Chapter 20 : Introducing New Market Offerings.
1.Challenges in New-Product Development :
The company can develop new products in its own laboratories, or it can contract with independent researchers or new-product development firms to develop specific new products. We can identify six categories of new products. 1. New-to-the-world products
2. New product lines
3. Additions to existing product lines
4. improvements and revisions of existing products
6. Cost reductions
*Principles to guide New-product Development
1. Work with potential customers
2. Let employees choose projects
3. Give employees “dabble” time
4. Know when to let go.
Most established companies focus on Incremental innovation. Never companies create disruptive technologies that are cheaper and more likely to alter the competitive space. Established companies can be slow to react or invest in these disruptive technologies because they threaten their investment.
*Factors hinder new-product development:
• Shortage of important ideas in certain areas
• Fragmented markets
• Social and governmental constraints
• Cost of development constraints
• Cost of development
• Capital shortages
• Faster required development time
• Shorter product life cycles
Once a company has carefully segmented the market, chosen its target customers, identified their needs, and determined its market positioning, it is better able to develop new products. Many companies today use customer-driven engineering to design new products. Customer-driven engineering attaches high importance to incorporating customer preferences in the final design.
3:Organizing New-Product Development
A venture team is a cross-functional group charged with developing a specific product or business. These “entrepreneurs” are relieved of their duties and given a budget, garages, where entrepreneurial teams attempt to develop new products. Cross functional teams help to ensure that engineers are not just driven to create a “better mousetrap” when potential customers do not really need or want one. Some possible criteria for staffing cross-functional new-product venture teams include: • Desired team leadership style and level of expertise
• Team member skills and expertise
• Level of interest in the particular new-product concept
• Potential for personal reward
• Diversity of teams members
4.Managing the Development Process: IDEAS
The new-product development process starts with the search for ideas. New-product ideas can come from interacting with various groups and from using creativity-generating techniques. Interaction with Others
Ideas for new products can come from many sources, such as customers, scientists, competitors, employees, channel members, and top management. Many companies are not restricting their search for new products and services only to their formal research and development departments. To generate innovative ideas, companies need ‘out-of-the-box’ thinking, open forums, and a wider search.
Here the Sampling techniques for stimulating creativity in individuals and groups. • Attribute Listing: Attribute listing and modifying of an object, such as a screwdriver and replacing the wooden handle with plastic, providing torque power, adding different screw heads, and so on. • Forced relationship: Several ideas are considered and each one on relation to each other one. • Morphological analysis: It starts with a problem and then think of the dimensions. • Reverse assumption analysis: All the normal assumptions about equity are listed and then they are reversed. • New contexts: Take familiar processes, such as people-helping services, and put them into a new context. • Mind mapping: It starts with a thought and link another thought and think of next association and do this with all association and materialize a new idea.
A company should...
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