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Part Two

The New Products Process

By Hoang Duc BinhHoa Sen University

Adapted from McGraw Hill

The Basic New Product Process

Phase 1: Opportunity Identification/Selection

Phase 2: Concept Generation

Phase 3: Concept/Project Evaluation

Phase 4: Development

Phase 5: Launch

Figure 2.1

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The Evaluation Tasks in the New ProductsProcess

Figure 2.2

Opportunity Identification/Selection

Concept Generation

Concept/Project Evaluation

Development

Launch

Direction;Where should we look?

Initial Review:Is the idea worth screening?

Full Screen:Should we try to develop it?

Progress Reports:

Have we developed it?

Market Testing:Should we market it?

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Phase 1: Opportunity Identification/Selection

Active and passive generation of new productopportunities as spinouts of the ongoingbusiness operation. New product suggestions,changes in marketing plan, resource changes,and new needs/wants in the marketplace.Research, evaluate, validate, and rank them (asopportunities, not specific product concepts).Give major ones a preliminary strategicstatement to guide further work on it.

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Activities that Feed Strategic Planning forNew Products

Ongoing marketing planning (e.g., need tomeet new aggressive competitor)

Ongoing corporate planning (e.g., seniormanagement shifts technical resourcesfrom basic research to applied productdevelopment)

Special opportunity analysis (e.g., a firmhas been overlooking a skill inmanufacturing process engineering)

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Sources of Identified Opportunities

An underutilized resource (amanufacturing process, an operation, astrong franchise)

A new resource (discovery of a newmaterial with many potential uses)

An external mandate (stagnant marketcombined with competitive threat)

An internal mandate (new products usedto close long-term sales gap, seniormanagement desires) 2-6


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Phase 2: Concept Generation

Select a high potential/urgency opportunity, andbegin customer involvement. Collect availablenew product concepts that fit the opportunity andgenerate new ones as well.

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Phase 3: Concept/Project Evaluation

Evaluate new product concepts (as they begin tocome in) on technical, marketing, and financialcriteria. Rank them and select the best two orthree. Request project proposal authorizationwhen have product definition, team, budget,skeleton of development plan, and final PIC.

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Stages of Concept/Project Evaluation

Screening (pretechnical evaluation)

Concept testing

Full screen

Project evaluation (begin preparingproduct protocol)

The first stages of the new products process are sometimes

called thefuzzy front endbecause the product concept is

still fuzzy. By the end of the project, most of the fuzz shouldbe removed.

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Phase 4: Development (Technical Tasks)

Specify the full development process, and itsdeliverables. Undertake to designprototypes, test and validate prototypesagainst protocol, design and validateproduction process for the best prototype,slowly scale up production as necessaryfor product and market testing.

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Phase 4: Development (Marketing Tasks)

Prepare strategy, tactics, and launch detailsfor marketing plan, prepare proposedbusiness plan and get approval for it,stipulate product augmentation (service,packaging, branding, etc.) and prepare for it.

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Phase 5: Launch

Commercialize the plans and prototypes fromdevelopment phase, begin distribution and saleof the new product (maybe on a limited basis)and manage the launch program to achieve thegoals and objectives set in the PIC (as modifiedin the final business plan).

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The Life Cycle of a ConceptFigure 2.3

Corresponding New Products Process Phases:Opp. Identification Concept Generation Project Evaluation Development Launch

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Techniques for Attaining Speed in a New

Product Project

Accelerating Product Development throughManaging 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.

Figure 2.4

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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

Figure 2.4(contd.)

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Key Characteristics of Short-Cycle-Time Firms

Extensive user involvement early in thenew products process.

Cross-functional teams are dedicated tothe new product.

Suppliers are extensively involved.

The firms adopt effective designphilosophies and practices.

The most adept firms are effective atorganizational learning.

Figure 2.5

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What About New Services?

Successful new services tend to come fromfirms that use a systematic process much likethe new products process the tools all fit.

Iterations may be more frequent since they areless expensive.

Unique, superior service, providing value andbenefit as perceived by the customer, must bedelivered, to achieve success.

Speed to market with services is important,

especially in enhancing reputation, image, andcustomer loyalty.

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What About New-to-the-World Products?

The challenges are different, but the first phase remainsthe same: opportunity identification and development ofa strategic statement.

Clear connection required between the radical innovationand the firms strategic vision.

A firm may establish a transition management team tomove the R&D innovation project to business operatingstatus.

The new products process is more explanatory: need tobring in Voice of the Customer (VOC) early.

Lead users may be critical here (see Chapter 5discussion).

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The Probe-and-Learn Process for New-to-the-World Products

Focused (limited-performance) prototypes

Example: Iomega Zip Drive: over 50prototypes were built to test out ideas withcustomers.

Lickety-Stick iterative process: non-linear, more flexible process in whichdozens of prototypes may be tried

(lickety) before settling on one thatcustomers like (stick).

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