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Chapter 1
Radical innovation  innovation that displaces or obsoletes(overbodig maken) current products and
/ or creates totally new products categories
40% off all new products launched fail
Global innovation culture  a firm is open to global markets, mindful of differences in customer
needs and preferences, and respectful of different national cultural and business environments
A cross-functional team  is a group of people with different functional expertise working toward a
common goal. (marketing, finance, engineering etc)
Heuristics  refers to experience-based techniques for problem solving, learning, and discovery
that gives a solution which is not guaranteed to be optimal.
Serendipitous  pleasant surprise, by accident
New product categories
1.
2.
3.
4.
5.
6.
New to the world product
new to the firm product
repositioning of the product
cost reduction
improvement of the product
addition to the product line
4%
15%
6%
20%
35%
20%
INVENTION VS. INNOVATION: THE DIFFERENCE
In its purest sense, “invention“ can be defined as the creation of a product or introduction of a
process for the first time. “Innovation,” on the other hand, occurs if someone improves on or makes
a significant contribution to an existing product, process or service.
Third-generation new products process
All three of the strategic elements for product development must be in place and each is coordinated
with and supports all the others.
1. New products process  procedure that takes the new product idea through concept
evaluation, product development, launch and post launch (manage down the amount of risk
and uncertainty as one passes from idea generation to launch)
2. production innovation charter  the strategy for new products
3. product portfolio
Fuzzy gate  an evaluation task that includes conditional go decisions (missing information so we go
on)
incremental new products  upgrade existing product
Production innovation strategy  provide direction for ongoing opportunity search
Strategy for the mix of projects in the funnel:
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Short-term versus long-term projects
High-risk versus low-risk projects
Market or technology familiarity
Ease of development
Geographical markets (north America, Europe, Asia)
Product platform planning
Platform  Product families that share similarities in design, development or production process

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Technological platforms (shared components)
Category platforms / families (shared design or technology)
Brand platforms / families (shared brand values)
The ‘Product innovation Charter’
Agreeing on focus, goals and guidelines:


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To chart the new product team’s direction
o what technologies?
o what markets?
To set the team’s goals and objectives
o why does it exist?
To tell the team how it will play the game
o what are the rules?
o what are the constraints?
o any other key information to consider?
A PIC is a written document, prepared by senior management to chart the company’s
new product strategy and to guide the product team. A comprehensive and detailed
PIC provides more direction and focus to the team and ultimately, better performance
of the company’s new products. 1- Background
The background of a PIC includes key points from a PEST analysis (Political,
Economic, Social, Technology) or situation analysis.
Questions addressed in this section of a PIC may include:


What is the business about?
Why has this strategy been developed?
2-
Focus
The focus of a PIC includes the company’s core competencies and how best to use
the company’s core competencies to derive value.
Questions addressed at this stage of a PIC may include:




What are your company’s core competencies?
What is your company’s competitive advantage and the value that your company can bring
to the target market?
What are your advantages in relation to your target market’s needs, wants, and consumption
trends?
What are your company’s marketing capabilities?
3- Goals and Objectives
The goals and objectives section describes the company’s short term and long term
objectives of the new product. The goals and objectives should be measurable.
4- Guidelines
The guidelines component of the PIC is essentially a road map written by the Product
Manager for the entire organization. It includes the time and entry to market, costs,
product quality and so forth.
Hollow gate: In the evaluation tasks that occur after every phase in the new product process, if a
new product team makes a full "Go" decision, but fails to commit any resources to the project,
First is functional representative on a team, sometimes full time, more often part time. An example is
a marketing researcher or a production planner. These people may be representatives on several
teams or just one. The second job is project manager or team leader. This role is
leader of a team of people representing the functions that will be required. The
third position is new products process manager, responsible for helping project
managers develop and use good new product processes.
Chapter 2
Phase 1 opportunity identification and selection
3 main streams of activity feed strategic planning for new products:
1. ongoing marketing planning
2. ongoing corporate planning
3. special opportunity analysis
The opportunities identified sort naturally into 4 categories:
• An underutilized resource. Example: A bottling operation, a strong franchise
with dealers, or that manufacturing process engineering department.
• A new resource. Example: DuPont’s discovery of Surlyn, a material with
hundreds of potential uses.
• An external mandate. Example: The market may be stagnant, the competition
may be threatening, or customer needs may be evolving. Challenges
like this will cause the fi rm to search for new opportunities, as did the Tasty
Baking Company in the case at the end of this chapter.
• An internal mandate. Example: Long-range planning often establishes a
fi ve-year-out dollar sales target, and new products people often must fi ll part
of the gap between current sales and that target. That assignment is called
the product innovation (and/or acquisition ) gap.
phase 2 concept generation
phase 3 concept/project evaluation (screening)
phase 4 development
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Marketing plan
resource preparation
production (product protocol = product description / definition)
comprehensive business analysis (go or no go)
phase 5 launch
1 – opportunity
2 – idea ---- stated
3 – tested ---- protocol
4 – prototype ---- pilot
5 – rest
APD = accelerated product development
New products consultant Robert Cooper identifies 5 sure methods to accelerating time to market
1.
2.
3.
4.
5.
clear product innovation charter
third generation new product process
portfolio management
a focus on quality at every phase
empowered cross-functional team
First to mindshare  domineer markt (apple / intel)
Service
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pure service
primarily service and partly good
partly service and primarily good

pure good
Incubation period is the time elapsed between exposure to a pathogenic organism,
a chemical or radiation, and when symptoms and signs are first apparent
Probe and learn  through interaction with customers, designers are inspired to probe, experiment
and improvise and as a result may come up with a new to the world product.
lickety-stick  the developing team develops prototypes from dozens of different new product ideas
and use the product customers like.
Firms using Quality Function Deployment
see this as the first list of customer needs. A more common
generic term is product description or product defi nition. In this book it will
be called product protocol. Protocol means agreement, and it is important that
there be agreement between the various groups before extensive technical work
gets under way. The protocol should, to the extent possible, be benefi ts the new
item is to yield, not the features the new item is to have.
Chapter 3
Product platform  Is defined as a set of systems and interfaces that form a common structure. It is
from this common structure that a family, or stream of products can be developed efficiently.
Brand platforms  A brand platform, or corporate image, is the set of associations that customers
make with your company. Some of these associations may be quite obvious and strong, like the
brand Volvo is associated with safety.
Brand equity  The value of an established brand
Category platform  product type / customer type
Social technologies identified 6 important and provocative modern trends:
1. Just-in-time life  people like making spur of the moment decisions based on real time
information
2. Sensing customers  people can sense their environment better now than ever before;
what might be too much information for some might be essential information for others
3. The transparent self  there is more information about customers available to product
managers now than ever before
4. In search of enoughness  consumers are increasingly adopting simpler life-styles marked
by fewer material possessions and increasing concern about quality of life
5. virtual made real  as more people become accustomed to virtual spaces, the boundary
between these and the real world will become increasingly blurred.
6. Co-creation  due to increase in e-commerce and online communities it is easier for
customers to communicate with each other, cooperate and share information.
Each of these trends suggest possible opportunities for new product development.
Product-market matrix
Diversification  Diversification can be expanding into a new segment of an industry that the
business is already in, or investing in a promising business outside of the scope of the existing
business.
Product innovation charter  all of these above inputs are potentially used in the development of a
company’s new product strategy
licensing and acquisition to acquire technologies or market strengths (star wars licenses for making
toys)
balanced = dual drive
This procedure of converting technical specifi cations to product features
and benefits, to market needs, has sometimes been called the T-P-M linkage.
objectives  short term
goals  long term
goals and objectives are of three types
1. Profit
2. Growth
3. Market Status
Degree of innovations:
Leveraged creativity  constitutes the most common first to market category (goede elementen
gebruiken van andere producten om nieuwe producten te ontwikkelen)
Application engineering  technology may not be changed at all but the use is totally new
Adaptive means  improving own or competitive product
imitation = emulation = check competitors
Product integrity  all aspects of the product are internally consistent
Product portfolio approach lijkt veel op BCG matrix maar geeft flexibiliteit in dimensies:

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Strategic goals  such as defending current base of products versus extending the base
Project types  such as fundamental research process improvements or maintenance
projects
Short term versus long term projects
High risk versus low risk projects
Market familiarity
Technology familiarity
Ease of development
Geographical markets
Chapter 4
The new product idea / concept
Obstacles to idea generation:
Group think: We think we are being creative, when in reality we are only coming up with ideas that
our group will fi nd acceptable. Remember that we are not trying to fi nd the “conventional wisdom,”
but truly original ideas.
Targeting error: We keep going back to the same simple demographic targets (for example, the
under-35 or under-50 markets. Great new product opportunities may be missed as a result.
Poor customer knowledge: Despite the money spent on market research by the top firms, the reality
is that little is understood about prospective customers. Lavish research spending doesn’t guarantee
that it was done well.
Complexity: Creative types within organizations, as well as senior management, often think that the
more complex the idea, the better it is (or the smarter and more promotable they seem). Complexity,
however, is a major barrier to new product adoption (see discussion in Chapter 8).
Lack of empathy: These same managers are also well-educated, high-income individuals
accustomed to an upscale lifestyle. They may simply not understand the “typical” customer they are
trying to sell to.
Too many cooks: A small new product team works fi ne, but large companies especially are prone to
internal competition for power and influence. This is not a healthy climate for a new product in the
earliest phases of development.
Itemized response  when an idea comes up listeners must first cite all its advantages
Barriers to firms creativity
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Cross-functional diversity  a diverse team means a wide variety of perspectives and more
creative simulations but also can lead to difficulties in problem solving and information
overload
allegiance to functional areas  the team members need to have a sense of belonging and
to feel they have a stake in the teams success. without this they will be loyal to their
functional area not to the team
social cohesion  if the interpersonal ties between team members are too strong candid
debate might be replaced by friendly agreement resulting in less innovative ideas
the role of top management  if senior management stresses continues improvement the
team might stick with familiar product development strategies and make only incremental
changes
Concept generation should be an active process and not a reactive process
Lead users  the lead user firms or individuals are at the front edge of the trend and have the best
understanding of the problems faced and expect to gain significantly from solution to those problems
Open innovation  the process a company employs to externally search for research innovation
new technologies and products
Creativity can be measured using the standard MBTI® (Myers-Briggs Type Indicator)
Creativity Index
Most people think reproductively—solve problems in ways that have worked
for us in the past. Creative geniuses think productively, rethinking how to visualize
the problem.
Some organizations use a technique called itemized response. All client trainees
must practice it personally. When an idea comes up, listeners must fi rst cite all
its advantages. Then they can address the negatives, but only in a positive mode.
To encourage creativity, some firms deliberately encourage conflict
by putting certain employees together on the same team—for example, a blue-sky
creative person and a practical type. This technique is sometimes called creative
abrasion . 18
Chapter 5
Problem based concept generation process
4 sources of stakeholders needs:
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1 - Search of internal records
o most common source of needs and problems comes from an organizations routine
contacts with customers and others in the marketplace
2 - direct input from technical and marketing
o understandings about end users and other stakeholders lies in the mind of marketing
and technical people. most of them have spent time with customers and end users
o the only real problem with using in-house people to report customer problems are :
suggestions is usually someone’s perception of what the customer problem is and
there is usually a solution given with each suggestion.
3 - (1/2) problem analysis
o much more than a simple compilation of user problems
o hard to find the real customer problem
3 - (2/2) Problem analysis procedure
o there are several variations in problem analysis. but 1 commonly used is Reverse
brainstorming
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step 1 : Determine the appropriate product or activity category for
exploration
step 2 : identify a group of heavy product users or activity participants within
the category
step 3 : gather from these heavy users or participants a set of problems
associated with the category
step 4 : sort and rank the problems according to their severity or importance
(bothersomeness index)
The fourth general source of stakeholder needs shown in Figure 5.1 — scenario
analysis —comes into play because the ideal problem for us to fi nd is one that
customers or end users don’t know they have at this time.
Methodologies to use when gathering a list of customer problems:
o
o
o
Experts  using them as surrogates for end users based on their experience in the
category under study
Published sources  papers / onderzoeken
Stakeholders contacts  VOC (voice of the customer)
 Interviewing
 questioning individuals about products use and problems
 phone,lab,on the street
 can be very informal and inexpensive
 Focus groups


 4-8 selected customers
 trained facilitator stimulates and guides informal discussions
 careful planning required
 mainly based on findings problems, no facts or conclusions
 easier to talk when they’re in a group, less reluctant than 1-on-1
Observations
 using products / conducting activities (in normal environment)
 can be expensive and time consuming
 used for realizing problems or unmet needs that customer did not
realize
Role Playing
 experiencing problems / needs
 can be expensive
 mainly tacit knowledge (onbewuste kennis)(kennis in hoofd en
moeilijk overdraagbaar)
An alternative way to generate concepts is based on product function analysis. A product can be
expressed in two words, a verb and an object (for example, toothpaste “cleans teeth”). Thinking of new
combinations of verbs and objects can suggest new product functions


“Homework tasks” (is dit er ook 1????)
 Keeping a diary or executing tasks about certain situations or topics
 careful preparation required
 time consuming
4 - scenario analysis
o used because the ideal problem for us to find is one that customers or end users
don’t know they have at this time – You want to solve future problems
o scenarios can take two forms
 extending the present to see what it looks like in the future
 leaping into the future to pick a period that is then described
 20 years (storyboard)
 potential customer problems or/and needs
 Leap studies can be static or dynamic . In dynamic leap studies, the
focus is on what changes must be made between now and then if the
leap scenario is to come about—the interim time period is the
meaningful focus. In static leaps, there is no concern about how we
get there.


Wild cards  high impact low probability
Scenario analysis lead to great learning and insight but are hard to do well,
several guidelines have been suggested for conducting a good analysis
 know the now (know current situation)
 keep it simple
 be careful with selecting group members
 do an 8-10 year projection
 periodically summarize progress
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combine the factors causing changes
check fit
plan to use it several times
reuse the group
Solving problems
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Group creativity
Brainstorming
Electronic brainstorming (kan niet bekritiseerd worden)
o simultaneous contribution
o no social loafing
o stimulating follow up discussions
o different locations
Online communities
But one commonly used procedure is reverse brainstorming. In this procedure, participants generate
a list of key problems with the product currently in use, then group and prioritize these such
that product development can focus on addressing the most important problems.
Complaints are common and often taken as requests for new products. But they are apt to be just the
result of omniscient proximity , meaning that users face a minor problem frequently, so it is
the first one mentioned.
We still try to avoid the bazooka effect (state an idea only to have someone shoot it down),
Chapter 6

Product attribute
o Features  what the product consist of
o functions  what the product does and how it works
o Benefits  how the product provides satisfaction to the user
Perceptual gap analysis: a gap analysis maps of the market and is used to determine how various
products are perceived by how they are positioned on the market map
Gap maps are made in three ways
1. Determinant gap map  managerial expertise and judgment is used to plot products on a
map
2. A manager uses customer attribute ratings to get data from users for a AttributeRatings
perceptual gap map
Data Cube:
Snake plot:
3. A manager uses overall similarities to get data from users for a OverallSimilarities
perceptual gap map
Lead users
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Customers associated with significant current trend (through their hobby or special interest)
Best understanding of the problems faced
Can gain from solutions to these problems
Idea generation process
Obstacles to idea generation
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
Group think  ideas that the group will find acceptable
Targeting error
Poor customer knowledge  research spending not enough
Complexity  the more complex the idea the better it is
Lack of empathy  High income managers do not understand the typical customer
Too many cooks  Internal competition for power and Influence
Stimulating individual creativity
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Training (creativity, market, technology, company strategy etc.)
Encourage multifunctional cooperation
challenging tasks (competitive teams)
freedom to follow intuition
be tolerant of mistakes and individuality
be supportive under stress
Chapter 7
Trade-off analysis (conjoin analysis)  analysis of the process by which customers compare and
evaluate brands on their attributes or features.
customer preferences = customer utilities
to do this, we use the rank orderings to estimate the utilities (sometimes called part-worths )
of each level of each attribute for each customer.
By using a fractional factorial design, we can still estimate the relative preferences of all
possible products using only a small subset of the cards
Adaptive conjoint analysis , developed by Sawtooth Software, shows only a few
attributes at a time to the respondent and adapts to the respondent as the conjoint
exercise goes on. In the adaptive technique, the respondent is first asked which
attributes are most important and which levels are most liked or disliked, then
pairs of options are shown to the respondent that focus only on the most important
attributes and levels that are most liked or disliked.
analysts had to restructure a traditional form of conjoint measurement called SIMALTO by
adding cost and savings to each of the attribute trade-off utilities. They then gave consumers
budgets
to spend on their choices, and thus captured a lot of variables in a willingness
to pay . They kept the power of the original set of trade-off attributes without having
to use the data-losing method of conjoint calculations.
Goldenberg and Mazursky present several “Creativity Templates” that can be used to manipulate the
existing knowledge base encoded in product attributes to discover innovative new products.
Procedure: Begin by identifying the determinate attributes, then manipulate these according to the four
creativity templates. The templates are:
1. Attribute Dependency Template: Find a functional dependency between two independent variable
attributes. The interaction may suggest a creative new product. Example: the color of the ink on a
coffee cup is dependent on the contents, and a warning message can be revealed if the beverage is
too hot.
2. Replacement Template: Remove one of the components of the product and replace it with one from
another environment. The function the removed component performed is done by another component.
Example: theantenna on a Walkman is replaced by the headphone cord.
3. Displacement Template: Remove an intrinsic component and its function, in such a way as to
functionally change the product. This may create a new product for a new market. For example:
removing fl oppy and CD drives on laptop PCs resulted in the ultra-thin PCs.
4. Component Control Template: Identify and create a new connection between a component internal
to the product and one that is external to the product. Examples: Toothpastes with added whiteners, or
suntan lotions with added skin moisturizers.
Improvements in virtual reality computer and video technology are providing
marketers with many exciting new ways to test concepts with customers. One
new measurement method, called information acceleration (IA) , has recently
been developed and was first applied by General Motors in testing new electric
car concepts. 14 The unique feature of IA is that respondents are brought into a
virtual buying environment that simulates the information typically available in a
realistic purchase situation.
MONANOVA  Monotone analysis of variance
A set of practical guidelines for the use of conjoint analysis would include the following:




One should be able to specify the product as a bundle of attributes (denk aan mok bij metha)
we need to know what the determinant attributes are before we do the conjoin analysis (gap
analyse)
respondents should be familiar enough with the product category and the attributes to be
able to provide meaningful data
the firm should be able to act on the results.
Information acceleration  measurement method  respondents are brought into a virtual buying
environment that simulates the information typically availably in a realistic purchase situation
Dimensional analysis  uses any and all features
Relationship analysis
1 - Two-dimensional matrix
2 - morphological matrix
5 dimensies (heating, etc) en daar onder weer 3 dimensies dus 15 totaal)