New Product Development Flashcards
GO errors
False positives– products that flop
“Harbingers of failure”: customers who consistently buy products that fail to resonate with the market
What causes GO errors?
Bonuses internally for successful outcomes
Reluctance to admit failure (career implications)
Sunk-cost bias/waste aversion
We already put so much time into this, why would we abandon it
Confirmation bias
A “champion” for the project who spreads their over-optimism throughout the organization
DROP errors
false negatives– dropping a product that had potential for success
Creativity templates
Systematic inventive thinking
List elements of a product in a structured way to come up with a new one
Subtraction
Simplifying a product
Avoids “feature creep”– growing complexity of using the product can outweigh whatever benefits the new features offer
Multiplication
Make one or more copies of existing product component
The different copies serve different functions
Ex: multi-blade razor
Division
Physical division: cut a product along a physical line
Preserving division: divide product into smaller pieces, where each piece still possesses all the characteristics of the whole
Task Unification / Replacement
Assigning new task to existing element of the product or its environment
Ex: pacifier can also be used as thermometer
Ex: seat backs on planes now have screens
Attribute Dependency Change
creating new dependencies between product attributes of its user or environment
Two things used to be independent, but we introduce a dependency
Ex: baby blue = boy, light pink = girl
Temptation bundling
Adding “wants” to “shoulds”
Ex: TV screen on Peloton– want to watch TV, should exercise
Test markets
Launch new product in small part of target market
Helps firms rehearse marketing strategies under realistic market conditions
Particularly useful when products have a high risk of failing or jeopardizing firm reputation
Hazard of test markets
Costly
Hard to find perfectly representative test markets
Competitors can monitor performance, disrupt
pre-testing ads
Measuring awareness index (enjoyable and engaging) and immediate persuasion (message and credibility)
