New Product DevelopmentLufthansa German AirlinesLSNYU Fall 2006

Lufthansa concentrates its activitieson the core competencies of its six strategic business segments

Passenger business MRO

Leisure travel

Logistics

IT Services

Catering

Lufthansa is an innovative corporation and a leader in the aviation industry

Within the last five years, the products below were introduced in the passenger business segment-Lufthansa Passage

• All Business Class Jet• Onboard wireless internet• Dedicated First Class terminal• New Business Class Product • Private Jet

and products in development……

•Onboard medical products•Charter service

A new product process will offer efficiency and focus

- The launch of Lufthansa Private Jet was not seamless

- Onboard medical products will launch in approximately 6 months

Team assignment

Brainstorm ideas that will increase the chance of a successful launch

Implementing the Stage-Gate process at Lufthansa

Step 1- DiscoveryCreate an idea bankDelegate a manager

Idea

Idea

Idea

IdeaIdea

IdeaIdea

Idea

IdeaIdea

Idea

IdeaIdea

Idea

Idea

Idea

Gate 1

Stage 1

Gate 2

Stage 2 Gate 3

Stage 3

Gate 5

Stage 4

Gate 4

Stage 5

Idea ScreenCustomer intelligence/market researchEducation on product and featuresIs the product recyclableUse of benefit measurement technique-scoring modelCan the project be completed within 20 weeks deadlineDeliverables for Gate 2 decided

Product Manager/Department head

ScopingPreliminary market assessment/Surface research

- Medical training - Webinar- Outsource - Web based training- In house - Off the rack- Sales collateral - Provided by manufacturer- Internet

Project managerTimeline 4days

Gate 1

Stage 1

Gate 2

Stage 2 Gate 3

Stage 3

Gate 5

Stage 4

Gate 4

Stage 5Decision to build a training program

- Does the product fit within the corporate training program- Will usage of the product help reach targeted sales goals- Financial requirements- Deliverables for Gate 3 decided

HR Manager/Director of Sales Timeline 5 days

Building the business case

- Define the new product concept- Competitive analysis- Detailed technical appraisal- Business and financial analysis- Conduct RFP with outside vendors- Consult with manufacturer/doctors

Project Manager Timeline 25 days

Business Case

Offering a sales training program will increase the probability of reaching sales goals.

Type Program 1Web based program developed by LHS

Supported with in house training and sales collateral

Program 2Training purchased and provided by manufacturer. Supported with sales collateral

Pros - Web training will be updated with product development and news.

- Monies spent to develop program roll back to LH

- No LH resources needed to develop program- Lower initial cash outlay

Cons - Responsibility to ensure the web content is accurate

- Risk that sales staff may rely solely on web content as sole source of information

- Without a developed in house training program, financial resources will be needed to continue training new staff on product features

Cost - Budget of $60,000

- 75% for web program payable to LHS

- Budget of $48,000

- Two training sessions at a cost of $24,000 per session

Misc. - Web program prototype can be modified for other products at minimal cost

- Critical path/project plan will be provided

- While the training product offered is good, all further training will rely on outside sources

- Critical path/project plan will be provided

Gate 1

Stage 1

Gate 2

Stage 2 Gate 3

Stage 3

Gate 5

Stage 4

Gate 4

Stage 5Decision to spend

Is the product within our budget?Does it accomplish objectives?Will it offer a competitive advantage? Deliverables for Gate 4 decided

Vice PresidentTimeline 5 days

Development

Web program in development with LHSSales collateral in development with marketing teamTraining coordinator enters projectConsultation with manufacturer/doctors

Timeline 45 days

Gate 1

Stage 1

Gate 2

Stage 2 Gate 3

Stage 3

Gate 5

Stage 4

Gate 4

Stage 5Product review

Does the product meet our needsIs it ready to move to testingAre the financials within budgetTimelineDeliverable for Gate 5 decided

HR Manager/Director of Sales/Training CoordinatorTimeline 2 days

Testing & Validation

Web program sent to targeted staff for testingConference call arranged for Q&ASurvey completed by test group to determine products strengths and weaknesses

Training Coordinator/Product ManagerTimeline 2 days

Gate 1

Stage 1

Gate 2

Stage 2 Gate 3

Stage 3

Gate 5

Stage 4

Gate 4

Stage 5

Review of testing

Was the feedback positive?Are improvements required?How is the timeline?Is the training program adequate?

HR Manager/Product Manager/Training CoordinatorTimeline 5 days

Launch

Implement training programSales collateral completed and ready for distribution

Post launch reviewEvaluate productFinancial reviewEvaluate strengths & weaknesses

Product Manager/Project Manager/Department Head

Thank You

Gate 1

Stage 1

Gate 2

Stage 2 Gate 3

Stage 3

Gate 5

Stage 4

Gate 4

Stage 5Benefit measurement used for go/kill decisionSales involvementEducation on product and featuresSales incentivesIs the product recyclableCan the project be completed within 20 weeks deadline

Product Manager/Department head