Introduction

Question 1

What is innovation? (1)

Answer 1

‘Innovation is the successful exploitation of new ideas’ Innovation Unit, 2004

Question 2

What does innovation require? (2)

Answer 2

1. Innovation requires the interplay between a product/service offering (technology) and a market (people).
2. There are no shortage of ideas and invention in the world. The challenge is to introduce these successfully to a market.

Question 3

Why study new products? (4)

Answer 3

1. It is big business – billions of pounds annually on technical development alone.
2. The challenge of creating radical innovation
3. New products/services are the lifeblood of the organisation
4. 84% of executives regard innovation ‘extremely or very important’ to their companies’ growth strategy
   (McKinsey Global Survey 2010)

Question 4

What about globalisation in relation to new products? (3)

Answer 4

1. Top firms deploy over 50% of their R&D spending in foreign countries.
2. Global product teams allow firms to leverage their new product skills across their subsidiaries.
3. Design, R&D, and manufacturing may occur in different subsidiaries around the world.

Question 5

What is a key challenge and how is it met? (2)

Answer 5

1. Coordinating the efforts across multiple countries to launch a successful new product.
2. Having a global innovation culture – being aware of differences in business and cultural environments and being open to global markets

Question 6

What are some examples of firms with innovative cultures? (3)

Answer 6

1. Procter & Gamble: Gamble: products are developed globally in the firm’s 22 research centers located in 13 countries.
2. Apple: did product design and customer requirement definition in the U.S. and Japan in developing the iPod.
3. Ikea identifies unmet customer needs and commissions in- house and outsourced designers to compete for the design. Worldwide manufacturing partners compete for the manufacturing rights. The firm also has excellent global logistics for product delivery to stores and customers

Question 7

How come the new product development is all about teams? (3)

Answer 7

1. The new products team is a cross-functional team with personnel from marketing, R&D, engineering, manufacturing, production, design, and other areas.
2. All members of the team make a contribution to the new products process and the success of the team depends on how well they interact.
3. Try to avoid narrow functional viewpoints and stereotypes

Question 8

what are the 6 categories of what is considered a new product?

Answer 8

1. New-to-the-world (really-new) products: (10% of new products): Inventions that create a whole new market. Ex.: Polaroid camera, Sony Walkman, Palm Pilot, Rollerblade skates, P&G Febreze and Dryel.
2. New-to-the-firm products (20%): Products that take a firm into a category new to it. Ex.: P&G brand shampoo or coffee, Hallmark gift items, AT&T Universal credit card, Canon laser printer.
3. Additions to existing product lines (26%): Line extensions and flankers that flesh out the product line in current markets. Ex.: Tide Liquid, Bud Light, Apple’s iMac, HP LaserJet 7P.
4. Improvements and revisions to existing products (26%): Current products made better. Ex.: P&G’s continuing improvements to Tide detergent, Ivory soap.
5. Repositionings (7%): Products that are retargeted for a new use or application. Also includes retargeting to new users or new target markets. Ex.: Arm & Hammer baking soda sold as a refrigerator deodorant; aspirin repositioned as a safeguard against heart attacks; Marlboro retargeted as a man’s cigarette.
6. Cost reductions (11%): New products that provide the customer similar performance but at a lower cost. May be more of a “new product” in terms of design or production.

Question 9

What is the basic new product process? (5)

Answer 9

Phase 1: Opportunity Identification/Selection
Phase 2: Concept Generation
Phase 3: Concept/Project Evaluation
Phase 4: Development
Phase 5: Launch

Question 10

What are the principles and issues in the new product process? (5)

Answer 10

1. Between the phases of the process are evaluation tasks or decision points, where hard Go/No Go decisions are taken.
2. There is pressure to accelerate time to market (speed the product through this process), and phase overlapping and cross-functional teams are used to accomplish this.
3. Fuzzy gates are commonly used: this is a “conditional Go” so as not to slow down the process in analysis.
   issues:
4. Still fuzzy gates must have teeth! A potential problem is that the result should be No Go but the project goes through anyway.
5. Another problem: hollow gates (the Go decision is made but no financial support is provided).

Question 11

What is the gate process for new products? (5)

Answer 11

• stage 1: idea formulation
  GATE: Filter ideas to preliminary investigation
• stage 2: Concept formulation
  GATE: Filter projects to business opportunities
• stage 3. Product development
  GATE: Filter projects to product/process development
• stage 4. Test marketing
  GATE: Filter product to limited launch
• stage 5. international marketing
  GATE:Filter product to international marketing