New Product Development (NPD)

1
Chapter 12

• New Product Development (NPD)

2
New Product Development (NPD)

• Six types of new products (review)
• New-to-the-world products
• New product lines
• Additions to existing product lines
• Improvements and revisions of existing products
• Repositionings or restagings
• Cost reductions

3
New Product Failure Rate
98-99 80
Depending on the study
4
Reasons for New Product Failure

• CEO ego
• Market size overestimated
• Poor design
• Incorrect positioning
• Incorrect advertising
• Overpriced
• High development costs
• Competitor reaction

5
Managing the New Product Process

• Idea generation
• Idea screening
• Concept development and testing
• Market strategy development
• Business analysis
• Product development
• Market testing
• Commercialization

6
Company Background

• NPD into the online environment failed
• Focused on e-commerce and CRM
• Failed to thoroughly understand BI
• syndicated research issues
• Concern over technology-image decline
• Entrepreneurial customer base
• product to start own business
• bank would leverage intra and extranet
  technologies

7
High-Tech NPD

• NPD simultaneous with implementation
• Why?
• New product would be first in a product line for
  the bank
• Technology map
• resource inventory
• addressing gaps in the resources
• what to sell
• ongoing management

8
Why Did It Fail?

• Further into NPD before simultaneously implement?
• Step 3 in the organizational improvisational plan
• outside looking in information source
• Issues
• range of technological sophistication and product
  support services
• out-of-core competency