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A variety of perspectives from which to analyse the development of new products
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Figure 9.6 Dropout rates for R&D projects
Source : Adapted from D.L. Babcock (1996) Managing Engineering Technology: An Introduction to Management for
Engineers , 2nd edn, Prentice Hall, London.
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Idea generation
Idea screening
Commercialization>
Test
Marketing
Concept development and testing
Product development
Marketing
Strategy development
Business strategy http://www.tutor2u.net/business/presentations/marketing/newproductdevelopment/default.html
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From
 R&D dept
 Production team
 Sales team
 Employees
 Customers
 Competition
 External sources
 Market research >
Don’t forget the social determinist and
Individualist school of innovation!
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Creativity is the generation of new ideas.
Innovation is the implementation of creative ideas.
For Example: if a scientist has a number of ideas about how to build a household robot, she is creative. http://www.businessinnovationinsider.com/images/2006/05/Creativity%20to%20innovation.jpg
If she applies those ideas to build a household robot, she is innovative.
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 45% of lucrative business ideas — whether breakthrough products or services, new uses for old ones, or ways to cut costs — come from employees…PricewaterhouseCoopers
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Individual creativity versus organisational creativity
Individual creativity
 People can learn to be more creative by reading books, participating in workshops, learning creative thinking techniques etc
Organisational creativity
 Making an organisation more creative and more innovative is much more complex, requiring the establishment of a culture of innovation together with tools for creative collaboration;
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a greater variety of people participating in the idea generation process equals a higher level of creativity and innovation.
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 variety of people with different backgrounds and areas of expertise required
 at minimum, that teams are made up of people from different divisions within the company. At best, those people will also come from different locations or countries.
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Creative teams


Management placed for project or
Self created by asking for assistance by friends (though usually from same area of expertise)
Brainstorming groups
 When appropriate, business partners, customers and others from outside the
 company should be brought in to participate.
Networking
 seek the assistance of a colleague for ideas, advice or help – across company
 staff directories and discussion forum tools can help encourage
 people to network outside their departments and immediate contacts
Open collaboration
 through web based discussion forums
 a totally open environment to solve problems.
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 Screen good ideas and drop poor ones asap.
 Checked for
 Technical feasibility
 Financial feasibility and marketability
 Evaluate its demand, marketability, and profit potential
 Give ratings to ideas
>
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 Sufficient demand ?
 Profitable?
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Likely payback period?
Fit firm’s image ?
 Lifecycle of the product ?
 State of market and competitors ?
 Capability company to successfully produce and market product ?
 Ease of manufacture ?
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Product vs market (extended Ansoff’s growth matrix) Product
Same product
Extended product range
Incremental change
Totally new product
Same market
Better market coverage
Related market
Totally new market
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 Detailed version of new product (in documented user terms – a user requirements / functional list)
 Turing ideas into tangible products – customers perceive as being valuable
 Concept testing : with groups of consumers
Nokia has released images of Aeon, a concept phone that combines two touch-sensitive panels mounted on a fuel-cell power pack
Devices like this are all part of
Nokia's vision of 'wearable technology'. Users could wear the lightweight panels as a badge, or connected to a wrist-strap.
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 Initial marketing strategy based on product concept
 Formal market research for product’s potential
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 Review of sales, costs, profit projection
 Estimate potential sales, income, breakeven point, profit and return on investment from new ideas
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 R& D turns idea into product
 Develop product concept into physical product, via prototypes or simulations
 Engineering and production issues resolved via this process
 Consider materials, production processes, quality and safety
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Formal design – aesthetics
Functional design – performance, ,does it work is it reliable ?
 Economy of manufacture – does design allow manufacture efficiently and cost that allows profit ?
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 Pilot in small geographical area
 Field experiment in realistic setting
 Aims:
 Forecast probable results of a national launch
 Test operational effectiveness of the marketing plan
 Identify possible problems
 Assess customer reactions
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 Test market may not be true indicator
 Environment may change from test to national launch
 Competition may disrupt
 By exceptional marketing activity
 Launching own product
 Alerts competition to new product
 Simulated test marketing is getting more sophisticated
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 Introducing new product into the market
 Timing is critical for success
 Heavy promotional expenditure
 Choice of introductory pricing
 Well targeted and positioned
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 We have already seen organisational creativity and collaboration in the form of :
 Creative teams
 Brainstorming groups
 Networking
 Open collaboration
 These ideas can be extended to serve a
NPD cycle …
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 Departmental
 Activity stage (and concurrent engineering)
 Cross functional
 Decision stage models
 Conversion process
 Responsive Models
Network models >
Idea generation
Idea screening
Concept development and testing
Commercialization
Test
Marketing
Product development
Marketing Business
Strategy strategy development
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 Each department is responsible for certain tasks and once finished ‘passed over to next dept’ – over the wall’


Ad
 Each dept ‘knows what IT needs to do’
Disad
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Forward and backwards
Lots of rework
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 R&D provides interesting ideas
 Engineering – develop prototypes
 Manufacturing – viable mass manufacturing
 Marketing – then plan and conduct the launch
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 Similar to departmental
 Build around the activities
 Lots of feedback loops
 Simultaneous nature of activities (varying in intensity)
 Ad
 Groupings according to activity
 Disad
 Even more passing and therefore, procrastination
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 Dedicated team representing people from a variety of functions
 Ad
 Full representation
 Disad
 Organisation and project management disciplines need to be well developed
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 Set of decisions points or gateways must be passed.
 Iterative and uses f/b loops http://www.stage-gate.dk
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Conversion process
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Numerous inputs into a black box, converted into a product output
Input’s such as customer requirements, technical ideas, manufacturing capabilities all provide a product output
 Not disciplined , or measurable, or defined
Response model
 Behaviourist approach to decisions
 Organisational response to new proposals and ideas http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9310.2006.00413.x
for articles on innovation (journals)
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 Accumulation of knowledge from
 variety of sources eg marketing, manufacturing, R&D
 And over the progression of project from initial idea to development PLUS
 external linkages (additional information flow into organisation)
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