CREATING

NEW
PRODUCTS
AND
SERVICES

Session 9
 LEARNING OBJECTIVES

1 Develop a formal process to support new product

development

2 Identify the product and organizational factors which influence

success and failure.

Choose and apply relevant tools to support each stage of

3 product development.

4 Understand the differences between products and services

and how these influence development.
NEW PRODUCT DEVELOPMENT (NDP)

COMPANY OBJECTIVES

PRODUCT SUCESS
Video: Nissan NPD
 NPD PROCESS

1. Idea Generation: Systematic search for new product ideas

Sources: internal (R & D process) and externals (i.e., customers,
competitors, suppliers, and others (i.e., “crowd sourcing”)
2. Ideas Screening
• Spot good ideas and drop poor ones asap as company only
wants profitable product outcomes.
• Concept Development and Testing (i.e., prototype)
Idea  concept  image  testing
3. Marketing Strategy
• Target Market, positioning, sales, market share, profit goals
• Price, distribution, budget
• Long-run sales, profit goals, marketing mix strategy
New Product Development

http://mystarbucksidea.force.com/apex/ideaHome http://www.ideastorm.com/

http://www.kraftrecipes.com/about/collaborate-with-kraf https://www.innocentive.com/
t.aspx
 NPD PROCESS

4. Business Analysis
• review of sales, costs and profit projections
• if satisfy goals, product moves to development
5. Product Technical Development
• R&D develops concept into a physical product
6. Test Marketing
• functional & consumer tests  test marketing
• Standard, controlled, simulated
7. Commercialization
• introducing a new product into the market
• when, where, to whom, how?
 DECISION MATRIX

 We’re going to apply a decision matrix to the ideas

you have selected

 A decision matrix is a simple approach to applying

evaluating ideas

 We can compare different aspects on the matrix,

depending on what is relevant to the organisation at
the time, or what might help the team decide between
ideas.
 LEARNING ACTIVITY

• Spend 15 minutes mapping your ideas on a decision

matrix as a group.
• Make sure you note down ‘why’ you have placed each
idea in its quadrant. It is critical that you can justify your
choices here as this determines which idea your
organisation will pursue.

• Being able to articulate your thinking like this will be

critical for the assessment
 POSITIONING PROJECT: MATRIX
The ultimate goal is to map your ideas onto a matrix like this.
This matrix essentially highlights how far away from your current knowledge and skills the idea will
move the organisation. The further you stretch the organisation from what it knows, the greater the
risk, but sometimes that is necessary!
 PROBLEM INTENSITY
Circling back to your problem

 Are we solving an important problem?

 Ideally we would also apply this screening technique when we first were selecting
which problems to pursue.

 But it’s useful to do it now too.

 It helps us check that our ideas are still solving an important problem. Through the
ideation process we may have shifted considerably to a new space and moved away
from solving an real problem or helping them achieve an important Job to be Done.
PROBLEM INTENSITY

Commitment to solve
 LEARNING ACTIVITY

1. Work with your group to map the problem you

focused on for your persona on the problem
intensity model grid.

2. Where does it fit? Is it a problem worth pursuing?

3. Did your ideation steer you away from the original

problem?

4. Would you go back and focus on a different

problem? Commitment to solve
 FACTORS INFLUENCING PRODUCTS
SALES OR FAILURE

1. Product advantage
2. Market knowledge
3. Clear product definition
4. Risk assessment
5. Project organization
6. Project recourses