New Products Management

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New Products Management

• Chapter 15
• Special Issues in Development

2
The Drive for Speed Accelerating Product
Development
Figure 15-2

• Accelerating Product Development through Managing
  the Organization
• Use projectization project matrix and venture
  teams.
• Use small groups to thwart bureaucracy.
• Empower, motivate, and protect the team.
• Destroy turf and territory.
• Make sure supporting departments are ready.
• Clear the tracks in shared departments.

3
The Drive for Speed
Figure 15-2 (contd.)

• Other Techniques for Accelerating Product
  Development
• Intensify resource commitments (integrate channel
  members parallel or concurrent engineering)
• Design for speed (CAD design, common components,
  design for easy testing, design in qualities that
  lead to fast trial)
• Prepare for rapid manufacturing.
• Prepare for rapid marketing.

4
Functional Interface Management
Figure 15-3

• Condition of
• Marketing-RD Percent of Project Outcome
• Interface Projects Success
  Failure
• Harmony 40.8 52 13
• Mild Disharmony 20.5 32
  23
• Severe Disharmony 38.7 11
  68

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Why the Friction?

• Stereotypes of marketing, technical,
  manufacturing personnel
• Physical separation
• Co-location
• Digital co-location
• Inept top management

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Managing the Interfaces

• Top managers eliminate the interface problems.
• Interface management takes time, not skills.
• Get rid of participants who are a continual
  problem.

7
Global Product Innovation

• Export make one product no special
  arrangements made.
• Global Strategy make one product same market
  conditions worldwide.
• International Strategy develop versions of the
  product to meet the needs of foreign markets.
• Multinational Strategy Projects directed by
  managers in each viable foreign market apply
  technology available from home market (Nestle).
• "Local Drive" Assign basic responsibility to
  foreign market some local RD and manufacturing
  mostly local marketing.
• Mix of the above firm develops and applies
  strategies appropriate to each foreign market.

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Must Weigh Several Risks

• May not understand foreign preferences.
• May not understand foreign culture.
• Underestimate foreign regulations.
• Lack of international managerial experience.
• Foreign host may change the laws, devalue
  currency, expropriate foreign property or undergo
  a political revolution.

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Deciding which Markets to Enter

• A company must define its international
  objectives and policies.
• Few or many countries.
• Few when
• Market entry and market control costs are high.
• Product and communication adaptation costs are
  high.
• Population and income size and growth are high in
  the initial countries chosen.
• Dominant foreign firms can establish high
  barriers to entry.
• Type of Countries
• Country attractiveness is influenced by the
  product, geographical factors, income and
  population, political climate, and other industry
  specific factors.

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Deciding How to Enter the Market

• Indirect Export - work through independent
  intermediaries to export products
• Direct Export - a company handles its own
  exports, through a domestic department, overseas
  sales branch, traveling reps, or foreign-based
  distributors/agents.
• Licensing - sell a foreign company the rights to
  your manufacturing process
• Joint Ventures - join with local investors to
  share ownership and control
• Direct Investment - direct ownership of
  foreign-based operations

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The internationalization Process

• Johanson - Swedish firms move through four
  stages.
• No regular export activities
• Export via independent reps
• Establishment of one or more sales subsidiaries
• Establishment of production facilities abroad.

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Deciding on the Marketing Program

• Product
• straight extension
• product adaptation
• product invention
• Promotion
• communication (promotion) adaptation
• dual (product and promotion) adaptation

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Deciding on the Marketing Program

• Price
• uniform price
• market-based price
• cost-based price
• Place (Distribution Channels)
• links include sellers international marketing
  headquarters
• channels between nations
• channels within nations

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Deciding on the Marketing Organization

• Export Department
• firm ships goods to other countries.
• International Division
• firm becomes involved in several international
  markets and ventures
• Global Organization
• firm no longer thinks of itself as a national
  marketer. All management and staff are involved
  in worldwide pursuits.

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Organizational Strategies

• Bartlett and Ghosal suggest that there are three
  organizational strategies.
• Global Strategy
• Treats the world as a single market.
• Multinational Strategy
• Treats the world as a portfolio of national
  opportunities.
• Glocal Strategy
• Standardizes certain core elements and localizes
  other elements.

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