New Product Development: Strategy, Tactics and Process

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New Product Development
Strategy, Tactics & Process

Anand Subramaniam

“Knowledge speaks, but wisdom listens."
- Jimi Hendrix

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Highlights
NPD - Strategy NPD - Design NPD - Types NPD – Process NPD - Levers

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Reason for New Product Failures
Overestimating market size Poor marketing research Design problems Excessive development costs Incorrectly positioned, priced, or advertised Competitive reaction

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New Product Development Strategy

New Product Development Strategy
Original products Acquisition Product improvements Product modifications New brands through the firm’s own R&D efforts.

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NPD - Value Add
NEW PRODUCT DEVELOPMENT

GROWTH

PRODUCTIVITY

QUALTITY IMPROVEMENT

BRAND MAINTENANCE

• Line Extensions • New Products • New Packages

• Reduce Cost • Formulas • Packages • Manufacturing

• Quality of Design

• • • • •

Conformance Special Situations Regulatory Environmental Specifications 7

NPD Strategy - Planning Levels
Identity Company Strategy
Mission Objectives

Mission Objectives

Business Units

Business Strategy

PRODUCT STRATEGY
•Technical Competencies •Strategic Principles •Organisation •Alliances Categories

Portfolio Strategy

•Project Mix •Milestones

PRODUCT PORTFOLIO STRATEGY
•Resource Levels

Brands

Project Strategy

•Resource Allocations

PRODUCT DEVELOPMENT STRATEGY
•Timing •Deliverables

Projects

•Technical Approaches

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Cross Functional Team

Technology & Quality
Packaging Engineering/Process Engineering Quality & Safety Research & Development Industrial Engineer Mechanical Engineer

Marketing
Marketing Research
Sales

Manufacturing
Operations Logistics Procurement Supply Chain Quality Control

Finance & Admin

Legal Affairs

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New Product Development Design

Product Design Specification
Environment Testing Safety Legal Quantity Materials Ergonomics Aesthetics Installation Service life Standards Performance Quality assurance Customer Timescale Storage Processes Patents Shelf life Packing Competition Weight Maintenance Politics Plant

DESIGN CORE
Size

Disposal Shipping

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New Product Development Types

Product Development Types
Generic (Market Pull) Description The firm begins with a market opportunity, then finds an appropriate technology to meet customer needs. Technology Push The firm begins with a new technology, then finds an appropriate market. Platform Products The firm assumes that the new product will be built around the same technological subsystem as an existing product. Concept development assumes a technology platform. Process Intensive Characteristics of the product are constrained by the production process. Customisation New products are slight variations of existing configurations.

Distinctions with respect to the generic process

Additional initial activity of matching technology and market. Concept development assumes a given technology.

Both process and product must be developed together from the very beginning, or an existing production process must be specified from the beginning. Snack foods, cereal, chemicals, semiconductors.

Similarity of projects allows for a highly structured development process. Development is almost like a production process. Switches, motors, batteries, containers.

Examples

Sporting goods, furniture, tools.

Synthetic Fabrics

Consumer electronics, computers, printers.

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New Product Development Process

New Product Development Process
“The Fuzzy Front End”
Opportunity Identification Idea Generation Concept Development Concept Screening*

Product Development

Marketing Plan Development

Test Marketing*

Commercialisation

Positioning Development

*”Stage Gates”

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Opportunity Identification
Internal sources
Company employees at all levels

External sources
Customers Competitors Distributors Suppliers Outsourcing
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Idea Generation (Ideation)
Cross...
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