9 B2B New Product Strategies

New Product Development Process

Stages of product development: Idea generation Product screening Business case analysis Product/strategy/plan development

Make or buy decision / proprietary information Marketing mix

Test market (Alfa and Beta Testing) Product launch Hand off to customer education team

New Product Development Efforts

3 billion500 million

25 million150000Production investment $

3 billion400 million

50 million150000Development cost $

10000800753Development team – external (people)

68008001003Development team – internal (people)

4.5 years3.5 years1.5 years1 yearDevelopment time

130000100002003No of unique parts

130 million

170003003Sales price $

30 years6 years2 years40 yearsSales lifetime

50 Units/year

100000 units/year

4 million units/year

100000 units/year

Annual production volume

AircraftAutomobile

Deskjet printer

Power Screwdriver

Product Architecture - Intel

Platforms Derivitives Mhz Year

486 SX 16-25 1991

SL 20-33 1992

DX2 50-66 1992

Pentium I 60-66 1993

II 233-300 1997

III 350-600 1999

Celeron 266 266 1998

300 300 1998

533 533 2000

Itanium 3400 2003

+ MMX & Xeon series


Proprietary disclosure agreement: Supplier not to take any product or market

information to competitors Customer to assure orders on suppliers Time period after which the supplier is free

to establish customers Discovery approach:

To extend a new product application to other similar market or application segments


Role of Marketing: Understand technology in depth Define & redefine current and future

customer needs Motivate other company departments Screen and select ideas from all sources Guide the product development Reward efforts of technical & support

staff Help in Identifying right talents


Why new products fail: Missing market plan Development proceeding in isolation Overestimated market size Offerings fail to meet the needs

adequate Market will not pay

Technology Adoption Cycle

Adopters

Period

Technophiles/Innovators

Visionaries

Pragmatists

Conservatives

Laggards

Continuum of Innovations

Radical innovations are developed by R&D groups (in companies, in independent R&D labs and in Universities):

Amgen took brilliant science and found a unique use for it

Example: Immune booster to remove the side effects of chemotherapy

Agilent's polymer-based microfluidic structures to analyze fluids in small samples (biochemists and engineers working together)

New-product Planning Processes

Technology push processes Platform products – from base product to product

variations – automobiles, computers, appliances Process-intensive products: to utilise

organisational process capabilites – foods, beverages, chemicals, semi-conductors

Customised products: responding to customer variations of a standard products – industrial products, furniture, tourist plans

Proactive Cannibalisation: deliberate introduction of product variation to compete with its own existing products to ward of threats

Entrepreneurial Marketing

Hiring the right kind of people Persistently pursue a passion Comfort with trying new things and

learning from mistakes Bias for action

Directing appropriate activities Removing impediments Providing incentives


Incremental: Extension of existing

product or process Product characteristics

well defined Competitive

advantage on low-cost production

Specific market need development

Demand-side market Customer pull

Radical: New technology

may create new market

R&D invention in the lab

Superior over 'old' technology

Supply-side market Technology push

Innovation Across the Offerings

Disruptive innovation: technology that is substantially different than that exists in market

Sustaining innovation: improves the existing dominant technology and offerings


Breakthrough Breakthrough Mismatch: Delusionary

Incremental Mismatch: Shadow Incremental

Breakthrough Incremental

Supplier vs Customer Perceptions

Supplier'sPerception

Customer's Perception

9 B2B New Product Strategies

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