Chapter 2
The New Products Process
The Basic New Product Process
The Evaluation Tasks in the New Products Process
Sources of Identified Opportunities
• An underutilized resource (a manufacturing process, an operation, a strong franchise)
• A new resource (discovery of a new material with many potential uses)
• An external mandate (stagnant market combined with competitive threat)
• An internal mandate (new products used to close long-term sales gap, senior
management desires)
Phase 2: Concept Generation
• Select a high potential/urgency opportunity, and begin customer involvement.
• Collect available new product concepts that fit the opportunity and generate new ones
as well.
Phase 3: Concept/Project Evaluation
• Evaluate new product concepts (as they begin to come in) on technical, marketing, and
financial criteria.
• Rank them and select the best two or three.
• Request project proposal authorization when have product definition, team, budget,
skeleton of development plan, and final PIC.
Stages of Concept/Project Evaluation
• Screening (pretechnical evaluation)
• Concept testing
• Full screen
• Project evaluation (begin preparing product protocol)
Note that the first stages of the new products process are sometimes called the fuzzy front end
because the product concept is still fuzzy. By the end of the project, most of the fuzz should be
removed.
Phase 4: Development (Technical Tasks)
• Specify the full development process, and its deliverables.
• Undertake to design prototypes, test and validate prototypes against protocol, design.
• Validate production process for the best prototype, slowly scale up production as
necessary for product and market testing.
• Prepare strategy, tactics, and launch details for marketing plan
• Prepare proposed business plan and get approval for it
• Stipulate product augmentation (service, packaging, branding, etc.) and prepare for it.
Phase 5: Launch
• Commercialize the plans and prototypes from development phase
• Begin distribution and sale of the new product (maybe on a limited basis)
• Manage the launch program to achieve the goals and objectives set in the PIC (as
modified in the final business plan).
The Life Cycle of a Concept
Techniques for Attaining Speed in a New Product Project
Accelerating Product Development through Managing the Organization
• Use projectization: project matrix and venture teams.
• Use small groups to thwart bureaucracy.
• Empower, motivate, and protect the team.
• Destroy turf and territory.
• Make sure supporting departments are ready.
• Clear the tracks in shared departments.
Techniques for Attaining Speed (continued)
Intensify Resource Commitments
• Integrate channel members and customers, use parallel or concurrent
engineering
Design for Speed
• Computer-aided design, rapid prototyping, design-aided manufacturing,
common components
Prepare for Rapid Manufacturing
• Simplified documentation and process planning, just-in-time delivery
(flexible manufacturing)
Prepare for Rapid Marketing
• Use rollouts, invest in immediate market awareness, facilitate trial
purchasing
Key Characteristics of Short-Cycle-Time Firms
• Extensive user involvement early in the new products process.
• Cross-functional teams are dedicated to the new product.
• Suppliers are extensively involved.
• The firms adopt effective design philosophies and practices.
• The most adept firms are effective at organizational learning.
What About New Services?
• Successful new services tend to come from firms that use a systematic
process much like the new products process – the tools all fit.
• Iterations may be more frequent since they are less expensive.
• Unique, superior service, providing value and benefit as perceived by the
customer, must be delivered, to achieve success.
• Speed to market with services is important, especially in enhancing
reputation, image, and customer loyalty.
What About New-to-the-World Products?
• The challenges are different, but the first phase remains the same:
opportunity identification and development of a strategic statement.
• Clear connection required between the radical innovation and the firm’s
strategic vision.
• A firm may establish a transition management team to move the R&D
innovation project to business operating status.
• The new products process is more explanatory: need to bring in Voice of
the Customer (VOC) early.
• Lead users may be critical here (see Chapter 5 discussion).
The Probe-and-Learn Process for New-to-the-World Products
• Focused (limited-performance) prototypes
– Example: Iomega Zip Drive: over 50 prototypes were built to test out
ideas with customers.
• “Lickety-Stick” iterative process: non-linear, more flexible process in which
dozens of prototypes may be tried (“lickety”) before settling on one that
customers like (“stick”).
Activity #2
1. Research on the products management practices
of a certain manufacturing firm. Discuss its stages
based on the new products management phases
described in this module.
2. Based on your research, recommend different
products in relation to each of the different
categories of new products discussed in the
previous module.
3. Describe the different sources of identified
opportunities that you can point out from your
research.
