of a colleague for ideas, advice or help – across company
staff directories and discussion forum tools can help encourage
people to network outside their departments and immediate contacts
Open collaboration
through web based discussion forums
a totally open environment to solve problems.

12. 2. Screening ideas Screen good ideas and drop poor ones asap.
Checked for
Technical feasibility
Financial feasibility and marketability
Evaluate its demand, marketability, and profit potential
Give ratings to ideas >

13. Criteria for evaluating new products
Sufficient demand ?
Profitable?
Likely payback period?
Fit firm’s image ?
Lifecycle of the product ?
State of market and competitors ?
Capability company to successfully produce and market product ?
Ease of manufacture ?

14. Remember I.Ansoff’s matrix

15. Product vs market (extended Ansoff’s growth matrix)
Same product
Extended product range
Incremental change
Totally new product
Same market
Better market coverage
Related market
Totally new market
Market penetration

16. 3. Concept development
Detailed version of new product (in documented user terms – a user requirements / functional list)
Turing ideas into tangible products – customers perceive as being valuable
Concept testing : with groups of consumers
Nokia has released images of Aeon, a concept phone that combines two touch-sensitive panels mounted on a fuel-cell power pack
Devices like this are all part of Nokia's vision of 'wearable technology'. Users could wear the lightweight panels as a badge, or connected to a wrist-strap.

17. 4. Marketing strategy development
Initial marketing strategy based on product concept
Formal market research for product’s potential

18. 5.Business analysis Review of sales, costs, profit projection
Estimate potential sales, income, breakeven point, profit and return on investment from new ideas

19. 6. Product development R& D turns idea into product
Develop product concept into physical product, via prototypes or simulations
Engineering and production issues resolved via this process
Consider materials, production processes, quality and safety

20. Design mix Formal design – aesthetics
Functional design – performance, ,does it work is it reliable ?
Economy of manufacture – does design allow manufacture efficiently and cost that allows profit ?

21. 7. Test marketing Pilot in small geographical area
Field experiment in realistic setting
Aims:
Forecast probable results of a national launch
Test operational effectiveness of the marketing plan
Identify possible problems
Assess customer reactions

22. Problems with test marketing:
Test market may not be true indicator
Environment may change from test to national launch
Competition may disrupt
By exceptional marketing activity
Launching own product
Alerts competition to new product
Simulated test marketing is getting more sophisticated

23. 8.Commercialisation/ product launch
Introducing new product into the market
Timing is critical for success
Heavy promotional expenditure
Choice of introductory pricing
Well targeted and positioned

24. These ideas can be extended to serve a NPD cycle …
We have already seen organisational creativity and collaboration in the form of :
Creative teams
Brainstorming groups
Networking
Open collaboration
These ideas can be extended to serve a NPD cycle …

25. Models of NPD Departmental Activity stage (and concurrent engineering)
Cross functional
Decision stage models
Conversion process
Responsive Models Network models >
Idea
generation
screening
Concept
development
and testing
Marketing
Strategy
Business
strategy
Product
Test
Commercialization

26. Departmental
Each department is responsible for certain tasks and once finished ‘passed over to next dept’ – over the wall’ Ad
Each dept ‘knows what IT needs to do’
Disad
Forward and backwards
Lots of rework

27. Departmental R&D provides interesting ideas
Engineering – develop prototypes
Manufacturing – viable mass manufacturing
Marketing – then plan and conduct the launch

28. Activity stage Similar to departmental Build around the activities
Lots of feedback loops
Simultaneous nature of activities (varying in intensity) Ad
Groupings according to activity
Disad
Even more passing and therefore, procrastination

29. An activity-stage model

30. Cross functional (TEAMS)
Dedicated team representing people from a variety of functions Ad
Full representation
Disad
Organisation and project management disciplines need to be well developed

31. Decision stage models
Set of decisions points or gateways must be passed.
Iterative and uses f/b loops

32. Numerous inputs into a black box, converted into a product output
Conversion process
Numerous inputs into a black box, converted into a product output
Input’s such as customer requirements, technical ideas, manufacturing capabilities all provide a product output
Not disciplined , or measurable, or defined
Response model
Behaviourist approach to decisions
Organisational response to new proposals and ideas
for articles on innovation (journals)

33. Network models – most recent thinking
Accumulation of knowledge from
variety of sources eg marketing, manufacturing, R&D
And over the progression of project from initial idea to development PLUS
external linkages (additional information flow into organisation)

34. A network model of NPD