INTRODUCTION TO

NEW PRODUCT DEVELOPMENT - NPD

 PRODUCT CONCEPT
NEW PRODUCT CONCEPT
 1. Anything that can be offered to a market
for attention, acquisition, use or
WHAT IS consumption that might satisfy a want or
A PRODUCT? need
2. Could be included: services, events,
persons, place, organizations, ideas, or a
mixture of these.
 RESEARCH AND DEVELOPMENT

R T D
Basic Technology Product
Research Development Development
• Discovery process • Loosely structured • Structured methods
• No set timing • Difficult to plan • Planned timing
• Unpredictable returns • Less predictable • Predictable outcome
• Long term • Medium term • Short term
 CHANGING DIMENSIONS OF
COMPETITION

Manufacturing: Product Development:

Cost and Quality Features and Function

Competitiveness today is more than ever based on

product development capability.
Five Levels of Meaning for a Product
fundamental need or want that consumers satisfy by
consuming the product or service

basic version of the product containing only those

attributes or characteristics absolutely necessary for
its functioning but with no distinguishing features.

a set of attributes or characteristics that buyers

normally expect and agree to when they purchase a
product

includes additional product attributes, benefits, or

related services that distinguish the product from
competitors

includes all the augmentations and transformations

that a product might ultimately undergo in the
future.
 New-to-the-world (really-new) products (10% of new products):
• Inventions that create a whole new market. Ex.: Polaroid camera, Sony Walkman,
Palm Pilot, Rollerblade skates, P&G Febreze and Dryel.
New-to-the-firm products (20%):
• Products that take a firm into a category new to it. Ex.: P&G brand shampoo or
coffee, Hallmark gift items, AT&T Universal credit card, Canon laser printer.
WHAT IS A Additions to existing product lines (26%):
NEW PRODUCT? • Line extensions and flankers that flesh out the product line in current markets.
Ex.:Tide Liquid, Bud Light, Apple’s iMac, HP LaserJet 7P.
Improvements and revisions to existing products (26%):
• Current products made better. Ex.: P&G’s continuing improvements to Tide
detergent, Ivory soap.
Repositionings (7%):
• Products that are retargeted for a new use or application. Also includes
retargeting to new users or new target markets. Ex.: Arm & Hammer baking
soda sold as a refrigerator deodorant; aspirin repositioned as a safeguard against
heart attacks; Marlboro retargeted as a man’s cigarette.
Cost reductions (11%):
• New products that provide the customer similar performance but at a lower cost.
May be more of a “new product” in terms of design or production.
 1. New Products are Big Business
2. Consumer Needs and Wants Change
3. Product Is At The Maturity Stage Of The
WHY Product Life Cycle
NEW PRODUCT ?
4. Product Reaches The End Of Its Product Life
Cycle
5. Business Environmental Changes
6. Competitors
7. All Products Experiencing Problems
PRODUCT
LIFE
CYCLE
MANAGING
PRODUCT
LIFE
CYCLE
 STRATEGIC
ROLE Sales from new products

Sales ($)
OF NPD
IN Sales from product extensions

THE GROWTH OF
HIGH TECH
COMPANIES Sales from present products

Now 2-3 years 3-5 years 5-10 years

SAMPLES OF
SUCCESSFUL
PRODUCT

Examples of engineered, discrete, physical products (clockwise from top

left): Belle-V Ice Cream Scoop, AvaTech Avalanche Probe, iRobot Roomba
Vacuum Cleaner, Tesla Model S Automobile, Boeing 787 Aircraft.
Radio MAGNO
APPLE: SIMPLY BETTER PRODUCTS
IROBOT ROOMBA
 Percent of Products that Fail
90
90
NPD : HIGH RISK –
80
HIGH RETURN 70
60
Although you may hear
much higher percentages, 50 40
careful studies supported by 40
research evidence suggest 30
that about 40% of new 20 10
products fail -- somewhat 10
higher for consumer 0
products, somewhat lower Sometimes Quoted Research Reports Sometimes Claimed
for business-to-business in Press
products.
  Microwave ovens (Pop con)
 Aspartame (NutraSweet)
 ScotchGard fabric protector
 Teflon
NOT ALL NEW  Penicillin
PRODUCTS ARE  X-rays
PLANNED?  Dynamite
 Velcro
 The Pacemaker
 Insulin In each case, an accidental
discovery -- but someone
 Post-It-Note knew they had something
when they saw it!