Professional Documents
Culture Documents
Engine90 Crawford NEW PRODUCT DEVELOPMENT Print
Engine90 Crawford NEW PRODUCT DEVELOPMENT Print
Definition
New Product Development is a
process which starts from a
motivating goal, moves through an
idea conception phase, is reduced
to practice in its implementation
phase, and is completed in a
transitional phase, during which
time the product becomes
established.
I.S Servi, New Product
Development & Marketing
Preager, 1990
Product from a waste material • She put waterbase white paint into a nail polish
Combine 2 existing materials bottle to paint over her mistakes … this later
Health benefit
became known as liquid paper.
Personal experience
Why didn’t I think of that,Freeman and Golden Why didn’t I think of that,Freeman and Golden
Behind Every Man is a Woman …..
Vaseline With a Better Idea
Tupperware - Earl Tupper (1939) convinced Du Pont
A chemist in 1859 converted black to sell him a polyethylene waste product. He
residue from an oil-drilling-rig and con- developed a new refining process to turn the waste
verted it into a safe white jelly that could slag into a purified plastic that was:
be applied to dry skin, and a number of
other applications. • Clear, Flexible, unbreakable, nontoxic, light-weight,
and very easy to clean.
• Turned a seemingly worthless byproduct into • A Florida distributor, named Brownie Wise, started
a useful product. the Tupperware parties to sell the product !
• Integrated two materials to form a new product. • Combined two existing materials
to make a new product.
The Club
S.O.S. Pad After thieves eluded a GM anti-theft device
and car alarm and stole Jim Winner’s
In 1908 an aluminum cookware salesman
new Cadillac sedan in 1985, he came up with
was having difficulty selling his product.
the idea of ‘the Club’.
Although his Al product was lighter weight
and less expensive than copper and iron,
He got the idea from his days in the Army when
former customers had a horrible time cleaning
he prevented other soldiers from driving off with
the Al cookware.
his jeep by winding a metal chain around the
steering wheel.
He impregnated steel wool pads with soap to
solve the cleaning problem of his product …
He worked with a auto mechanic to build a
His wife came up with the catchy name SOS
prototype … he interviewed both car thieves and
SAVE OUR SAUCEPANS
cops to perfect his device .. making it the ultimate
Why didn’t I think of that,Freeman and Golden Why didn’t I think of that,Freeman and Golden
barrier.
A Quick Introduction to New Product Issues The Five Questions of New Product Development
In a new product stage, always ask basic questions
•Market Driven - Technology Fueled
•Avoid Playing the Marketing Game Define business strategies
•Identify Real Customer Why ? and consider how you will
evaluate success and failure.
•Collateral Revenue
•Clear Distribution Channels Define products you want to When ?
•Product Positioning / Competition What ? develop and the market needs
they are expecting to satisfy.
•Intellectual Property
Define the implementation
•Product / Service How ? modes from both technical Be sensitive to timing in
•Ergonomic / Human Factors and commercial view points. all product development
endeavors
•Identify Resources / Infrastructure Define who is accountable for
•Time-to-Market Who ? what and never lose sight of
the interfunctional nature of
new product development.
‘Company should be market and customer driven
Baird’s Rule of Thumb and technology fueled’
Technology
Your new product should have 3-10 times Fueled
the advantage in terms of price and/or
performance of an existing product for a
customer to switch.
Products >$50K are typically sold by direct sales Competing on the basis of cost alone
representatives - expensive sales staff, highly trained, • Computer memory modules often
need to cover salaries and commissions for the sales gain market share primarily on the
force. basis of price.
Products <$5K are typically sold through distribution. Cost advantage alone does not guarantee success
Hire independent distributors or sales reps that • for example, you develop a new word processing and
promote your product. Can give up 40% of sale speadsheet program equivalent to Word and Excel
price for their efforts …. usually a proven distribution and sell it for one-half the price - customers recognize
channel will accelerate the time to market. Microsoft, and perceive better customer service,
product life, and future product upgrades.
• Adding three dimensional data representation • Name well-known, Osborne Computer was the first to
and charting capabilities to a 2D spreadsheet. sell a personal computer w/ software for < $2,000.
Microsoft
success Example
in
likely erta 3-D information displays - expensive - no real benefit to
c
vs. Competition
cc by Francis and
failure
su
Heather Kelly.
likely
low
low high
Perceived Cost vs. Competition
Good
Service- - these can be show-stoppers
Good Support
Products
Factors that Lead to New Product Success Aligning Core Competencies & Identify Weakness
Forces:
-politicians
-regulatory agencies
-media
-financial institutions
Motivating the Organization New Product Ideas - Ways to Generate Them
Organization needs to develop new products for its
future livelihood
Paradox:
new products are a means of survival
yet Ideas come from internal & external sources:
companies resist innovation many times Internal: engineers
scientists
marketing, etc.
Explanation: employees
companies and organization are formed to
create stability External: customers
and competitors
new product teams often envisioned as revival of obsolete products
renegades and redefine product line, and new products by acquisition
perhaps basic philosophy
The document should contain illustrations, models, simulations α Alpha - testing with the organization
that integrate a multidisciplinary team’s thoughts.
β Beta - primary user base
γ Gamma - those who might construct
barriers or facilitate sales
(regulatory agencies, media,
New politicians)
product Statement of Marketing
idea requirements need δ Delta - testing after product launch
The player rotates >500 rev/minute. The code lies - superior product
on a spiral trail ~3miles in length and is read by a
laser beam. The higher parts of the disk (land)
diffracts light differently than the lower parts (pit).
Successful Strategy Industry Eager to Develop New Format
Killer App
Compact disk
1981 Philips & Sony
49 companies
in Japan, US, Minidisk
Europe tried Germany Telefuncken
Killed vinyl to standardize
records digital format
Audio high density
technology
Boosted hardware Matsushita
market
109 CDs sold
1991
106 records sold
- Combine expertise
- Share market risk
Laser disk
- Facilitate establishment of standards
VHS
cheaper - won - Integrated organization response to
Betamax innovation; marketing just as important as R&D
Licensure
Market
to many
opened &
companies
set
industry
VHS standard
Philips and Sony merged to establish a common format. - Record industry needed new product - new
- Electronic Industry Association (EIA) of Japan customer who appreciated sound quality and
would pay for it
- Digital Audio Disc Council
- Union of strong technology (Philips) and Philips Sony
- Two competing corporations (Telefunken and aggressive marketing (Sony)
Matsushita) withdrew their technology and bought a
license - The Union ultimately convinced industry to
standardize CD
- Record industry reluctant, but creative and powerful
marketing overcame resistance because of strong - Superior Technology
customer and trade interest - Path to other markets - the portable one
- 3 cent royalty on each CD sold
1984
1985 3 million CD players sold worldwide
Strategic 1986
1987
9 million CD players sold worldwide
Partnership benefits
1988
risks 1989
1990
1991 Over 1 billion CD players sold worldwide
1992
Functional Specification
Statement of Requirements (Cont.) (may or may not be applicable to your product)
(may or may not be applicable to your product)
• Technical terminology • Program inputs/outputs
Functional Requirements
• Hardware platform • Operating environment
• Performance requirements
• Operating system • Reliability
• Systems requirements
• User-interface standards
• Human factors
• Help system
External Requirements • Input devices supported
• Environmental requirements • Copy protection
• Space requirements, infrastructure • Product features
• Documentation
Other Requirements • Debugging support
• Regulatory requirements • Limitations and restrictions
• International and export requirements
These are some phrases that you might see in your state-
ment of requirements - more qualitative (features, uses,
benefits, needs met, etc.)
Is a lightbulb a lightbulb ?
Light Bulbs
Statement of Requirements Flourescent Lamp Sylvania
Bulb
Features - robust, bright, long life, good efficiency, direction
Applications/Uses - indoor / outdoor lighting
Benefits - highly efficient coupled with low cost
Competition - GE, Philips
Estimate Pricing - cheap ($)
Who is the user - everyone needs lightbulbs
Sales - hardware stores, dept. stores, etc. Sun P-LED
Performance Requirements - bright, long life, efficient,
operate inside and outside
System Requirements - conventional 120 V electrical conduit
Human Factors - pleasant, soft light
Environmental - any concerns to the environment if it breaks
Frosted diffusion
glass
Reading Bulb versus Conventional Bulb Reading Bulb versus Conventional Bulb
brightness
Conventional
(lumens)
(lumens)
blue green red blue green red
Reading
Wavelength
1 2 3 4 5 1 2 3 4 5
No appreciable difference in visible light output Position Position
Electroluminescent Displays
Product Example
electrode
glass
Orange-yellow
light output for ZnS
Application of an electric field causes visible light to be
emitted from the phosphor layer
Indiglo / Limelite Nightlight Indiglo / Limelite Nightlight
Technology Technology
Functional Requirements
Some Statement of Requirements
Wavelength
polarizer
AM
LC
glass
color
filters
polarizer
Twisted Nematic Flat Panel Displays (Laptop Screen)
Statement of Requirements
Thin, lightweight
Good color purity
High Resolution
High Brightness
Low Power
15.1 Inch diagonal
Sell directly to integrators (Gateway)
Operate on battery pack
Operates for 6 hours
Portable Market
Statement of Requirements
Statement of Requirements
Competition:
Performance Req.:
Estimate Pricing:
System Req.:
Who is the User:
Human Factors:
Sales / Distribution:
Environmental, Safety, etc.:
Photopic Reflectance
780
∫ SPD
380
(λ ) R (λ ) y (λ )dλ Should I be the service
provider for electronic
%RP = 780 newspaper or should I
∫ SPD (λ ) y (λ )d λ manufacture the electronic
= 380 newspaper device ?
SPD (λ) R (λ) y (λ)
Front Stages
Pre-profit Continued
End and
Sales Sales
Gates
minim ize ma ze
ximi
Time Evolution