NEW PRODUCT DEVELOPMENT

Why come up with a new
product?
•Competition
•Maintain market position
•Consumer needs always change
•Technology
•Rules and regulation 1

Booz Allen & Hamilton puts new
products into 6 classes;
• New to the world – new product, new market
• New product lines – new to the entering the
established market.
• Addition to existing product line – new to the
company to supplement established product
line.
• Improvement in revision to existing product
2

Cont.
• Improvement in revision to existing product
• New product that replace existing product
• Reposition – existing product targeting new
market or market segmentation.
• Cost reductions – new product that provides
similar performance at lower costs.
3

How do companies handle New
Product Development
1) Product manager/brand manager usually so busy
managing their product line giving little time to new
product and brand modification or extension.
-They also lack specific skills or knowledge needed to
develop unique new product.
2) New product managers (reporting to group product
managers) position new product development
however they tend to think in terms of product
modification and line extension limited to their
product market.
4

Cont.
3) New product department mostly in large company –
the manager of the department has authority and
access to top managers.
- Major responsibility includes generating and screening
new ideas working with R&D department and carrying
out field testing and commercialization.
4) New product venture team – is a group brought
together from various operating department and
charged with developing specific product for the
business.
---They are entrepreneurs relieved of their duties.
5

The eight stages of NPD Process
1 Idea generation – is it worth considering ,is the
idea compatible with the company objectives.
2 Screening - strategies and resources
3 Concept development and testing
6

Cont.
4 Marketing strategy – can we find a cost
effective affordable marketing strategy.
5 Business analysis- will this business meet our
profit
6 Product development – have we developed a
technically commercially sound product.
7

Cont.
7 Market Testing- Comments from the Market.
8 Commercialization – are product sales
meeting expectations?
8

Searching for new product ideas
- The new product process starts from the
search for ideas. The search should not
be casual.
- Top management should define the
product and market to emphasize the
product strategy
- It should state the new product
objectives whether;
10

Cont.
1) It is a high cash flow market share
2) A market share domination
3) Or some other objectives.
It should state how much effort should be
devoted to developing original products,
modifying existing product and coping
competitor’s products.
11

Sources of New Product Ideas
1 Company staff and records
-Company personal and records often supply
helpful suggestions to new product ideas
especially those having to do with product line
additions and product improvement. Records
12

Cont.
2 Customer Analysis
- It must be remembered as often as possible
that the customer comes first, that is
someone often within the company develop a
product but the problem is how to find the
market customer and channels of
distribution.
13

Cont.
- The marketing concept holds that customer’s
needs and wants are the logical place to start
the search to new product ideas.
14

Cont
• Hippel has shown that the highest % of ideas
for new individual product originate with
customer. Technical companies can learn a
great deal by studying a special set of their
customers lead users mainly those customers
who make the most part advanced use of the
company’s product and recognize needed
improvements ahead of their customers
15

Cont.
- Companies can identify company’s needs and
wants through customer surveys, projective
test focused group discussion and suggestion
and complaints letters from customers.
16

Cont.
-Many of the best ideas come from asking
customers to describe their problems with
current products.
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Cont.
3 Competitors
• Competitive products are a major source of ideas
• Because many product features can not be
protected by patent their replication (often with
improvements) is pursued aggressively by other
firms in the industry.
• Other important sources of ideas are the
advertising of competitors, their direct mail
efforts and their technical literature and
catalogue and their exhibits at trade shows.
18

Cont.
• Trade fairs – competitors flow most to look for
information
• When in business keep an eye on your
competitor because they are also keeping an
eye on you.
• The Japanese are masters of this competitive
strategy imitations and improvements rather
than innovators.
19

Cont
4 Government Agencies
-Published list of patents that are available for
licensing or sale.
- Research findings published by various state
agencies e.g. scientific, Agriculture research
board.
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Cont.
5 Miscellaneous sources e.g. marketing research
agencies, industrial consultancies, patent
attorneys, inventors and universities and institute
labs.
• NOTE: top management can be another major
source of new products however this is not
always constructive as an executive pushes
through a petty idea without thoroughly
researching on the marketing size or interest
leading to major product failure.
23

Cont
NOTE: top management can be another major
source of new products however this is not
always constructive as a new executive pushes
through a petty idea without thoroughly
researching marketing size or interest leading
to major product failure.
24

Idea generating techniques
Good ideas come out of inspiration,
perspiration and techniques. A number of
(creativity) techniques can help individuals
and groups to generate better ideas.
25

Cont.
1) Attribute listing
• -This technique call for listing the major
attributes of existing products and then
modifying each attribute in the search for an
improved product.
• -This capitalizes on the concept that any
future change in a product must involve one
or more of its current attribute.
26

Cont.
• What is a product attribute?
-These are of three aspects;
1)Features
• Can be many things e.g. dimensions (size),
sourcing ingredients services, structures,
esthetic characteristics, manufacturing
performance, trade marks.
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Cont.
Trade mark
-It is a legal term meaning the same as brand. It
identifies one seller’s product and thus
differentiates it from products of other sellers.
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Cont.
2)Functions
- Is how products work e.g. a pen that sprays
ink on a paper?
- There are unlimited in variety but are not used
as often as benefits and features .
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Cont.
3) Benefit
- Can be many things e.g. uses sensory
enjoyments, known material for good well
being and economic gain. They can be direct
e.g. having clean teeth from using a
toothpaste (Colgate) or indirect e.g. romance
following from clean teeth.
30

Cont.
-Theoretically the three basic types of attributes
occur in sequence. A feature permits a certain
function which in turn leads to a benefit. A
shampoo may contain certain proteins (a
feature) that coat the hair during shampoo or
washing (function) which leads to more shine
on the hair. (Benefit)
31

Cont.
• 2) Checklist
It uses all attributes evolved from dimensional
analysis.Itis one of today’s widely used idea
generating techniques.
-Checklist is based on 8 questions
• can it be adapted?
• Can it be modified?
• Can it be reversed ?
32

Cont.
• Can it be combined with anything
• Can it be substituted
• Can it be minified (made smaller)
• Can it be rearranged in some ways
• Can it be magnified
33

Cont.
-Checklist produce a multitude of potential
new product concepts however some of them
worthless and are therefore time consuming.
-Checklist technique is frequently used as an
aiding problem solving.
34

Cont
Gap Analysis
---It’s a statistical technique which produces
maps of the market which are used to
determine how various products are
perceived and how they are positioned on the
market map. Several levels of sophistication
of the technique are available and firms have
a choice to use simple forms or complicated
versions. Gap maps are made in three ways:
35

Cont.
• Managers use known data to plot product on
a map to make a determinant gap map.
• A manager uses customer attribute rating (AR)
to get data from users from an AR
perceptional.
36

Cont.
• A manager uses overall similarities OS to get
data from users for an OS perceptual group
map thus determinant maps use our factors
and our scores .
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Cont.
3) Forced relationship
- Here several objects are listed and each
product is considered in relation to every
other object.
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Cont.
e.g. an office equipment manufacturer wanted
to design a new desk for executives. Several
objects were listed e.g. a desk, television set,
clock, computer and copying machine etc.
The result was a fully electronic desk with all
the other objects fitted inside.
40

Cont.
4) Morphological Analysis
• Morphological means structure and this
method calls for identifying the structure
dimensions of a problem and examining the
relationships among them.
41

Cont.
5) Need problem identification
• Starts with the consumer, consumers are
asked about their needs, problems and ideas
e.g. can be asked about their problem in using
their product or their category
42

Cont.
• Marketing research interviews can be
conducted for customer responses about a
product on whether that is satisfied, slightly
dissatisfied or completely dissatisfied the
respondents describe their problems and
complaints in their own ways
43

Cont.
• The various products could be rated if their
seriousness incidence and cost of remedying
to determine which product improvements to
make The above technique can be used in
reverse whereby consumers receive a list of
problems and tell which products come to
mind as having each problem.
44

Cont.
6) Brain storming
• Technique developed by Alex Osborn for
stimulating group creativity. A group usually
consists of 6 – 10 people and conducts
sessions lasting for about an hour. It is clearly
stated at the beginning that the aim is to get
as many ideas as possible.
45

Cont.
• The wilder the better and there is no
evaluation done on other members ideas.
• Osborn laid down four guidelines for brain
storming which are:
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Cont.
1 Criticism is ruled out. Negative comments on
ideas must be with held until later.
2 Free willing is welcomed and the wilder the
better with no restrictions what so ever.
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Cont.
3 Quantity is wanted so nothing is permitted to
slow down the session.
4 Combination and improvements are achieved
when each person’s suggestion is carried to
another stage of development or application
by the next person.
48

Cont.
Synectics
• This method was developed by William J.J
Gordon who felt that Osborns brainstorming
session produced solutions too quickly for a
sufficient number of perspectives had been
developed
49

Cont.
• Gordon decided to define the problem so
broadly that the group had no clear idea of
what was happening. The brainstorming
sessions are longer with minimum of three
hours.
50

Cont.
Gordon described five principles underlying the
synectics method.
1 Deferment – look first for view products rather
than solutions.
2 Autonomy of object – let the problem take on
a life of its own.
3 Use of the common place – take advantage of
the familiar as a spring board to the strange.
51

Cont.
4 Involvement/ detachment – alternate bet
entering into the particulars of the problem
and standing back from them in order to see
them as instances of something universal.
5 Use of the metaphor – let apparently the
irrelevant accidental things suggest analogies
that are sources of new view products.
52

Cont.
• Any company can attract good ideas by
organizing properly in motivating groups to
submit ideas. Ideas should be sent to an idea
chairperson whose name and phone number
should be known and put in written form and
reviewed each one week by an idea
committee.
53

Cont.
- The idea committee should sought ideas into
three groups – promising ideas, marginal ideas
and rejects.
• Promising – brilliant
• Marginal – on the boarder live
• Each promising idea should be briefly
researched by the committee member who
reports back. The surviving promising ideas
then move into a full scale screening process.
54

Topic Three
DO NOT PACK YOUR BAGS YET
55

IDEA SCREENING
The purpose of screening is to reduce the
number of ideas to an attractive practicable
few.
How does screening help?
1 We need a screen that helps us decide
whether technical resources, systems design
and engineering should be devoted to the
project and if so, how vigorously.
56

Cont.
- Decision rests on
i) Can we do the job? That is the feasibility of
technical accomplishment.
ii) Do we want to do the job? Feasibility of
commercial accomplishment e.g. fridge with
transparent door and contains a DVD
57

Cont.
2 Screening steps helps manage the :
• Cycling unacceptable but potentially
worthwhile ideas back into the ideation stage.
• Rank ordering the good ideas such that we
have same options on stand by when an
ongoing project stops/is cancelled.
• Recording the appraisals on the rejected ideas
to prevent reinventing the wheel.
58

Cont.
3 The screening process encourages cross –
functional communication. It is a learning
process particularly in making managers more
sensitive to how other functions work. It
flashes out all basic disagreements about a
project and sets them up for discussion.
These disagreements put the spot – light on
pot holes/ hurdles that the idea of the project
is faced with development and show where
new people would be needed/ recruited.
59

Screening Error Types
In screening ideas, the company must avoid two
types of errors;
• A drop error – occurs when the company
dismisses an otherwise good idea. The easiest
thing to do is to find fault with the other
peoples ideas. If a company makes too many
drop errors, its standards are too
conservative.
60

Cont
A go error – occurs when the company
permits a poor idea to move/ grow into
development and commercialization.
Three types of product failure can occur :
61

Cont.
1. Absolute product failure – uses money and
its sales do not cover variable costs.
2. Partial product failure – looses money but its
sales cover all variable costs and some of the
fixed costs.
3. A relative product failure – yields a profit but
one that is less than the company’s normal
target rate of return.
62

Cont.
Screening alternatives
Three schools of thought
A) Opinion Poll
Some organizations especially smaller ones and
those not being much into new product work
prefer an opinion poll where one / more people
make a judgment on some informal checklists
Participants may have a printed list of the
evaluation products as memory joggers.time
consumingbut it gives more relible results.
63

Cont.
Development Process
• Some organizations have a development
process that is really none technical – it is
limited to the existing products simple
variations are made on what is already on the
market knowing they can easily make the item
a bit unique and market it reasonably well.
The only issue is whether consumers will like
it.
64

Cont.
C) The scoring Model
The scoring model a mechanical arrangement
of checklist of factors with weights .The
factors are arranged in order of importance.
Each factor will be having a corresponding
weight and the idea with the highest points
will be taken.
65

Concept development and testing
FORTH TOPIC
66

Cont.
-Attractive ideas must be refined into testable
product concept.
- We can distinguish between a product idea,
product concept and a product image.
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Cont.
Product idea
-Is any possible product that the company
might offer to the market.
68

Cont.
Product concept
• It is an elaborated version of the idea
expressed in meaningful consumer terms.
69

Cont.
Product image
• It is the particular picture that consumers
acquire of an actual or potential product.
70

Cont.
Concept development
-Any product idea can be turned into several
product concepts e.g. if product developers
determine that they will produce a new candy
bar, the answer to the following might help
them to formulate a more specific concept
from the general ideas.
71

Cont.
• Who will buy the product – a candy bar may
appeal as a sweet a high energy snack or an
emergency food for diabetics.
72

Cont.
Under what circumstances will the new
product be used?
• A candy bar can be offered to children as a
reward or used as a meal substitute or eaten
by diabetics offering from too much insulin.
73

Cont.
Three category concepts
• Sweet
• High energy snack
• An emergency food
74

Cont.
• The three category concepts sweet, high
energy snack and an emergency food, position
the idea within a category and determine
what other products, the product would be
competing against.
75

Cont.
• The category concept defines the product
competition. Once the category concept is
chosen the next task is to show where the candy
bar would stand in relation to other products for
example sweet contrasts in the product
positioning map can be utilized in communicating
and promoting the concept to the market (two
dimensions of cost and hardness.)
76

Cont.
-Next product concept has to be turned into a
brand concept. This is done through the
brand positioning map showing the current
position of the three existing brands of
sweets.
78

Cont
• The company needs to decide how much to
charge and how much sugar to add the new
brand will gain distinctiveness in the sugar low
price position as opposed to next to another
brand name and fighting for share of the
market. This decision requires researching the
size of alternatives preference segments in
the market.
80

Concept Testing
• -After a concept has been developed the next
step is to test it. Consumer reactions are
obtained by using a verbal description or a
picture of the product and asking for
candidate’s opinion.
• -At this product the developers want to know
how they can improve the product idea and
the best way to find out is to ask the
consumer
81

Cont.
-The reliability of a concept test increases the
more concrete and physical the stimulus.
-Develop soft, high sugar level and low price.
-Consumers are asked to respond to these
questions about these concepts:
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Cont.
1) Are the benefits clear to you and believable –
this measure the concept communicability
and believability? If the scores are low the
concept must be refined or revised.
2)Do you see this product as solving a problem
or filling a need for you – this measures the
need level the stronger the need the higher
the expected consumer interest.
83

Cont.
3)Do other product currently meet the need and
satisfy you – this measure the gap level between
the new product and the existing products the
greater the gap the higher the expected
consumer interest. The need level can be
multiplied by the gap level to produce a need gap
score. The higher the need gap score the higher
the expected interest. A high need gap score
means that the consumer sees the product as
filling a strong need and is not satisfied with
available alternatives.
84

Cont.
4)Is the price reasonable to the value? - This
measures perceived value the higher the
expected consumer interest?
5)Would you (definitely, probably, probably not,
definitely not) buy the product – this
measures purchase intend and would expect
it to be thigh for consumers who answered
the above three goals positively.
85

Cont.
6) Who would use this product and how often
would it be used – this provides a measure of
user targets and purchase frequency.
86

Cont.
• From the answers received and summaries made
the marketer can judge whether the concept is a
broad enough and strong enough consumer
appeal. The need gap levels and purchase intend
level can be checked against the standards for
the product category to see whether the concept
appears a winner, long short or a looser.
Concept development and testing methodology
applies to any idea e.g. electrical new machine
tool or new banking service or a new health plan.
87

MARKETING STRATEGY
TOPIC FIVE
88

Introduction
-There is need to plan the marketing strategies
to be used.
- There is need to have heavy marketing input as
it will guide the implementation of the plan.
- The launch plan is commonly known as the
marketing plan.
-Marketing plan is recognized as a plan for the
full business activity launch.
89

Relationship Marketing
-The marketing plan should create in the market
place the same tight cooperation that
technical people will use in the development.
-For a new product this has to be taught
especially when the chosen market segment
has had no previous connection with the firm.
93

Cont.
- Relationships must be built through
advertising, delivery, involving the market in
the selling process, and through considering
their reaction to everything the organization
do i.e. pricing, packaging and branding.
-There should be a bond between the market
and the organization.
94

Cont.
- There is need to follow their early use of the
product up to satisfaction.
-This process can be referred to as interactive
marketing.
95

Marketing Strategies
1) Market concentration
An organization may choose:
a) a total market – the whole market
b)Market segmentation – divide the market and
target a specific segment.
96

Cont.
c) Mass customization – is micro carried to
extreme. It is a policy that prepares the firm
to offer individualized new products to any
person/firm in the market at the time of
purchase. It forces the development of
product process capability at the time of
purchase.
97

Cot.
2) Leadership Posture
-There are four leadership posture choices
market leader, market follower, market
challenger and a nicher.
98

Cont.
• Market leader – doesn’t have to be a pioneer,
but develops an innovation that will propel
the firm into leadership shortly.
• Market follower – may plan to improve on the
pioneer’s product very rapidly or move slowly
or may slash production costs and go for the
price buyers.
99

Cont.
• Market challenger – is usually new in the
market and will aggressively challenge for the
leadership position. The new product will be
unique.
• A nicher – the firm is focusing on a small piece
of the market and may have a specially
designed product or simply one positioned for
that segment.
100

Cont.
• Market challenger – is usually new in the
market and will aggressively challenge for the
leadership position. The new product will be
unique.
• A nicher – the firm is focusing on a small piece
of the market and may have a specially
designed product or simply one positioned for
that segment.
101

Cont.
3) Product/Market Matrix
- This is the traditional strategies market
planning matrix. The options are product
improvement, market penetration, new
market department or diversification.
102

Cont.
4) Strategic integration
-A launch plan does not stand alone. It may
have specific goals set for it, but the
organization wants something else from it.
- There is need to decide, does the product
stand alone or it is on lead something else
such as a bridge to another market.
103

Cont.
5) Speed of market entry
- Everyone today assumes the development
phase is being pushed as fast as it can be. A
launch plan should have a speed guideline
decision from four options;
104

Cont.
i. No emphasis on space
ii. Pre launch speed to launch date
iii. Post launch speed to success
iv. Pre and post launch speed
105

Cont.
6) Production Requirements
-It is important to make sure that all the
necessary materials are present to come up
with the new product.
106

Cont.
- Sometimes it is disappointing to find out that
the accounting department holds on to
millions of dollars yet the production
department shut down for want of product
parts, communication is important in
acquiring the parts for the product.
107

Cont.
The strategic core of the launch
-The core strategy statement identifies the
intended customer segment (target market)
positioning (how our item is better than
others are being used) and what particular
mix of marketing tools will be used to carry
the message.
108

Cont.
- For example we must become teachers. Our
new product is a break through but it is
complex. Either we can explain what is and
how it works or we are dead. We are not sure
we can do that, so we are going to roll it out
to our best customers first and stay with them
until we find out how.
109

Cont.
• Internal Support
-Mini-plans involve groups within the
organization, and the act of creating them and
implementing them is called internal
marketing.
110

Cont.
. It starts with a scan of the full internal support
system, with a candidate look at every person
or group whose work is critical to success. Are
they currently capable? Can they be made
capable? Where are the turf restraints and
bureaucratic bulwarks? (protection,
Safeguard)
111

Cont.
• Technical
-The team doing the marketing is well
prepared on to work on technical product
verification, technical information for labels,
packages, package inserts, selling literature,
and training of key personnel.
112

Cont.
• Manufacturing
-Marketers are interested in products that
meet technical claims that meet quality
standards, and that are ready when shipment
is to begin.
113

Packaging
• It is the technology of enclosed or protecting
products for distribution, storage, sale and use
• It also refers to the process of design,
evaluation and production of packages.
• It is a coordinated system of preparing goods
for transport ,warehousing, logististics sale
and end use.
114

• Packaging contains ,protects, preserves,
transports, inform and sells.
• Packaging has a significant impact on the
efficiency and effectiveness of production
process.
• Packaging involves brand recognition
• Brand recognition occurs when a consumer
can identify a brand by its attributes.
• Packing can lead to impulse buying
115

Cont.
• Packaging
- It is very important especially when the new
item will be distributed through self – service
environments, when the product category is
already established so the new item will have
to force. Its way in, and when many strongly
entrenched competitors sit next to the next
another on store shelves.
116

• Examples of companies that do packaing
• Zim packang cos
• Mega pack
• Pro plastics
117

Cont.
Packing can be divided into 3;
• Primary Packaging – is the material that first
envelopes the product and holds it perhaps a
bottle for pills or polyethylene bag for a
computer CPU.
118

Cont.
• Secondary Packaging – is outside of the
primary package. It may gather a group of
primary packages and holds them for
transportation or display. It may be a card
box that holds the pill bottle.
• Tertiary Packaging – is the bulk that holds
secondary packages for shipment. The large
box or the pallet for example.
119

Cont.
Various roles of Packaging
• Containment (hold for transporting),
• Barrier and Physical Protection (from the
elements and the careless),
• Safety - from causing injury,
120

Cont.
• Display – to attract attention,
• Information
• Persuade.
• Marketing
• Security eg can use water tamper resistance.
• Convenience
121

Sales Forecasting
TOPIC SIX
122

Cont.
-There are three general approaches used to
forecast a new product’s sales.
- The right – hand column shows the forecasts
or outputs of the forecasting system.
- The middle column state the key variables
determining how much will be sold.
123

Cont.
-The behavior variables include awareness, trial,
availability and repeat.
- If potential customers go through the A-T-A-R
sequence, sales will follow.
-The left-hand column contains the two factors
that determine how many potential
customers work their way through the A-T-A-R
sequence and the speed with which they do
so.
124

Cont.
Estimating replacement sales
- To estimate replacement sales management
has to research the survival age distribution of
its product. If you buy something how long
will it take you before you buy another one
e.g. bread – seven people daily.
125

Cont.
- The usage rate and the distribution indicate
when the first replacement sales will take
place.
- The actual timing of replacement will be
influenced by the customers economic
outlook, cash flow and product alternatives as
well as a the company’s prizes financing terms
and sales effort.
126

Cont.
Estimating repeat sales
- For frequently purchased new products the
seller has to estimate the repeat sales as well
as the first time sales, that is because the unit
value of frequently purchased products is low
and repeat purchases take place soon after
the introduction.
127

Cont.
- A high rate of repeat purchasing means that
customers are satisfied and sales are likely to
stay thigh even if all first time purchases have
taken place.
- The seller should note the percentage of
repeat purchases that take place in each
repeat class that is those who buy once, twice,
trice, etc.
128

Cont.
- Some product and brands are bought for a few
time and dropped.
- It is important to estimate whether there
repeat purchase rate is likely to raise or fall
and at what rate with deeper repeat purchase
classes.
129

Projected cash flows should
include:
1)Development cost - there are divided into
three;
• Product development cost of researching
developing and testing the physical product.
• Marketing research cost – will cover cost of
fine tuning assessing the market that is
packing tasting, in homes sample tasting
home testing and testing market.
130

Cont.
• Manufacturing development cost – covers
cost of new equipment, renovating the plant,
investing into new inventory.
131

Cont.
• Marketing cost – marketing mix you will
incurred for example promotion costs.
• Overheads – these are the shared expenses in
a e.g. company executive salaries, rent, light.
Expenses you could not stress to the product.
132

Product Protocol
-Some mats still use a relay system where one
department does its work passes the product
concept to the next department which does
its work and so on and so on.
133

Cont.
- The leading product innovators do not use the
relay system they use some type of
concurrent system one in which all the players
begin doing as much as they can at any time
as the project runs alone.
134

Cont.
• - Technical process engineers procurement,
marketing, R & D, etc are all doing something.
All these efforts are risky and will never work
well without something that keeps the team
together.
• -Something that allows them to make
reasonable speculation that something is the
product protocol also known as product
requirements or product definition.
135

Cont
1) .Target market
2) .Product positioning
3) Product attributes – three famous
attributes; benefits, features and function.
136

Cont.
4)Competitive comparisons/ bench marking
5)Augmentation dimensions – the product itself
is described in attributes. Augmentations are
the adds own e.g. new level of service or
better distributors support.
6)Timing – most new products must come out
faster but some need technical break
through.
137

Cont.
Questions
To lunch a product what preparations would
you have done. Positioning awareness level,
trial use to be obtained, availability level from
your estimate of what you intend the market
is going to be repeat use and satisfaction
level. Advertising break date, brand
awareness.
138

Cont.
8) Financials – price level, discounts sales
volume, sales dollars, market share, profits,
net present value.
9) Production – plans to be build. Do you need
to acquire any machinery – take into account
the volumes you would want to build – quality
to be achieved?
10) Regulatory requirements
.
139

Cont.
11)Cooperate strategy requirements upper
management support should be obtained.
12) Key potholes – a list of things which
management go wrong.
• Example – Hewlett Packard’s product
definition
140

Cont.
• Understanding user needs
• Strategic alignments
• Competitive analysis
• Product positioning
• Technical assessment
• Priority criteria
141

Cont.
• Regulation compliance
• Product channel issues
• Product endorsement by upper management
• Total organizational support.
142

Technical development stage
Characteristics required in today’s technical
development activity;
1 Commitment to fair principles which are ;
i) focus
ii) End user drive – need to constantly refer to
our customers to make sure we make what
they want always think of the customer e.g.
Japanese start with customers.
143

Cont.
3)Productivity – you want to set out yourselves
to be productive – want to earn profit.
4) Quadriad – there are four things in the
quadriad which are: Speed – can finish when
the new technical is now available module
must do what is aspect to do. Quality, Cost –
watch your prizes when doing work. Value.
144

Cont.
2 A clear and accepted product innovation
character i.e. a document that charts the
company direction. It tells the new product
group its goals and objectives entails the
group how it will pay the game.
145

Cont.
3 Leadership – top management must select a
group leader and then stay out of the way.
This will help the project to be a success. If
it’s the management people might resist and
the new product will not be developed.
146

Cont.
4) Culture - for new product a good culture
brings freedom. Egalitarianism – as humans
people are essentially equal) constructive
environment there is an absence of hidden
agenda and there are open statements of
goals and objectives and forthright appraisals.
147

Cont.
5) Ownership - if a person takes whole or part
ownership in a project that person have
“bought in.” To get ownership by team
members requires training and empowerment
and motivation.
148

NEW PRODUCT DEVELOPMENT

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