Lecture'2:'PHASE'ONE:'Opportunity'Identification'&'Selection:'
Strategic'Planning'for'New'Products'and'Services'
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MarketNDRIVEN!view:!Determine!the!needs!and!wants!of!target!markets!and!to!deliver!the!desires!
satisfaction!more!effectively!and!efficiently!than!competitors!(rooted!in!the!marketing!concept)!
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Intelligence!generation!(finding!information)!
Intelligence!dissemination!(sharing!information)!
OrganizationalXwide!response!(all!aim!to!satisfy!customer)!
!$But$this$can$lead$to$failing$to$see$emerging$markets/competitors/technologies$
MarketingNDRIVING!view:!influencing!the!structure!of!the!market!and/or!behaviour!of!its!players!in!
a!direction!that!enhances!the!competitive!position!of!the!business!
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Educating!customers!
Revolutionise!channel!structure!(ie.!remove!parts!of!distribution!channels!via!online)!
Surpass!customer!expectations!by!revolutionise!value!propositions!(ie.!bundles)!
Corporate!Framework!Guiding!the!NPD/NSD!Process!
1) Mission!Statement!
2) Competitive!posture!of!company:!Leader,!follower,!challenger!or!niche!
3) Product!platform!planning:!a!technology,!design!or!subsystem!that!can!be!shared!by!
product!families!–!common!area!of!design!(ie.!cars!from!single!product!platform!to!save!$$)!
# TRADENOFFS:!Balance!customer!&!manufacturer!needs!
# Need!for!cross!functional!communication!
# Different!company!practices!(ie.!luxury!vs!family!car!options)!
4) Brand!platform!planning:!launching!pad!for!scores!of!products!
5) Product!innovation!charter!(PIC):!Mission!&!platform!strategies!at!micro!level!–!A!document!
designed!by!senior!management!to!guide!SBU’s!on!innovation!role!!!“Mission!statement”!
!!Keeps!firms!within$their$abilities$and$provides$direction!to!pursue!(removes!scope$creep)!
i)
Background:!key!ideas!from!situational!analysis!
ii)
Focus:!Ensure!business,!technology!competencies!&!customers!match!innovation!
a. Technology!drivers:!the!firms!core!technology!focus!
b. Market!drivers:!consumer!groups!&!their!problems!
c. CoXcreation:!apply!to!other!products!&!work!with!other!company/consumers!
!!Info!via!formal!market!research,!lead!users!&!proper!R&D/marketing!dialogue!!
iii)
Goals/objective:!long!term!and!short!term!
iv)
Guidelines:!rules!by!upper!management!
PIC!Special!Guidelines!
$ Degree!of!Innovativeness:!FirstXtoXmarket,!adaptive!product!&!Imitation!
$ Timing:!First,!quick!second,!slow!&!late!
$ Miscellaneous:!Avoid!competition,!recognise!weaknesses,!patents!&!product!integrity!
Sources!of!Opportunity!Identification!
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6)
Scanning!the!environment:!customers!preference/demographic!changes!
UnderXutilization!of!resources!(inc.!product!capacity)!or!new!resources!!
Identify!new!uses!of!old!products!
Mandates!originating!external!to!the!firm!(new!regulatory!restrictions)!
Internal!mandates!(from!new!corporate!leadership!ie.!new!CEO)!
Front!line!employees!–!a!key!source!of!services!innovation!
Idea!Generation!
$ Internally$focused:!structure!processes!to!monitor!customers,!map!processes!for!service!
improvements!&!use!frontline!employee!feedback!
$ Externally$focused:!work!with!lead!users!(client!focused!learning)!&!!adopt!best!practice!
strategies!(benchmarking!by!looking!at!what!other!firms!are!doing)!
NPD!in!BOP!Markets!(Base!of!the!economic!pyramid)!
! !Marketing!to!the!poor:!small!margin!+!large!volume!=!profit!
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2)
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6)
Focus!on!price!performance!
Innovation!using!hybrid!solutions!(not!old!technology)!
New!products!easily!adaptable!across!large!BOP!markets!(ie.!countries)!
NonXconventional!multiXlevel!marketing!approaches!
Product!must!endure!hostile!environment!
Product!coXcreation!(with!users)!=!market!success!
INNOVATION!requires!MARKET!KNOWLEDGE!and!TECHNOLOGY!to!deliver!to!customer!needs!
Lecture'3:'PHASE'2:'Concept'Generation'
Creativity:!relating!to!or!involving!the!imagination!or!original!ideas,!especially!in!the!production!of!an!
artistic!work.!!!Current!schooling!can!stifle!creativity;!nature!has!to!be!conducive!of!creative!idea!
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2)
Thinking!productivity!(rethink!problem)!not!reproductively!(use!existing!way)!
- The!“Genius!Thinking!Strategy”!
" Many!ways!to!look!at!problem!
" Make!thought!visible!
" Make!novel!contributions!
" Force!relationships!(connections!between!things!other!do!not!see)!
" Think!in!opposites!
" Prepare!themselves!for!chance!
Role!of!training!(brain!storming,!more!focused)!
- Reality!Distortion!Field!(RDF):!Make!people!believe!impossible!is!possible!(SJ)!
- Encourage!Creativity!via:!
" Accommodative!(independence)!approach!
" Create!competitive!teams!
" Group!(creative!people!together)!&!swapping!of!positions!
" Grants!(available!money)!
" Nurturing!a!culture!of!creativity!(comfortable!with!failure)!–!3M!chairman!
" Investing!in!Idea!banks!(stored!past!ideas)!X!‘Episodic!learning’!&!‘unlearning’!
" Special!Rewards!
Removal!of!Road!Blocks!
- Ideas!are!fragile:!don’t!use!terms!such!as!“simply!wont!work”!
- Itemised!response:!positive!structured!response!to!new!ideas!
- Encouraging!conflict!via!‘Creative!Abrasion’!and!‘brashers’!
- Facilitating!cross!functional!creativity:!Difference!disciplines!
3)
Barriers!to!Firm!Creativity!
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Cross!functional!diversity:!can!lead!to!creative!stimulation!but!problem!solving!difficulties!
Allegiance!to!function!areas:!all!members!need!to!have!stake!in!success!to!put!in!effort!
Social!cohesion:!strong!team!ties!can!stifle!debate!and!innovation!
Role!of!top!management:!To!encourage!teams!to!be!adventurous!(want!radical!changes)!
Product'Conception'Creation!
A!verbal/prototype!statement!of!what!is!going!to!be!changed!&!how!the!customer!will!gain!or!lose!
! !RULE:!2/3!inputs!=!feasible!new!product!concept;!all!3!=!new!product!(value!creation)!
1. Form:!physical!thing!
2. Technology:!source!from!where!form!is!to!be!attained!
3. Benefit/Need:!to!customer!–!their!desire!
Innovation$can$start$at$any$of$the$3$points:$(model$highly$market$driven$–$must$see$need$for$product)$
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ii)
iii)
Customer!NEED!!!firm!develops!TECHNOLOGY!!!produces!FORM!(mXdriven)!
Firm!develops!TECHNOLOGY!!!find!match!in!NEED!!!produces!FORM!(mXdriven)!
Envisions!FORM!!!develops!TECHNOLOGY!for!form!!!find!customer!NEED!(mXdriving)!
A$product$concept$is$an$important$because$it$determines$whether$an$idea$is$worth$of$development$–$
it$gives$customers$enough$information$so$they$can$make$judgements$and$give$feedback$
Methods!for!generating!product!concepts!(should!be!an!ACTIVE!not!REACTIVE!process)!
i)
ii)
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Gathering!readyNmade!product!concepts!(form!tech/need)!
% SOURCES!of!readyXmade!concepts!
i. INSIDE:!employees!(R&D,!marketing,!tech,!manufacturing)!&!others!
ii. OUTSIDE:!End/lead!users,!resellers,!public,!consultants,!secondary!sources!
o End$Users:$Surveys,$observations,$tool$kits$$
o Lead$Users:$Crowdsourcing$(customer$ideas)$–$already$solving$issues$
a. Dell$–$improve$existing$products$via$10000$collected$ideas$
b. Apple$–$monitored$reviews/blogs$to$understand$needs$
% Open!Innovation:!Firm!searches!from!external!sources!for!research,!innovation,!
technologies!&!products!(increased!speed,!less!risk,!innovative!ideas)!
Tailored:!use!a!managed!process!run!by!NPD!team!(need!tech!form)!
Two!joint!Concept!testing!stages!(is!skipped!by!“accidental”!innovations):!
1. CONCEPT!TEST:!Market!research!on!what!people!think!of!the!concept!via!a!NPC!statement!
a. Prepare!Product!Concept!Format!(NPC!statement)!
i. Narrative!(factual/persuasive!statement),!Visual,!Prototype!or!VirtualX3D!
b. Clarify!Purpose!of!Concept!Test!
i. Communication!device,!eliminate!poor!concepts,!identify!strong!concepts,!
understand!consumer!reactions!to!concepts,!estimate!purchase!intentions!
and!sales,!potential!target!markets!&!help!develop!the!idea!
c. Decide!format!($),!Select!commercialization!&!Determine!price!($)!
i. Select!respondent!type!(s)!!!Potential!end!user,!stakeholders!&!lead!users!
d. Select!response!situation!
i. !Inhouse/outsourcing,!direct,!collection!(less!cost),!real!time!response!survey!
e. Define!the!interview!
i. Survey:!explore!respondent!current!practice!&!comments!on!new!concept!
ii. Sample!methods:!prob:!random/!nonXprob:!quota/convenient/judgement!
iii. Sample!size:!cost!v.!representativeness!(accuracy)!
iv. Administering!the!test:!inXperson,!telephone,!mail!(response!rate!&!quality)!
f. Conduct!trial!interviews!
i. Issues!with!‘TOP!BOX’!scores!(eg.!overall!strength)!–!blind!reliance;!doesn’t!
mean!they!will!buy!(instead!ask!direct!purchase!intention!Qs)!
g. Interview,!tabulate,!analyse!
i. Estimate!buying!intention!(top!2!response)!=!DEF!BUY!+!PROB!BUY!=!%!
2. FULL!SCREEN:!analyse!results!and!potentially!modify!concept!dependant!on!findings!
a. Should!technical!resources!be!devoted!to!the!project?!
i. Feasibility!–!can!we!do!it!(technical)!&!do!we!want!to!do!it?!(commercial)!
b. Managing!Project!
i. Rework!concept,!sort!&!rank!concepts!&!track!failed!concepts!
c. CrossNfunction!Communication!
i. Spot!potholes!of!product!development!where!more!people!will!be!needed!
& Small!firms/packaged!food/simple!variations!skip!full!screen!–!
technical!feasibility!&!ability!to!market!product!are!already!known!
The!Scoring!Model:!Scores!each!factor!(technical/commercial)!and!weights!their!importance!
$ Scorers:!Major!functions!(marketing/tech/op/finance),!managers!&!staff!specialists!
o Issues:!too!optimistic,!score!neutral,!moody,!inaccurate,!swayed!by!group,!erratic!
Alternative$Full$Screen$Methods$
1. Profile!Sheet:!graphically!arranges!scoring!on!different!factors!
2. Empirical!Model,!Expert!System’s!&!Analytic!Hierarchy!Process!
Limitations$of$Scoring$Methods$
$ Not!perfect:!reject!products!that!would!help!round!out!product!lines/!forestall!competitor!
entry!into!the!market!&!reject!too!many!(according!to!sales!market)!