1. The New Product
Process
Chapter 3

2. THE NEW PRODUCTS
PROCESS

4. What is New Product Process?
• The next product in a company’s
product line a design team goes
through product development process
steps.
• A product that adopts or replaces an
existing product.
• An old product package in a different
way.

5. STRATEGIC
PLANNING

6. Is an organizations process of defining
its strategy, or direction, and
making decisions on allocating its
resources to pursue this strategy.

7. A successful Strategic Planning process should:
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Describe the organization's mission, vision and fundamental values
Target potential business arenas and explore each market for emerging threats and
opportunities
Understand the current and future priorities of targeted customer segments
Analyze the company's strengths and weaknesses relative to competitors and
determine which elements of the value chain the company should make versus
buy
Identify and evaluate alternative strategies
Develop an advantageous business model that will profitably differentiate the
company from its competitors
Define stakeholder expectations and establish clear and compelling objectives for
the business
Prepare programs, policies, and plans to implement the strategy
Establish supportive organizational structures, decision processes, information and
control systems, and hiring and training systems
Allocate resources to develop critical capabilities
Plan for and respond to contingencies or environmental changes
Monitor performance

9. Three main streams of activity feed
strategic planning.
1. Ongoing marketing
2. Ongoing corporate planning
3. Special opportunity analysis

10. They sort into four categories:
Underutilized resources
New resources
External mandate
Internal mandate

11. Concept Generation
the act by which new concepts, or ideas are
created. Also the definition of the second
phase of the overall product innovation
process, during which the concepts are
created sometimes called idea generation or
ideation.

12. Pretechnical Evaluation
sometimes called screening
It is the stage when the ideas that
came from
the conception generation activity are
evaluated.

13. Technical 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.

14. Commercialization
Has described that the time or that
decision where the firm decides to
market a product.
-should not mean the GO in a GO/NoGo
decision.
-the commercialization phase, for
some
products, is life in a pressure cooker.

15. Launch
The debut of a product into the
market. The product launch
signifies the point at which
consumers first have access to a
new product.

16. The Process Should Meet the Condition of
the 13 Key Concepts Given in Chapter 2
• When a process is failing to produce, we
usually find that one or more (often several) of
the key concepts have been lost.
• Another of the 13 key concepts forces
managers to be aware that they are
developing three things, not just one. Making
the middle stream of activity (evaluation)
mandatory automatically forces the team to
deal with the three primary causes of new
product failure: need, meeting need, and
marketing.

17. Why do new products fail?
They say
Inadequate budget
Lacked top
management support
Didn’t involve customer
They mean
No need or
want
Exceptions come
with exogenous
factors:
competition,
government,
economy
And scores of
others
Product didn’t
meet the need
net
+
Not well
marketed
+
Moral: Control on accomplishment, not action

18. • The last of the 13 key concepts, called
continuous new product process
development, means that we have to
measure the productivity of the process we
are using.
• Measuring performance requires preset
management guidelines, usually called
metrics, so now those who develop new
processes must spell out exactly what that
process is to produce, when, how much, etc.
No more of this ―developing the process on
the run.‖ unless, of course an emergency
demands it.

19. The Process should provide some
structure of checkpoints along its way
• Stage gates- points where a stage of
activity ends and process
Example
Before technical development begins full
force, we like to have assurance from the
intended end user (and that person’s or
firm’s network of advisors) that what we
intend to develop will indeed meet needs
they have.

20. • The stage gate should not
be a toll gate, where
everyone stops while some
authority on high is
appealed to, makes some
ruling, and then allows
work to resume.
• The first stage in most
processes is strategic
planning—opportunity
identification and
evaluation, combined with
a statement how that
opportunity will be used.
• The end point is a strategy,
and in this book is called a
product innovation charter.

21. Strategic Planning Stage
Product Innovation charter
Concept Generation Stage
Pool of interesting concepts
Pretechnical Evaluation Stage
Concepts screens well and has definition
Technical Development Stage
Financial assurance
Commercialization Stage
Success

22. • Some people have called stage
gates info-gates. Some people
called them
accomplishments, or popular
today, deliverables

23. The Process should allow the Team
and Its support group substantial
degrees of freedom
• Empowerment can loosen up the stage
gates, but there are many other ways team
can be hobbled. Remember that a new
products team is a horizontal form of
management. Creating new products takes us
across all function, thus risking conflict with
all of the chimney’s or silos--- the
functions, such as marketing and
manufacturing. Each of the function (and not
just the big ones) has its own rules or method
of operation, sometimes call paradigms. Each
is apt to be headed by a power player.

24. The New Product Process must be
flexible to changing conditions
Change can be expected in
what the customers wants,
how competitors might
respond and the new
technologies being applied in
the product.

25. The New Product Process must
deal with especially critical points in
the development
Moments of truth
The customer and organization come into contact
with one another in a manner that gives the
customer to either change an impression about
the firm.

26. The New Product Process should
integrate the team with the rest of
the firm and the rest of the world

27. The New Product Process should
permit a smooth launch
A successful new
product launch takes
research, planning
and a skilled and
knowledgeable
marketing team.

28. The New Product Process should
provide organization learning
Organizational learning is an area
of knowledge within
organizational theory that
studies models and theories
about the way an organization
learns and adapts

29. Implication for Aspiring New
Product Managers
• Be multifunctional – have experience in more than one function
• Be risk takers – willing to do whatever is necessary to bring a
product to market
• Be general manager types – more interested in managing than
doing
• Be a combination of optimist, realist; aggressor and team
player, leader and follower
• Have a strong creative bent to achieve better product
characteristics and to carve out new ways of doing things
• Be comfortable in environments where chaos and confusion
seem to reign. Be able to work with depressives, euphorics,
and those with no emotion at all