Five Phases of the Basic New Products Process

Topics: Marketing, Marketing research, Marketing plan Pages: 9 (2406 words) Published: April 12, 2011
What has happened up to this point, and what is going to happen from now on.

The NPD Process is that combination of steps/activities/decisions/goals, etc., that, if performed well, will churn out the new products the organization needs. “It Doesn’t Work That Way”
“It Doesn’t Work That Way in our firm.” A very common comment. You don’t have to follow the procedure described in this book in totality – follow the steps you need to follow; tailor it to your needs.

The following story introduces the NP Process.

Betty Wall has been covering a sales territory in omni Manufacturing Company’s college market for three years, selling, among other office supplies, a line of highlighting products. They were the usual collection of colors, widths, sizes, and shapes. This was an important market for Betty's firm, and Omni shared the lead with Trion, Inc. But Betty knew the market was mature, the life cycle far past the dynamic growth stage with no real excitement for several years. Moreover, she had heard from the purchasing agent at Kinsville College that Trion was developing a new concept in highlighters. Apparently, it involved a clear liquid that reacted with ink to give each letter a broader, deeper, and shinier appearance. Trion was having trouble with the concept, but Betty was worried about her commissions from the Omni line.

So, she called David Raymond, the newly appointed product manager for office supplies, and told him her story and her fears. David asked the market research department to make a quick scan of the highlighter situation-sales, shares, profits, rumors of innovation, and so on. Sure enough, the market was very mature, competitors and customers were complacent. Market research also uncovered the Trion test product, which sounded impressive.

David then discussed the situation with the vice president of marketing, who agreed there was a significant threat to the cash flow from office supplies. When Omni's president confirmed that highlighters were important to the firm's future, David was asked to come up with a solution to the combined problem of maturity and competitive innovation.

Fortunately, some brainstorming within the product management group, combined with astute thinking on the part of two technical people, led to the concept of a solid highlighter. No one was sure it would work (pulling liquid from the air); but, the basic idea seemed sound, several focus group sessions with office workers and students were positive, technical people reaffirmed it should be feasible, a scan of its fit with the rest of the firm (safety, production facilities, and so on) scored highly, and preliminary financial analysis gave it an OK.

So, David, as product manager, was given leadership on the project. He decided to put together a team of four people to run the operation, ordered more market research, wrote out what the work to date indicated should be the benefits of the new item to the consumer, and laid out a time schedule that would get this new product to the market before Trion got there with theirs. Technical people went to work on the solid material concept, and David began thinking about the best marketing strategy for the product. On one of his visits across to the lab, Phyllis Chatterjee, the technical member of the team, showed him the first prototype, finished just the evening before. David arranged to show it to some potential customers. They liked the idea very much. So, Phyllis continued her work, final specifications were written, some semifinished product was produced for David to place in offices and dorms to see if it worked in practice, and manufacturing went on to plan the facilities change and a new process.

With this information, David was able to make a financial analysis, with preliminary product cost estimates and a marketing budget. Management approved, and the product was headed for market. Further product field testing was undertaken to get...
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