NEW PRODUCT

DEVELOPMENT-MAP
30-09-13
IMPORTANT
MAPPING IS A MEDIUM AND ALSO A
MESSAGE: GET TOGETHER ON NEW
PRODUCTS SOONER OR SMARTER WITH
NEW PRODUCT DEVELOPMENT MAP
HIGH FAILURE RATE
NEW PRODUCTS
LIFE-BLOOD OF ORGANIZATIONS
DEVELOPMENT PROCESS RISKY
FAILURE RATES HIGH
IMPORTANT TO UNDERSTAND PROCESS OF NPD
APPLE 2 DECADES AGO , KNOWN AS EARLY PRODUCT
INNOVATOR ,
GOT OFF TO FAST , IMPRESSIVE START;DECADE LATER
FOUND ON BRINK OF EXTINCTION- REASON-CREATIVE
FIRES COOLED
STEVE JOBS USED LOT OF INNOVATION AND
REMADE COMPANY 20 YEARS LATER
MOTTO OF APPLE- THINK DIFFERENT
TWO OPTIONS TO A COMPANY
THRU ACQUISITION-BUYING A WHOLE
COMPANY ,PATENT ,LICENSE TO PRODUCE
SOMEONE ELSES PRODUCT
SECOND OPTION- OWN NEW PRODUCT
DEVELOPMENT EFFORTS
NEW( MEANING)-ORIGINAL,PRODUCT
IMPROVEMENT/MODIFICATIONS,NEW BRANDS
OF FIRM DEVELOPED THRU OWN R & D
REASONS FOR FAILURES
OVERESTIMATION OF MARKET SIZE
POOR DESIGN
WRONG POSITIONING
LAUNCH AT WRONG TIME
TOO HIGH PRICE
POOR ADVERTISEMENT
POOR DESIGN

POOR ADVERTISEMENT

POOR DESIGN

WRONG POSITION
WRONG TIMING

NEW PRODUCT DEVELOPMENT
PROCESS
IDEA GENERATION
IDEA SCREENING
CONCEPT DEVELOPMENT & TESTING
MARKETING STRATEGY DEVELOPMENT
BUSINESS ANALYSIS
PRODUCT DEVELOPMENT
TEST MARKETING
COMMERCIALIZATION
GREAT IDEA

IDEA GENERATION-SYSTEMATIC
SEARCH
IBM- INNOVATION JAM ON LINE SUGGESTION
BOX
3 DAYS , 160 COUNTRIES ,1,50,000 PEOPLE
AND 46,000 IDEAS
SOURCES- INTERNAL AND EXTERNAL
INTERNAL- FORMAL R & D , EMPLOYEES
FROM EXECUTIVES TO SCIENTISTS
,ENGINEERS AND MANUFACTURING STAFF TO
SALES PEOPLE AND TOP MANAGEMENT ALSO
SALESMAN
TOP MANAGEMENT
DESIGNERS-R & D

EXTERNAL SOURCES
DISTRIBUTORS
SUPPLIERS
COMPETITORS
CONSULTANCY AND DESIGN FIRMS
ON-LINE COLLABORATIVE
COMMUNITIES-InnoCentive in USA
CUSTOMERS
CUSTOMERS AS SOURCE OF AN
IDEA

COMPETITORS

FOLLOW COMPETITION

EXTERNAL SOURCES
DISTRIBUTORS-CLOSE TO MARKET ; CAN PASS
ON INFORMATION ABOUT CUSTOMER
PROBLEMS AND NEW PRODUCT POSSIBILITIES
SUPPLIERS- CAN TELL ABOUT NEW CONCEPTS
,TECHNIQUES, MATERIALS WHICH CAN BE
USED IN NEW PRODUCT DEVELOPMENT
COMPETITORS-UNDERSTAND HOW THEIR
PRODUCTS WORK;ANALYIZE THEIR SALES ,

EXTERNAL SOURCES
TRADE MAGAZINES, SHOWS
SEMINARS,GOVERNMENT
AGENCIES,ADVERTISING
AGENCIES,MARKETING RESEARCH FIRMS
,UNIVERSITIES,COMMERCIAL
LABORATORIES,INVENTORS
NEW PRODUCT CONSULTANCY AND DESIGN
FIRMS
ON-LINE COLLABORATIVE COMMUNITIES
ON-LINE COLLABORATIVE
COMMUNITIES
INNOCENTIVE USA
CORPORATE CLIENTS( SEEKERS) IN
TOUCH WITH > 1,00,000 SCIENTIESTS (
SOLVERS)
SEEKERS POSE CHALLENGES
SOLVERS CAN GET UPTO $ 1,00,000 FOR
PROVIDING SOLUTIONS
CUSTOMERS AS SOLUTION
PROVIDERS
ANALYSIS OF CUSTOMER
COMPLAINTS/QUESTIONS
INDICA FROM TATA- CUSTOMER NEED
FOR A FUEL-EFFICIENT,SPACIOUS ,
AFFORDABLE CAR
1,15,000 BOOKINGS IN ONE WEEK AFTER
LAUNCH IN 1999
CUSTOMERS AS CO-CREATORS
CUSTOMERS AS CO-CREATORS

PROBLEM SOLUTION

MINIATURIZATION

TWO-IN-ONE

DESIGN IMPROVEMENT

NEW USES OF OLD PRODUCTS
IDEA SCREENING
PURPOSE OF IDEA GENERATION- CREATION OF
LARGE NUMBER OF IDEAS
PURPOSE OF SCREENING- REDUCE THAT
NUMBER
STOP GOOD IDEAS; DROP POOR IDEAS
REVIEW BY NEW PRODUCT COMMITTEE OF
IDEAS WRITTEN IN A STANDARD FORMAT
DROP POOR IDEAS-HANGING KASAB

STOP GOOD IDEAS FOR FURTHER
PROCESSING

PROCESSING OF NEW IDEAS
R-W-W (REAL,WIN,.WORTH IT)
FIRST QUESTION- IS IT REAL( REAL NEED
AND DESIRE FOR PRODUCT AND WILL
CUSTOMER BUY?)
SECOND- CAN WE WIN? PRODUCT WITH
SUSTAINABLE COMPETITIVE ADVANTAGE /
COMPANY EQUIPPED WITH RESOURCES TO
ENSURE SUCCESS
THIRD-IS IT WORTH DOING?-PRODUCT IN
SYNC WITH COMPANY STRATEGY?-PROFIT
POTENTIAL
IS IT REAL-WIN-WORTH?
CONCEPT DEVELOPMENT & TESTING
IDEA WHICH CAN BE EXPANDED INTO
SEVRAL PRODUCT CONCEPTS
EACH TO BE TESTED WITH TARGET
CUSTOMERS
CONCEPT- PARTICULAR COMBINATION
OF FEATURES, BENEFITS,PRICE
EVALUATION BY CUSTOMERS
IDEA EXPANSION INTO SEVEAL
CONCEPTS
CONCEPT- TESTING
CONCEPT TESTING PROCESS
DESCRIPTION OF CONCEPT EITHER
PICTORIALLY/VERBALLY
PERCEPTION OF CUSTOMERS OF BENEFITS
FROM FEATURES
USE OF QUESTIONNAIRE TO ASCERTAIN
LIKING/DISLIKING , KIND OF
PERSON/ORGANIZATION LIKELY TO BUY THE
PRODUCT
HOW IT SHALL BE USED;LIKELIHOOD OF
USING PRODUCT
LIKELIHOOD OF USAGE OF THE
PRODUCT

MARKETING STRATEGY
DEVELOPMENT
3 PARTS
DESCRIPTION OF TARGET MARKET
PLANNED VALUE PROPOSITION
SALES,MARKET SHARE AND PROFIT
GOALS FOR FIRST FEW YEARS







BUSINESS ANALYSIS
BUSINESS ATTRACTIVENESS OF THE
PROPOSAL
REVIEW OF SALES,COSTS,PROFIT
PROJECTIONS TO FIND OUT WHETHER THEY
MEET COMPANYS OBJECTIVES
HOW?- SALES HISTORY OF SIMILAR PRODUCTS
;MARKET SURVEYS.
USE OF SALES AND COSTS FIGURES TO
ANALYZE PRODUCTS FINANCIAL
ATTRACTIVENESS
PRODUCT DEVELOPMENT
DEVELOPMENT OF CONCEPT INTO A
PHYSICAL PRODUCT
DEVELOPMENT OF COMPONENTS TO THE
SPECIFICATIONS
MULTI-DISCIPLINARY TEAMS TO BRING
PRODUCT TO THE MARKETPLACE
INTEGRATION OF SKILLS OF DIFF
DEPARTMENTS
PRODUCT DEVELOPMENT-TESTING
FOCUS ON FUNCTIONAL ASPECT OF
PRODUCT + CONSUMER ACCEPTANCE
PAIRED COMPARISON TEST
BENCHMARKING AGAINST WHICH TO
JUDGE NEW OFFERING
MONADIC PLACEMENT TEST-NEW
PRODUCT TO USERS FOR TRIAL
PRECAUTION AT DEVELOPMENT
STAGE
ISOLATION ATTITUDE OF
DEVELOPERS/SCIENTISTS
ATTITUDE OF DEVELOPERS NOT TO SHOW
INCOMPLETE DESIGN/PRODUCT
CONFLICT-DESIGN VERSUS MANUFACTURING
COST- DESIGN RELAYED BACK TO DEVELOPERS
POSSIBILITY OF LOOSING SIGHT OF
CUSTOMER NEEDS
PRECAUTION AT DEVELOPMENT
STAGE
DANGER OF CUSTOMER NEEDS/TECHNOLOGIES
LIKELY TO CHANGE IN LONG DEVELOPMENT
PROCESS
EXAMPLE OF FORD EDSEL
ANTICIPATION OF THESE CHANGES AND
INCLUSION IN DESIGN
AT ONE POINT OF TIME NEGLECT CHANGING
NEEDS TO ENSURE TO AVOID DELAY IN
PROJECT
PRECAUTION AT DEVELOPMENT
STAGE
MISMATCH BETWEEN PHYSICAL PRODUCT AND
DESCRIPTION OF SAME IN CONCEPT TESTING
WITH CUSTOMER STAGE
APPROVAL OF DESIGN FROM CUSTOMER
BEFORE FREEZING
TESTING OF PTRODUCT ACTUAL USE AND
NOT IN IDEAL CONDITIONS
WILLING TO DO ANYTHING TO ENSURE NEW
PRODUCT SUCCESS
GIVE MORE TIME/MONEY TO ENSURE CHANCES
OF SUCCESS
MARKET TESTING
INTRODUCTION OF PRODUCT/MARKETING
PROGRAM INTO REALISTIC MARKETING
SETTINGS
EXPERIENCE OF MARKETING A PRODUCT
BEFORE GOING TO GREAT EXPENSE OF FULL
INTRODUCTION
TESTING OF ENTIRE PROGRAM-
STP,ADVERTISING,DISTRIBUTION,PRICING,BRA
NDING,PACKAGING,BUDGET LEVELS
TEST MKTG- IMPORTANT
AMOUNT OF TEST VARIES WITH EACH NEW
PRODUCT
HIGH COSTS , ALLOWING COMPETITORS GAIN
ADVANTAGE
LITTLE/NO TEST MARKETING OF
DEVELOPMENT COSTS ARE LOW,COMPANY
CONFIDENT OF SUCCESS
NO TEST MARKETING IN CASE OF LINE-
EXTENSIONS/COPY OF SUCCESSFUL
COMPETITORS PRODUCTS
WHEN/WHY TEST MARKET?
INTRODUCTION OF PRODUCT NEEDS HUGE
INVESTMENT
HIGH RISK
MANAGEMENT NOT SURE OF MARKETING
PROGRAM
COST-BENEFIT COST HIGH BUT BENEFIT OF
AVOIDING COSTLY MISTAKES IMPORTANT
CAUTION- IT DOES NOT GUARANTEE SUCCESS-
TATA INDICA CERTAIN ERRORS IN
MANUFACTURING
STANDARD TEST MARKETS
CHANDIGARH
PUNE
BENGULURU
COUPLED WITH STORE
AUDITS,CONSUMER/DISTRIBUTOR
SURVEYS
RESULTS USED TO FORECAST NATIONAL
POTENTIAL
DRAWBACKS OF TEST MARKETS
CAN BE COSTLY ;MAY TAKE LONG TIME
MONITORING OF RESULTS BY COMPETITORS
ALSO
PRICE CUTTING DURING TESTS,INCREASE IN
PROMOTION,EVEN BUYING UP OF TEST
MARKETED PRODUCTS
OPPORTUNITY TO COMPETITORS TO LOOK AT
PRODUCT BEFORE NATIONAL INTRODUCTION
TIME TO DEVELOP DEFENSIVE STRATEGIES
SIMULATED TEST MARKETS
SHOWING OF ADS AND PROMOTIONS FOR
PRODUCTS INCLUDING NEW PRODUCTS TO BE
TESTED
INVITE CUSTOMERS TO A REAL/LABORATORY
STORE
HOW CUSTOMERS BUY NEW/COMPETING
BRANDS
COSTS LESS ,CAN RUN FOR LONG PERIODS
;IMPORTANT- KEEP PRODUCT OUT OF
COMPETITORS VIEW
COMMERCIALIZATION
INPUTS FROM TEST MARKETING
WHETHER TO GO AHEAD WITH
CCOMMERCIALIZATION
INVESTMENT IN FACILITY SUCH AS
PRODUCTION, PACKAGING , ALSO ON
ADVERTISING , SALES PROMOTION AND
OTHER MARKETING EFFORTS
ISSUES IN COMMERCIALIZATION
TIMING-ISSUE OF SELF- CANNIBALIZATION
WHERE ?-SINGLE
LOCATION/REGION/NATIONAL OR
INTERNATIONAL MARKET
FEW COMPANIES GO FOR
NATIONAL/INTERNATIONAL LAUNCH
OTHERS- MARKET ROLLOUT OVER PERIOD OF
TIME
SWIFT GLOBAL ROLLOUT- WINDOWS VISTA
O/S

NEW PRODUCT DEVELOPMENT
CUSTOMER CENTERED
TEAM BASED NEW PRODUCT
DEVELOPMENT
SYSTEMATIC NEW PRODUCT
DEVELOPMENT
CUSTOMER
THOROUGH UNDERSTANDING OF WHAT
CUSTOMER NEEDS AND VALUES
FOCUS ON FINDING NEW WAYS OF
SOLVING CUSTOMER PROBLEMS AND
CREATION OF MORE CUSTOMER
SATISFYING EXPERIENCES
SINK USING WASTE WATER FOR
PLANT GROWTH

TEAM BASED NEW PRODUCT
DEVELOPMENT
SEQUENTIAL PRODUCT DEVELOPMENT
APPROACH
ONE DEPARTMENT COMPLETES WORK
ASSIGNED TO IT TO BE PASSED ON TO NEXT
BRING CONTROL TO COMPLEX/RISKY
PROJECTS
CAN BE DANGEROUSLY SLOW
SLOW-BUT SURE DEVELOPMENT CAUSE FOR
FAIALURES,LOST SALES/PROFITS AND
DWILDLING MARKET POSITIONS
TEAM BASED..
CLOSE WORKING IN CROSS-FUNCTIONAL
TEAMS
TEAM OF PEOPLE ( VARIOUS DEPARTMENTS)
STAY TOGETHER WITH NEW PRODUCT FROM
START TO FINISH
LIMITATIONS-CONFUSION AND
ORGANIZATIONAL TENSION
IMPORTANT TO COMBINE CUSTOMER
CENTERED APPROACH WITH TEAM BASED
AAPPROACH
SYSTEMATIC NEW PRODUCT
DEVELOPMENT
PROCESS TO BE HOLISTIC AND SYSTEMATIC
INSTALLATION OF INNOVATION MANAGEMENT
SYSTEM- COLLECT, REVIEW ,EVALUATE,
MANAGE NEW PRODUCT IDEAS
APPOINTMENT OF INNOVATION MANAGER
ENCOURAGEMENT TO ALL STAKEHOLDERS
HELPS IN CREATION OF INNOVATION
ORIENTED COMPANY CULTURE
YIELD LARGE NUMBER OF NEW PRODUCT
IDEAS ( FEW VERY GOOD ONES ALSO)
COMPANIES KNWON
GOOGLE
APPLE
MARUTI
TATA
3M CORPORATION
P& G
GE
LAUNCH OF NOKIA SMARTPHONE
N8

N8
MANY FIRSTS
12 MEGAPIXEL CAMERA PHONE
ONE YEAR AFTER ITS RIVALS- FEATURE
FIRST TO HAVE NEW SYMBIAN 3 OPERATING
SYSTEM-EMBRACING ON LINE SOCIAL
NETWORK FACEBOOK AND TWITTER UPDATES
ON HOMESCREEN ITSELF
FREE NAVIGATION SOFTWARE FOR TURN-BY-
TURN NAVIGATION GUIDANCE
N8- OTHER DETAILS
NOKIAS FIRST PHONE WITH NON-
REMOVABLE BATTERY
PRICE RS. 26,295
DIMENSIONS- 113.5X59.1X12.9MM
3.5 INCH CAPACITIVE DISPLAY AS BIG
AS I-PHONE
135GMS WEIGHT
CAN SHOOT HD VIDEOS

FLOP SIDE
DOES NOT MEET BENCHMARK SET BY
APPLE AND GOOGLE
WEAK LINK- BROWSER- CAN NOT OPEN
MULTIPLE WINDOWS
MAY NOT ATTRACT CURRENT I PHONE /
ANDROID USER
CONDITIONS FOR NEW PRODUCT
SUCCESS
IS THERE A NET BENEFIT TO THE USER?
ARE YOU PREPARED FOR RETALIATION
BY COMPETITORS?
WHO IS THE PRODUCT CHAMPION?-
MENTOR
NEW PRODUCT PIONEER NEED NOT
NECESSARILY BE THE MARKET LEADER
INNOVATORS
CONSUMPTION PIONEERS
CHALLENGE IS TO LOCATE AND TARGET
SMALL IN VOLUME
FOR ANY PRODUCT ,THERE WILL BE
SOME PIONEERS
IDEA INNOVATOR
EARLY ADOPTERS
OPINION LEADERS IN THEIR RESPECTIVE
COMMUNITY
SIZEABLE SEGMENT
MARKETERS NEED TO PENETRATE THIS
EEGMENT TO ENSURE SUCCESS OF PROGRAM
TWO CHARACTERISTICS OF THE GROUP-
VENTURESOME NATURE AND SIZE OF THE
GROUP
CHALLENGE- LOCATE,IDENTIFY AND REACH
THRU MARKETING PROGRAM
EARLY MAJORITY
NOT VENTURESOME LIKE INNOVATORS
NOR FAST ADOPTION AS EARLY
ADOPTERS
+VE IN APPROACH TO NEW THINGS
GIVE A TRY TO NEW THINGS EARLIER
THAN AVERAGE PERSON OF THEIR
COMMUNITY
LATE MAJORITY
BY AND LARGE SKEPTICAL IN THEIR
APPROACH
GENERALLY TRY THEM ONLY AFTER LOT
OF PEOPLE AROUND THEM HAVE
ALREADY ADOPTED IT
LAGGARDS
TRADITION BOUND
WILL BUY/USE PRODUCT ONLY AFTER IT
BECOMES A KNOWN AND ACCEPTED PRODUCT
THROUGHOUT THE MARKET

INNOVATOR FOR ONE PRODUCT MAY NOT BE
SAME FOR ANOTHER
JOB OF MARKETER- FIND OUT INNOVATORS
FOR PARTICULAR PRODUCT EACH TIME.