L1

Question 1

Why are new products important?

Answer 1

New products are result of innovation. And innovation has a number of important effects on society, including increased GDP, enabling greater communication and mobility, and improving medical treatments.

!!! Innovation may also pose some negative externalities (pollution, resource depletion, unintended consequences etc.)

Question 2

What is a new product?

Answer 2

Something new (to the company or to the world) that has value.

Question 3

What are the 10 success factors for NPD?

Answer 3

1) Seek Differentiated, Superior Products
2) Up-Front Homework Pays Off
3) Build-In The Voice Of The Customer
4) Demand Sharp, Stable And Early Product Definition
5) Plan and Resource The Market Launch Early In The Game
6) Build tough Go/Kill decision points into your process – a funnel, not a tunnel.
7) Organize Around True Cross-Functional Project Teams
8) Attack From A Position Of Strength
9) Build An International Orientation Into Your New-Product Process
10) The Role Of Top Management Is Central To Success

Question 4

What are the 5 phases in a New Products Process (NPD)?

Answer 4

1) Opportunity identification and selection (under utilized resources; new resources; external mandate; internal mandate).
2) Concept generation (not to come up with new idea, but HOW to solve the problem)
3) Concept/project evaluation:
- EVALUATE new product concepts on technical, marketing and financial criteria;
- RANK them and select best 2 or 3.
4) Development - clear product definition, team, budget, skeleton of development plan
5) Launch
- commercialize plans and prototypes
- begin distribution and sales

Question 5

What are the risks and the guidelines in speeding to market?

Answer 5

+ the product that is launched early is on the market for a longer period of time before becoming obsolete
+ being first and eliminating chance for competitors to be first to market and establish a positive reputation

• may be tempted to concentrate on only easy, incremental product projects;
• cut critical steps in the new products process in order to get cycle time down => quality sacrifices, annoyed customers and distributors
• inadequate attention to key marketing tasks in readying the product for launch (e.g. packaging, communication with customers)

Question 6

What is spiral development and why do it?

Answer 6

> Prototype/Build > Test > Feedback/Analyse > Refine/Revise >

• An early, nonworking version of the product, called a focused prototype, is built (this might be a new cell phone made of wood or foam, or perhaps it is a plastic nonfunctioning prototype that looks real but lacks wires).
• The prototype is tested with customers, who express likes, dislikes, purchase intentions, and so on.
• Customer feedback is obtained on what needs to be changed.
• Based on the feedback, the next prototype is prepared and the cycle continues.

WHY?
In the case of radical product innovation, a fluid, agile new products process might lead to more innovative results.

If the final form of the product is truly unknown, it may make sense for the firm to try several prototypes in rapid succession, showing them to customers, getting feedback, trying another prototype, then continuing in this manner until an acceptable form is identified.