New Product Development and Launch

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New Product Development and Launch

• PMBA 623
• Dr. Charles Noble

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New Product Development

• Gathering and organizing organizational
  resources (money, people, skills, materials) to
  take new product and service ideas from
  conception to reality

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Different Approaches to NPD

• Sequential (Stage Gate)
• Overlapping
• Parallel Processes

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Common Stages in NPD
Idea Generation
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Idea Generation

• A systematic search for new product ideas
• You need lots of ideas to end up with a good
  product or two
• At Gillette, of every 45 carefully developed new
  product ideas, 3 make it to the development stage
  and only 1 ever makes it to the marketplace
• Pharmaceutical firms may require 6,000-8,000
  starting ideas for every successful new product

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Idea Screening Concept Development

• Screening reduces the large number of ideas
  produced at the generation stage
• A screening committee might be used to eliminate
  many based on projected customer demand,
  manufacturing challenges, and other factors

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• Concept Development a detailed version of the
  idea is stated in meaningful consumer terms
• Different variations might be explored using the
  same general concept
• Focus groups and other methods can be used

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ProductDevelopment

• RD develops the product concept into a physical
  product
• Investment ramps up significantly at this point
• Products may undergo rigorous tests to insure
  they work safely
• Scuba diving Barbie must swim for 15 straight
  hours to satisfy the company that she will last a
  year
• Test marketing may also occur at this point

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Product Launch (commercialization)

• Manufacturing commences
• Launch timing and location is determined (market
  rollout plan)
• Colgate-Palmolive uses a lead country approach
  internationally where Optims shampoo is launched
  first in Australia and Mexico then rolled out to
  Europe and Asia
• Introductory promo campaign

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Sequential (Stage Gate) Approaches

• The basic concept is that stage gates (or
  checkpoints) are built in through the product
  development process
• The process is evaluated rigorously before it is
  allowed to pass to the next stage
• This approach is generally conservative it
  minimizes financial exposure
• This process is also slow relative to other
  approaches - many companies dont have the time
  luxury of working through this process

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Overlapping and Parallel Approaches
Idea Generation
Idea Screening Concept Development
Product Development
Product Launch
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Overlapping and Parallel Approaches

• Processes are happening simultaneously
• RD is developing prototypes
• Marketing is test-marketing, developing packaging
  and advertising campaign
• Production is gearing up to mass produce
• This approach is
• Faster (generally a good thing!)
• Riskier (more financial exposure)
• More difficult (requires complex coordination
  across functional lines

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The New Product Development (NPD) Imperative
- HBR
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Forces Driving NPD
Development Imperative
Implications
Driving Forces

• Intense Competition
• Changing Customer
• Expectations
• Accelerating Technological
• Change

Fast Responsive

• - Shorter
• Development
• Cycles
• Better Targeted
• Products

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Defining Development Projects
PS2 slimline
Nintendo Wii
Breakthroughs
Platforms
Maintenance
Integration of new and existing components
and processes into a systems solution
Minor modifications Product maintenance
Completely new product Building product and
process capabilities for the future
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Breakthroughs usually lead to imitation
Imitators?
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Breakthroughs usually lead to imitation


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The end