Written Report

Of
The New Product
Process

Submitted By: Ando, Khen

Calisas, Roxan
Tiong, Edwen

Submitted To: Mrs. Loryly G. Dalogdog, LPT

THE NEW PRODUCT PROCESS

The Product Innovation Charter (Pic)
• Starts within an honest situation assessment and opportunity identification
• It is a systematic way for managers to develop a new product strategy that contains the
goals for their product innovation efforts and how these efforts fit overall business
strategy.
• It involves identifying a strategic focus (which markets and which technologies will be
targeted)

The new product process

A second strategic element, the path the new product takes from idea to the time of launch and
beyond
• Having a new product process, and actually implementing it correctly, are two different
things.
The new product portfolio
In addition to a well-functioning new product process, there needs also to be an assurance that
the firm is developing the right products with respect to its product portfolio.
Important: the new product process does not usually begin with a new product idea. The process
usually begins with the amount of strategy.
 The development does not take place behind the closed doors of a research lab. The cross
functional team includes personnel from many departments, not just the product
engineers or R&D people.
 Marketing is involved very earl in the process
 Last, the process is not over when the new product is launched. It ends when the new
product is successful, usually after some in-flight corrections.

Phase 1. Opportunity Identification And Selection

The first phase is strategic in nature; successful completion of the phase yields strategic
guidance to the new products team, which guides idea generation and all remaining phases in the
new product process.
Three main streams of activity feed strategic planning for new products:
• Ongoing market planning
• Ongoing corporate planning
 • Special opportunity analysis. One or more person (in the firm or a consulting
firm) are assigned to take an inventory of the firm’s resources (people, facilities,
reputations)
 Opportunity concept
- a company skill or resource, or a customer problem (assume that skim milk drinkers tell
us they don’t like the watered look of their favorite beverage.)

The opportunities identified can be sorted into four categories:

 An underutilized resource: a bottling operation, a strong franchise with dealers, or that
manufacturing process engineering department.
 A new resource: DuPont’s discovery of Surlyn, a material with hundreds of potential
uses.
 An external mandate: The market maybe stagnant, the competition may be threatening,
or customer needs may be evolving.
 An internal mandate: Long-range planning often establish a five-year-out dollar sales
target, and new product people often must fill part of the gap between current sales and
that target. The assignments called the product innovation (and / or acquisition) gap.
Opportunity Identification – is the process of creatively recognizing such opportunities.

Phase 2. Concept Generation

Creating the new products ideas, usually called product concept.
 The problem find solve approach. Study specific group of people and finds what
problems they have
 Ideas pour in from different sources, they are reviewed to see whether they are relevant
the firm and its strategies. They are then put into the pool with the ideas that came from
problem-solving activities.

 Idea concept – the first appearance of an idea (maybe we could change the color)
 Stated concept – a form or a technology plus a clear statement of benefit

Phase 3. Concept/Project Evaluation

Before development work can begin on new ideas, they need to be evaluated, screened
sorted out. This activity, sometimes called screening or pretechnical evaluation, varies
tremendously.
full screen – these views all come together in what is often
– if the decision is to go ahead, the evaluation turns into project evaluation, where we no longer
evaluate the idea but rather the plan we propose for capitalizing on that idea.
– Firms using Quality Function Deployment see this as the first list of customer needs.
– A more common generic product description or product definition. In this book it will be
called product protocol.
– Protocol here means a kind of agreement, and it is important that there be agreement between
the various groups before extensive technical work gets under way.
 Tested concept – it has passed an end-user concept test; need is confirmed.
 Fully screened concept – it passes the test of fit with the company's situation.
 Protocol concept – a product definition that includes the intended market user, the
problem perceived, the benefits that a less watery skim milk would have to have, plus any
mandatory features.

Phase 4. Development
This is the phase during which the item acquires finite form-a tangible good or a specific
sequence of resources and activities that will perform an intangible service. It is also the phase
during which the marketing plan is sketched and gradually fleshed out.
Business practice varies immensely, but we often find the following components.
 Resource Preparation - Often overlooked by new products managers is a step.
 The Major Body of Effort – previous steps have been leading up to the actual
development of not one thing, but three-the item or service itself, the marketing plan for
it, and a business (or financial) plan that final approval will require. The product (or
concept) stream involves industrial design and bench work (goods) or systems design
(services), prototypes, product specifications, and so on. It culminates in a product that
the developers hope is finished: produced, tested, and costed out.
 Comprehensive Business Analysis - If the product is real and customers like it, some
firms make a comprehensive business analysis before moving into launch. The financial
analysis is still not firm, but it is good enough to assure management that this project will
be worthwhile. The financials will gradually be tightened during the launch phase, and
where the actual Go/No Go point is reached varies with the nature of the industry.
Approval for a new food product can be held until just before signing TV advertising
contracts, but a new chemical that requires a new manufacturing facility has to Go much
earlier, and the pharmaceutical industry really makes the Go decision when it undertakes
the 10-year, $50 million R&D research effort. The development phase is covered in Part
IV, Chapters 13 through 15.

 Prototype concept – a tentative physical product or system procedure, including features

and benefits. (A small supply of a full-bodied skim milk, ready to consume, though not
yet produced in quantity.)
  Batch concept – first full test of fit with manufacturing; it can be made. Specifications
are written stating exactly what the product is to be, including features, characteristics,
and standards.
 Process concept – the full manufacturing process is complete.
 Pilot concept – a supply of the new product, produced in quantity from a pilot production
line, enough for field testing with end users.

Phase 5. Launch
The term launch, or commercialization, has described that time or that decision when the firm
decides to market a product.
– Product teams think of launch as a phase months before and after the product is launched
including the last few weeks or month
– During the launch phase, the product team is living life true fast lane
– The critical step (if a company takes it) is the market test, a dress rehearsal to be delayed.
– Sooner or later, the preparation activities lead to a public announcement of the new product
through advertising, sales calls, and other promotional tactics.
One thing that is often overlooked at this point is the activity of planning for launch
management.
– When spacecraft are launched, a plan of tracking has been carefully prepared.
– The space control center implements the tracking plan, seeking to spot every glitch that comes
up during launch and hoping it was anticipated so that a solution is on board, ready to use.
– New products managers often do the same thing, sometimes formally but often very
informally.
 Market concept – output of the scale up process from the pilot a milk product that is
actually marketed, either for a market test or full scale launch
 Successful concept (i.e.,new product) – it meets the goal set for it at the start of the
project.

Speeding the Product to Market

Accelerated product development (APD), or spending the product to the market offers
many benefits to the firm.
Five points to accelerate time to market
  Clear product innovation charter leads to a better product design specification and lost
time due to returning to earlier phases in the process to fix errors.
 Third generation new products process permits overlapping phases or parallel
processing results in more getting accomplished in a shorter span of time; streamlined
evaluation tasks means that less time is wasted in evaluation.
 A portfolio management approach minimizes the chance that the firm’s human and
financial resources are spread too thinly over too many projects; better project selection
focuses the firm’s scarce resources and uses them more efficiently.
 A focus on quality at every phase complements the PIC; by following the adage “do it
right the first time”, the firm will avoid unnecessary recycling.
 An empowered cross-functional team that work on the project from the earliest phases,
supports parallel processing and eliminates “over-the-wall” product development.

The first three are three strategic elements, and the last two are methods that help to
implement the strategic elements.
Time to market = cycle time metric= getting the idea to shipping docks faster. It assumes that
research is already done. It also important to postship technical speed.
 Marketing can strive to accelerate premarket speed and also post announcement speed.
 It is important to create first of mindshare, to make sure people associate your brand with
a dominant position in the market.
 It is also important that the top management play a role in speeding up the products to the
market.

The firm with a mindshare on a given product category is the one that the target market
associates with the product category and that is seen as the standard for competitors to match.

Risk and Guidelines in Speeding to Market

A company speeding may be tempted to concentrate on only easy, incremental product
project or to cut critical steps in the new products process in order to get cycle time down.
– Leads to quality sacrifices, late decision that product quality is inadequate -tti product delay

The temptation to go too fast must be resisted, so that the fi rm does not mishandle a
new-to-the- world opportunity, miss out on key customer information, or develop a
technologically inferior product.
 A better way to cope when facing a high-turbulence environment is to keep product
development as flexible as possible: Do not freeze the product concept until the last
possible moment, but allow later phases in the new products process to run concurrently
with concept.
  You can also bring out a product with bugs
 Cash to cash metrics can used to measure not just how quickly the product is launched,
but also how long it takes to break even.

It is also important to do the job right the first time, seek a lot of ideas, train all involved
people, communicate, be flexible, make fast decisions and cut things wisely. The use of metrics
can help a firm to manage the whole launch phase.

What about services?

Services and goods are often arrayed on a scale of (1) pure service, (2) primarily service
and partly a good, primarily a good and partly service, and (4) pure good.
 New service process follows the same steps as new product process.
 New services take less time in development
 Services are individualized to the individual customer.
 Services are intangible, customized, about receiving the service and a human
interaction between service provider and customer.
 Customer interaction is important in service success. Getting customers
participation earl is critical to successful new service development. Important to
receive feedback to improve overall performance. services are often evaluated by
customers as the sum of their parts.
 Services are unpatentable and often easy for competitors to replicate. it is
important to ensure that the service has been "tweaked" as much as possible
before launch to make sure customers are very satisfied with the offering.
 Launch phase can be challenging

New-to-the –World Products

– The term new product can refer to new-to-the word products close-to-home extensions of
existing products or about anything in between.
– research confirms that firms that launch new-to-the world products incur to significantly lower
long-term survival rate. But lower long-term survival rate for a new-to-the world products is
offset by higher profits, since the market for such a products is often larger and can offer bigger
profits margin.
– part of the reason for the higher failure rate for a new to the world product is that they are
difficult to manage.
New to the world products is specifically important that the voice of the customer (VOC) be
brought in an early as possible, preferable at the beginning of the process.

The Role of the Senior Innovator

– The "process" followed by serial innovators is arguably not a process at all, since that implies a
series of steps and a fixed order. There are several activities that need to be done, but there is no
particular order and a lot of recycling and rethinking is necessary and expected. These steps
include:
Finding a problem that is important to customers, checking potential market size and revenue
stream.
Understanding the problem, including technology, currently available solutions, competition, and
customer requirements.
Determining if the problem is interesting to enough customers willing to pay for it, and also
interesting to the firm in terms of fitting with product strategy.
Inventing a solution to the problem and checking for customer acceptance with a prototype.
Ensuring that the product goes into development, then gaining market acceptance for the
product.
New products researcher Abbie Griffin suggests that serial innovators have five innate
characteristics one should look for:
Systems thinking (can see ways to connect disjointed information).
High creativity (though, interestingly, not exceedingly high!).
Curiosity in several areas of interest.
A knack for intuition based on expertise.
A sincere desire to solve customer problems.