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Transcript of The New Product Development Process Copyright © 2002 by Rabikar Chatterjee (1) The New Product...
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
(1)
Opportunity IdentificationMarket definitionIdea generation
DesignCustomer needs Sales forecasting
Product positioning EngineeringSegmentation Marketing mix
TestingAdvertising and product testing
Pretest and prelaunch forecastingTest marketing
IntroductionLaunch planning
Tracking the launch
Life Cycle ManagementMarket response analysis
Competitive monitoring and defenseInnovation at maturity
Harvest
Reposition
Go
Go
Go
Go No
No
No
No
The New Product Development Process
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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Northern Telecom: The Norstar Launch
Exemplary Product Development Process• Parallel cross-functional development team
from the outset
• Voice of the customer – end-user and reseller
• Clear business model
• Zero-based design
• Structured “gating” procedure to convert business proposition into marketing program
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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The Stage-Gate System
Robert G. Cooper, “Stage-Gate Systems: A New Tool for ManagingNew Product,” Business Horizons (May/June 1990)
Idea GATE 1
InitialScreen
GATE 5
Pre-Comm-ercializationBusinessAnalysis
GATE 4
Post-Development
Review
GATE 3
Decisionon
BusinessCase
GATE 2
SecondScreen
STAGE 1
PreliminaryAssessment
STAGE 3
Development
STAGE 4
Testing andValidation
STAGE 5
FullProductionand MarketLaunch
Post-Implementation
Review
$
STAGE 2
DetailedInvestigation(BusinessCase)
Preparation
STAGE 1
PreliminaryAssessment
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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Benefits of the Stage-Gate Process
• Quality focus
• Market orientation
• Up-front homework
• Parallel processing– Speed– Multifunctional, multidisciplinary inputs
• Better project evaluations
• Road map for project leader and team
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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Critical Variables in Choice of New Product Development Process
• Complexity longer time to complete project• Novelty (dynamic, unpredictable markets and
environment shorter response time
Sequential process does not work if response time must be short relative to time to complete project!
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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Complexity vs. Novelty: Implications for NPD Process
Reactive (organic) FlexibleHigh
NOVELTY
Low ContinuousIncremental
improvement
Sequential (Stage-Gate)
Low High
COMPLEXITY
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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Integrating New Technology with Customer Preferences:
The Adaptive Co-Development Process
TECHNICAL POSSIBILITIES
CUSTOMER PREFERENCES
InitialInput
ProductRelease
BETA
1
BETA
3
BETA
2
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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Uncertainty Profiles in Traditional Versus Adaptive Co-Development Process
Degree ofUncertaintyin ProductDefinition
ConceptDefinition
Design, Development,and Testing
Market Launch
Time
Adaptive Process
Traditional Process
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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NPD Process: Netscape Navigator 3.0Start
Objectives
Spec Complete
Feature Design and Coding
Input from User Feedback
Integration
Stabilize
Full Release
Beta 0Internal Beta 1
Beta 2
Beta 3
Beta 4
Beta 5Beta 6
Jan Feb Mar Apr May Jun Jul
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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In Summary….
• The new product development process must be– Methodical and cross-functional– Customer oriented
• What’s the right NPD process for you?– Complexity v. Novelty– Other industry- and company-specific factors
• Analytical tools and methods available– Examples: Lead user research, conjoint analysis
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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Lead User Research
• Who are Lead Users?– Lead with respect to cutting edge applications
of important market and technical markets– Experience needs ahead of others
• Types of Lead Users– Lead users in the target application– Lead users in analogous markets– Lead users involved with the more important
attributes relevant to the target application
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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Lead User Analysis: “Extremes versus Means”
• Identification of functionally novel products and service concepts should be done at the leading edge of markets and applications
• Evaluation of commercial potential should be done at the “means” of markets and market segments
Good reference on lead user research: Eric von Hippel, Stefan Thomke, and Mary Sonnack, “Creating Breakthroughs at 3M,” Harvard Business Review. September-October 1999
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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Conjoint Analysis: Basic Process
• Alternatives defined as combination of attributes, each specified at a particular level
• Identify important attributes and define appropriate levels and range for each (critical step!)
• Carefully selected set of alternatives evaluated by respondents– Preference data collected in various ways (rankings, ratings, pair-
wise comparisons)
• Overall preferences for alternatives “decomposed” into utilities (“part worths”) for each attribute level– Assumption: Overall utility for a product is a combination (usually
additive) of the utilities (“part worths”) of the attribute levels
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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Example: Partners for Dates
Salient Attributes Levels
1. Common interests Few, Many
2. Personality Introvert, Extrovert
3. Wealth Poor, Rich
4. Attractiveness Average, Gorgeous
5. Education No, Yes
6. Age Younger, Older (than you)
How many possible combinations?
2 2 2 2 2 2 = 64
Need 8 (carefully selected!) profiles for estimation
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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Conjoint Analysis of Dating PreferencesPART WORTH UTILITIES: TOTAL SAMPLE (N = 40)
1.0
0.5
0
Common Interests
Few Many
1.0
0.5
0
Personality
Introvert Extrovert
0.44
1.0
0.5
0
Wealth
Poor Rich
0.31
1.0
0.5
0
Attractiveness
Plain Gorgeous
0.45
1.0
0.5
0
Education
Less More
0.22
1.0
0.5
0
Age
Younger Older
0.18
The New Product Development ProcessCopyright © 2002 by Rabikar Chatterjee
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Conjoint Analysis of Dating PreferencesPART WORTH UTILITIES: MEN (N = 37) AND WOMEN (N = 3)
1.0
0.5
0
Common Interests
Few Many
1.0
0.5
0
Education
Less More
0.20
0.64
1.0
0.5
0
Age
Younger Older
0.16
0.59
1.0
0.5
0
Attractiveness
Plain Gorgeous
0.42
1.00
1.0
0.5
0
Personality
Introvert Extrovert
0.42
0.64
1.0
0.5
0
Wealth
Poor Rich
0.27
0.95