The Strategic Elements of Product Development

Question 1

ideally is cross-functional, comprising personnel from marketing, R&D,
engineering, manufacturing, production, design, and other functional areas as well.

Answer 1

new products team

Question 2

product innovation management, product planning, and new products management =

Answer 2

are the
same thing

Question 3

can be categorized in terms of how new they really are to the world, or to the firm

Answer 3

New products

Question 4

These products are inventions that create a whole new market. Examples: Polaroid camera, the iPod and iPad, Hewlett-Packard’s laser printer, Rollerblade brand inline skates, P&G’s Febreze and Dryel.

Answer 4

New-to-the-world products, or really new products.

Question 5

Products that take a firm into a category new to it. The prod- ucts are not new to the world, but are new to the firm. Examples: P&G’s first shampoo or coffee, Hallmark gift items, AT&T’s Universal credit card, Canon’s laser printer.

Answer 5

New-to-the-firm products, or new product lines.

Question 6

These are “flanker” brands, or line extensions, designed to flesh out the product line as offered to the firm’s current markets. Examples: P&G’s Tide Liquid detergent, Bud Light, Special K line extensions (drinks, snack bars, and crystals).

Answer 6

Additions to existing product lines.

Question 7

Current products made better. Examples: P&G’s Ivory Soap and Tide powder laundry detergent have been revised numerous times throughout their history; countless other examples.

Answer 7

Improvements and revisions to existing products.

Question 8

Products that are retargeted for a new use or application. Example: Arm & Hammer baking soda repositioned as a drain or refrigerator deodorant; aspirin repositioned as a safeguard against heart attacks. Also includes products retargeted to new users or new target markets; Marlboro cigarettes were repositioned from a woman’s cigarette to a man’s cigarette years ago.

Answer 8

Repositionings.

Question 9

New products that simply replace existing products in the line, providing the customer similar per- formance but at a lower cost. May be more of a “new product” in terms of design or production than marketing.

Answer 9

Cost reductions.

Question 10

three important elements in place:

Answer 10

new product process, product innovation charter, and effective product portfolio
management.

Question 11

involves taking an idea for a new product and bringing it through
several stages, including concept evaluation, product development, launch, and post-launch
evaluation. This process is typically depicted as a phased approach with evaluative steps
between each phase, although it can be more complex than that.

Answer 11

new product process

Question 12

is essentially a strategy for developing new products that align
with the company’s objectives and strategies while also addressing marketplace opportunities. It
helps ensure that the new product team stays on track and develops products that are in line
with the company’s overall goals.

Answer 12

product innovation charter

Question 13

helps companies evaluate which new products would be
the best additions to their existing product line based on both financial and strategic objectives. This ensures that the company is making informed decisions about which new products to invest
in and bring to market.

Answer 13

product portfolio management

Question 14

5 Phases of new product process

Answer 14

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

Question 15

The first phase of the new product process is important because it provides strategic guidance to the
new product team for idea generation and all remaining phases. There are three main activities that
feed into the strategic planning for new products.

Answer 15

Opportunity Identification and Selection

Question 16

This could be a bottling operation, a strong franchise with
dealers, or a manufacturing process engineering department that has overlooked or
underappreciated skills that could serve as a base for a new product program.

Answer 16

underutilized resource

Question 17

A company may discover a new material or technology with hundreds of
potential uses, as DuPont did with Surlyn.

Answer 17

new resource:

Question 18

A stagnant market, threatening competition, or evolving customer
needs may prompt a company to search for new opportunities, as in the case of the Tasty
Baking Company.

Answer 18

external mandate

Question 19

Upper management may set a five-year-out dollar sales target, and
the new products team may be tasked with filling part of the gap between current sales and
that target. Other internal mandates may simply be upper management desires, such as
Steve Jobs’s stated goal to “reinvent the phone” with the iPhone project.

Answer 19

internal mandate

Question 20

o Sometimes new product opportunities are straightforward, but in most cases, generating
new product ideas is challenging.
o An immense set of ideation tools has evolved to help with the process of creating new
product concepts.
o The most effective ideation approach is to identify problems that people or businesses have
and suggest solutions to them.
o This approach is called the problem find-solve approach.
o For example, if the opportunity is focused on “people moving their families over long
distances,” the first step is to study those people and understand the problems they face.
o While creating new product concepts may sound fun, it can be hard and frustrating work.

Answer 20

Concept Generation

Question 21

Before a company can begin developing new product ideas, they must first go through a process of
evaluation and screening, which helps determine which ideas are worth pursuing. This activity is
sometimes called screening or pre-technical evaluation and can vary greatly between firms.

Answer 21

Concept/Project Evaluation

Question 22

This phase involves giving shape to the product, either as a tangible good or as a specific sequence of
resources and activities that will provide an intangible service. It’s also the phase where the marketing
plan for the product is developed, starting with a rough sketch and gradually becoming more detailed.

Answer 22

Development

Question 23

the term or “commercialization” refers to the point at which a
company decides to start marketing a product, which is also known as the “Go” decision in the Go/No
Go process. This decision is often associated with significant investments such as building factories or
authorizing multimillion-dollar advertising campaigns.

Answer 23

Launch

Question 24

identifying a company skill or resource, or a customer problem. (Example:
skim milk drinkers don’t like the watered-down appearance of their drink)

Answer 24

Opportunity concept

Question 25

the initial idea. (Example: “Maybe we could change the color…”)

Answer 25

Ídea concept

Question 26

a more fleshed-out version of the idea with a clear statement of benefit.
(Example: “Our patented method of breaking down protein globules might make the liquid more
cloudy.”)

Answer 26

Stated concept

Question 27

a concept that has passed an end-user test, confirming a need for the product.

Answer 27

Tested concept

Question 28

a concept that fits with the company’s situation.

Answer 28

Fully screened concept

Question 29

a detailed product definition that includes the intended market user, problem
perceived, benefits, and mandatory features.

Answer 29

Protocol concept

Question 30

a tentative physical product or system procedure, including features and
benefits.

Answer 30

Prototype concept

Question 31

a product that passes a full test of fit with manufacturing and specifications are
written.

Answer 31

Batch concept

Question 32

the full manufacturing process is complete

Answer 32

Process concept

Question 33

a supply of the new product produced in quantity for field testing.

Answer 33

Pilot concept

Question 34

the product that has gone through the scale-up process from the pilot and is marketed for a market test or full-scale launch.

Answer 34

Marketed concept

Question 35

the new product meets the goals set for it at the start of the project.
(Example: “New, Full Body Skim has achieved 24 percent of the market, is very profitable, and
competitors are already negotiating licenses on our technology.”)

Answer 35

Successful concept

Question 36

is a set of systems and interfaces that form a common structure. This
common structure makes it possible to efficiently develop a family or stream of related
products. Essentially, a serves as a basis for all the individual product projects
within a family of products.
o The term platform originally gained usage in the car industry, but now a platform can be
a technology, a design, a subsystem—anything that can be shared by one or more
product families.

Answer 36

product platform

Question 37

are also significant and commonly used in business. Brands can be incredibly
valuable, sometimes worth billions of dollars, and many brand platforms are driven by CEOs.
Brands can be the starting point for many products that share the same brand and marketing
strategies

Answer 37

Brand platforms

Question 38

which can be based on
product type or customer. Today, most marketing efforts are conducted at the category level,
which means creating an overall plan for a group of related products. For example, a company
might have one overall plan for all their cake mixes, another for their do-it-yourself tools, and
another for their finance courses in college.

Answer 38

category platform

Question 39

SIX IMPORTANT AND PROVOCATIVE MODERN TRENDS

Answer 39

1.Just-in-time life
2. Sensing consumers
3. The transparent self
4. In search of “enoughness”
5. Virtual made real
6. Co-creation

Question 40

People like making spur-of-the-moment decisions based on real-time
information.

Answer 40

Just-in-time life

Question 41

People can sense their environment better now than ever before; what
might be “too much information” for some might be essential information for others.

Answer 41

Sensing consumers:

Question 42

There is more information about consumers available to product
managers now than ever before.

Answer 42

The transparent self

Question 43

Consumers are increasingly adopting simpler lifestyles marked by fewer material possessions and an increasing concern about quality of life.

Answer 43

In search of “enoughness”

Question 44

As more people become accustomed to virtual spaces, the boundary
between these and the real world will become increasingly blurred.

Answer 44

Virtual made real

Question 45

Due to increases in e-commerce and online communities, it is easier for customers
to communicate with each other, cooperate, and share information.

Answer 45

Co-creation

Question 46

Corporate mission, platform planning, and strategic fit can be used in a company’s new
product strategy.

Answer 46

The Product Innovation Charter

Question 47

is a document created by senior management to guide business units on innovation.

focuses specifically on new products and serves as a charter that outlines the
conditions under which an organization will operate.

is similar to a mission statement, but tailored to new product activities.

enables delegation, financing, and personnel assignments within a specific
scope of activity.

For new product teams entering uncharted territory, the PIC is an invaluable tool.

Answer 47

Product Innovation Charter

Question 48

goals and objectives are of three types: (1) profit, stated in one or more of the many ways
profit can be stated; (2) growth, usually controlled, though occasionally used defensively to help
the firm hold or retard a declining trend; and (3) market status, usually increased market share.

Answer 48

Goals and objectives of PIC

Question 49

• The purpose of product innovation must be understood, as changes in work can occur if the
  purpose changes.
• The product innovation charter (PIC) uses the standard definition that goals are longer-range,
  general directions of movement, whereas objectives are short-term, specific measures of
  accomplishment.
  o A PIC may aim for market dominance (as a goal) and 25 percent market share in the first
  year (as an objective).

Answer 49

Goals and Objectives Section of the PIC

Question 50

We think we are being creative, when in reality we are only coming up with ideas that our group will find acceptable. Remember that we are not trying to find the “conventional wisdom,” but truly original ideas.

Answer 50

Groupthink

Question 51

We keep going back to the same simple demographic targets (for example, the under-35 or under-50 markets). Great new product opportunities may be missed as a result.

Answer 51

Targeting error

Question 52

Despite the money spent on market research by the top firms, the reality is that little is understood about prospective customers. Lavish research spending doesn’t guarantee that it was done well.

Answer 52

Poor customer knowledge

Question 53

Creative types within organizations, as well as senior management, often think that the more complex the idea, the better it is (or the smarter and more promotable they seem). Complexity, however, is a major barrier to new product adoption (see discussion in Chapter 8

Answer 53

Complexity

Question 54

These same managers are also well-educated, high-income individuals accustomed to an upscale lifestyle. They may simply not understand the “typical” customer they are trying to sell to.

Answer 54

Lack of empathy

Question 55

A small new product team works fine, but large companies especially are prone to internal compe- tition for power and influence. This is not a healthy climate for a new product in the earliest phases of development.

Answer 55

Too many cooks

Question 56

A diverse team means a wide variety of perspectives and more creative stimulation, but also can lead to difficulties in problem solving and information overload.

Answer 56

Cross-functional diversity

Question 57

The team members need to have a sense of belonging and to feel they have a stake in the team’s success. Without this, they will be loyal to their functional area, not to the team.

Answer 57

Allegiance to functional areas

Question 58

Perhaps a little unexpectedly, if the interpersonal ties between team members are too strong, candid debate might be replaced by friendly agreement, resulting in less innovative ideas.

Answer 58

Social cohesion

Question 59

If senior management stresses continuous improvement, the team might stick with familiar product development strategies and make only incremental changes. Top management should encourage the team to be adventurous and try newer ideas.

Answer 59

The role of top management

Question 60

is a new way of developing products that many companies are adopting. It means
searching outside of the company for new ideas, research, and technology.

Answer 60

Open innovation

Question 61

• Form
• Technology
• Need/Benefit
  *crowdsourcing.
• Lead users

Answer 61

The Product Concept

Question 62

The physical thing or sequence of steps that make up a service.

Answer 62

Form

Question 63

The source of the form, including materials, machines, and scientific knowledge.

Answer 63

Technology

Question 64

The product must provide a benefit to the customer that fulfills a need or desire.

Answer 64

Need/Benefit

Question 65

Many firms have recently gone online to obtain product ideas from their customers efficiently:
this kind of open idea solicitation is known as

Answer 65

crowdsourcing

Question 66

are customers who are associated with a current trend, such as fiber optics in
telecommunications. They are at the forefront of the trend, have the best understanding of the
problems, and expect to benefit from solutions to those problems. These users may be easy to
identify, but they may also be outsiders or not established members of the industry. Working
with lead users can help product developers anticipate future problems and find better
solutions.

Answer 66

Lead users

Question 67

Importing new ideas multiplies innovation building blocks-ideas and expertise, resulting in more total sales generated from new products.

• Exporting ideas raises cash (IBM gets about $2 billion per year in patent royalties), and improves employee retention, since creative types know that good ideas will be exported and not buried.

Exporting signals the true worth of an innovation. Eli Lilly offers pharmaceutical licenses, but if outsiders don’t bite it suggests the value of the new drug is perceived to be low.

• Exporting clarifies core business: Boeing sticks with design and systems integration, and often finds partners for manufacturing.
• Risk: the deal is not structured in a way that captures the financial value of your innovation-ask Xerox!
• Proprietary secrets can be lost to a partner, even inadvertently.

⚫ Theft of technology, or poaching of top researchers, is a concern.

Answer 67

Advantage and risk of open Innovation

Question 68

involves listing the key problems of the current product and grouping
them by priority to focus on the most important ones during product development.

Answer 68

Reverse brainstorming

Question 69

are the characteristics of a product that describe what it consists of, what it does, and
how it provides satisfaction to the user.

Answer 69

Attributes

Question 70

They can be classified into three types attributes

Answer 70

features, functions, and benefits.

Question 71

can be further broken down into various uses, users, and contexts.

Answer 71

Benefits

Question 72

It’s important to define attributes broadly during

Answer 72

concept generation

Question 73

help in generating new product ideas by modifying existing attributes or
adding new ones, and then evaluating the potential of these concepts for development.

Answer 73

Analytical attribute techniques

Question 74

is a method used to determine the differences in perception between
what a company offers and what customers actually want. The technique involves comparing
the attributes of a company’s product or service to the attributes that customers desire. By
identifying gaps between these two sets of attributes, a company can better understand what
changes or improvements are needed to meet customer needs and preferences. The analysis is
typically done using surveys or other forms of customer feedback to collect data on perceptions
and preferences.

Answer 74

Perceptual gap analysis

Question 75

is a statistical technique with immense power under certain circumstances.
Its maps of the market are used to determine how various products are perceived by
how they are positioned on the market map.

Answer 75

Gap analysis

Question 76

Gap maps are made in three ways:

Answer 76

▪ determinant gap map.
▪ AR perceptual gap map.
▪ OS perceptual gap map.

Question 77

This is when a manager uses their expertise and judgement
to plot products on a map and identify gaps in the market.

Answer 77

Determinant gap map

Question 78

A manager collects data from customers by asking them to
rate product attributes, and then plots the products on a map based on those ratings.

Answer 78

AR(attribute rating)
perceptual gap map

Question 79

A manager asks customers to rate the overall similarity of
products, and then uses that data to plot the products on a map and identify gaps.

Answer 79

OS perceptual gap map

Question 80

is a statistical tool that simplifies a large number of product attributes to a
smaller set of key dimensions, which are used to create a perceptual map.

Answer 80

Factor analysis

Question 81

Another technique called ………….. can group customers based on their preferences.

Answer 81

cluster analysis

Question 82

(often called conjoint analysis) is a technique that is more commonly used in concept
evaluation. is a research technique used in product development and marketing to
determine the preferences and priorities of consumers. It involves presenting consumers with different
product concepts that have varying combinations of features, attributes, and benefits, and asking them
to choose which option they prefer. By analyzing these choices, trade-off analysis can help identify
which features or attributes are most important to consumers and what trade-offs they are willing to
make between them. This information can be used to optimize product design and development,
pricing, and marketing strategies.

Answer 82

Trade-off analysis

Question 83

present several “Creativity Templates” that can be used to manipulate the existing knowl- edge base encoded in product attributes to discover innovative new products. Procedure: Begin by identifying the determinate attributes, then manipulate these according to the four creativity templates.

Answer 83

Goldenberg and Mazursky

Question 84

Find a functional dependency between two independent variable attributes. The interaction may suggest a creative new product. Example: the color of the ink on a coffee cup is dependent on the contents, and a warning message can be revealed if the beverage is too hot.

Answer 84

Attribute Dependency Template

Question 85

Remove one of the components of the product and replace it with one from another
environment. The function the removed component performed is done by another component. Example: the antenna on a Walkman is replaced by the headphone cord.

Answer 85

Replacement Template

Question 86

Remove an intrinsic component and its function, in such a way as to functionally change the product. This may create a new product for a new market. For example: removing floppy and CD drives on laptop PCs resulted in the ultra-thin PCs.

Answer 86

Displacement Template

Question 87

Identify and create a new connection between a component internal to the prod- uct and one that is external to the product. Examples: Toothpastes with added whiteners, or suntan lotions with added skin moisturizers.

Answer 87

Component Control Template

Question 88

A-T-A-R concept

Answer 88

awareness-trial-availability-repeat

Question 89

To regularly use an innovation, a person or firm must first become aware of it,
decide to try it, find it available, and ultimately be satisfied with it enough to adopt or use it repeatedly.

Answer 89

Diffusion of Innovation

Question 90

means purchase point; may be each person, household, or department who participates in the decision.

Answer 90

Buying unit

Question 91

means someone in the buying unit hears about the existence of a new product with some characteristic that differentiates it; subject to variation between industries and even between developers.

Answer 91

Aware

Question 92

means the percentage chance that if a buyer wants to try the product, the effort to find it will be successful; often “percent of stores that stock it.” Direct sellers have 100 percent availability.

Answer 92

Available

Question 93

is variously defined; may be use of a sample in an industrial setting where such use has a cost associated with it, in most situations, means an actual purchase and at least some consumption.

Answer 93

Trial

Question 94

is also varied; on packaged goods, means to buy at least one (or two or three) more times; on durables, may mean be happy and/or make at least one recommendation to others.

Answer 94

Repeat

Question 95

pete

Answer 95

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