1 10-1
McGraw-Hill/Irwin © 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.

2 10-2
CHAPTER TEN

3 10-3
•
A step often seen as a necessary evil, yet very powerful and with long-lasting effects.
•
Forces pre-technical evaluation, and summarizes what must be done.
•
Methods range from simple checklists to complex mathematical models.

4 10-4
•
To decide whether technical resources should be devoted to the project.
–
Feasibility of technical accomplishment -- can we do it?
–
Feasibility of commercial accomplishment -- do we want to do it?
•
To help manage the process.
– Recycle and rework concepts
– Rank order good concepts
– Track appraisals of failed concepts
•
To encourage cross-functional communication.
• To help build consensus.

5 10-5
•
Judgment/Managerial Opinion
•
Concept Test followed by Sales Forecast
(if only issue is whether consumers will like it)
•
Checklists
•
Scoring Models
•
Grids or matrices

6 10-6
Factors:
Degree of Fun
Number of People
Affordability
Capability
4 Points
Much
Over 5
Easily
Very
Student's Scores: Skiing
Fun 4
People
Affordability
4
2
Capability
Totals
1
11
3 Points
Some
4 to 5
Probably
Good
4
4
Boating
3
4
15
Values
2 Points
Little
2 to 3
Maybe
Some
2
4
Hiking
4
3
13
1 Point
None
Under 2
No
Little
Figure 10.2
Answer: Go boating.

7 10-7
Figure 10.3

8 10-8
Figure 10.4
Note: this model only shows a few sample screening factors.
Factor
Technical Accomplishment:
Technical task difficulty
Research skills required
Rate of technological change
Design superiority assurance
Manufacturing equipment...
Commercial Accomplishment:
Market volatility
Probable market share
Sales force requirements
Competition to be faced
Degree of unmet need...
Score (1-5) Weight Weighted Score

9 10-9
•
Scoring Team:
Major Functions (marketing, technical, operations, finance)
New Products Managers
Staff Specialists (IT, distribution, procurement, PR, HR)
• Problems with Scorers:
May be always optimistic/pessimistic (easy or hard grader)
May be "moody" (alternately optimistic and pessimistic)
May always score neutral
May be less reliable or accurate
May be easily swayed by the group
May be erratic or subject to “halo effect”
May lack detailed input

Figure 10.5
Technical success factors:
•
Proprietary Position
•
Competencies/Skills
• Technical Complexity
• Access to and Effective Use of External Technology
• Manufacturing Capability
Commercial success factors:
• Customer/Market Need
•
Market/Brand Recognition
•
Channels to Market
•
Customer Strength
• Raw Materials/Components
Supply
•
Safety, Health and
Environmental Risks
Source: John Davis, Alan Fusfield, Eric Scriven, and Gary Tritle, “Determining a
Project’s Probability of Success,”
Research-Technology Management , May-June 2001, pp. 51-57.

•
Profile Sheet
•
Empirical Model
•
Expert Systems
•
Analytic Hierarchy Process

Figure 10.6

(This example is based on Project NewProd database.)
Eight Significant Factors
•
Product superiority
• Overall firm/resource compatibility
• Market need, growth, and size
• Economic advantage of product to end user
• Technological resource compatibility
•
Product scope (mass vs. narrow specialty)
•
Market competitiveness (-)
•
Newness to the firm (-)
Figure 10.7

Factor One: Product Superiority
1. Product is superior.
2. Product has unique feature.
3. Product is higher quality.
4. Product does unique task.
5. Product cuts user's costs.
6. Product is first of kind.
(There are about six items constituting each of the other factors as well.)

Factor Two: Overall Company Project Fit
Good fit in terms of managerial, marketing, engineering skills; financial, R&D, production resources
Factor Three: Market Need, Growth and Size
High need level by customers for this product class
Large, fast-growing market
Factor Four: Economic Advantage to User
Product reduces customer’s costs
Product is priced lower than competitors

Factor Five: Newness to the Firm
New product class, customer need served, technology, production process, sales force or distribution
Factor Six: Technological Capability
Good fit in terms of R&D and engineering resources
Factor Seven: Market Competitiveness
Intense price competition, many competitors, many new product introductions, changing user needs
Factor Eight: Product Scope
Market-derived new product idea, not a custom product (has mass appeal), mass market exists for product

Figure 10.8
Factor Mean Evaluation Impact
Project Superiority
Economic Advantage
Company-Project Fit
Tech. Compatibility
Newness to Firm
Market Need/Growth/Size
Market Competitiveness
Product Scope
1.19
-0.49
-0.16
-0.19
-0.24
0.88
-1.82
0.90
POSITIVE negative marginal (-) marginal (-) marginal (+)
POSITIVE positive marginal (+)

• Pros
– 1. Product Superiority/Quality
– 6. Market Need/Growth/Size
–
7. Market Competitiveness
•
Cons
–
2. Economic Advantage to User
•
Marginals
– 8. Product Scope
– 5. Newness to Firm
– 4. Technology Compatibility
– 3. Overall Company-Project Fit

Figure 10.9
Market Fit
Channel
Logis tic s
Tim ing
P ric e
S al es Force
Goal: S elect Best NPD Project
Tech. Fit
Desi gn
Mat erials
S uppl y
Mf g. Tec h.
Mf g. Tim ing
Diff erential
A dv antage
Dollar Risk
P ay of fs
Los ses
Uncer tainty
Unmit igated
Mi tigat ed
Products 1, 2, 3, and 4

Figure 10-10
Compare Relative Importances With Respect to Goal
UNCERT
DOLLAR RISK
TECHNICAL FIT
DOLLAR RISK
(1.5)
TECHNICAL FIT
(1.6)
1.6
MARKET FIT
(1.3)
1.0
(1.4)
Legend: Row element is X times more important than column element unless enclosed in parentheses. X can range from 1 to 9. Examples: DOLLAR RISK is 1.5 times more important than UNCERTAINTY;
DOLLAR RISK is 1.6 times more important than TECHNICAL FIT.

Figure 10-11
Ranking of Alternatives:
Project Overall Weight
P1 0.381
P2
P3
P4
0.275
0.175
0.170
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