6741070 Marketing Oriented Technical Product Development Program

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The Marketing OrientedTechnical ProductDevelopment ProgramJACK G. CROCKETT

Managemen-I- has had foendorse huge investmentspending programs on newproduct development toinsure market position andprofits for the future. Thisplaces a tremendous burdenupon the New Product De-partment.This article shows why theresponsibilities for commu-nicating and administeringthe technical developmentphases should be assignedto the central Marketing Re-search Department.

W ITHIN A company actively engaged in product developmentwork, the following situation mig'ht exist.All market and consumer data have been assembled and re-viewed pertaining to a new product category of current interestto the company. Once management approval has been given, theNew Product Manager takes over the assignment and in duetime contacts each department head who will be involvedEn-gineering, Accounting, Research and Development, and so on.In his discussion with the Research and Development Manager,he conveys what management wants in the product. Out of thesemeetings comes an agreed set of specifications. Following sim-ilar meetings with other departments, the New Product Managerthen coordinates all phases, including R & D, leaving the oper-ating details to each participating department.The R & D Manager then assigns the pi*oject to the appropri-ate laboratory, which in turn establishes the work schedule con-

sidered necessary to achieve success within the given time.Figure 1 illustrates this line of communication between the NewProduct M anager and the R & D Manager, and the subsequentcommunication and direct line of authority between headquartersR & D and the laboratory.The laboratory's direction from the main office has been inthe form of general specifications. Ini tial experim entation isthen done in a number of directions, to make sure "all bases arecovered." For example, work migh t be done concurrently on adry powder, a liquid form, and a dehyd rated product. Thesevariations are then evaluated, screened, reworked, re-evaluated,and so on.Eventually, final variations are selected for consumer testing

by the company's Marketing Research Dep artment. The test isthen run as planned, and results come back with a rather horri-fying answerthe product is rejected by the consumer panel.The next move is quite obviousback to the laboratory but thistime with more specific direction from the consumer viewpoint-more work, more experiments.W hat are the implications of this brief illustration ?1. There was a considerable investment in time, without pro-ductive results, and with further delays weakening anystrategic position the company may have had when itbegan to develop the product.2. The added costs of going back to rework the program couldpush expenditures over those funds budgeted for theproject.3. W hat happened refiects unfavorably upon R & D's ab ilityto develop the right type of product.


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The Marketing Oriented Technical Product Development Program 43Lines of Communication

How can the situation be eased? How can thelaboratory be more productive? How can we mini-mize time requirements on the projects? How canthe exceedingly high cost of development work bereduced?There is a simple -Answerbetter planningandbetter planning is possible by improving the com-munication and coordination procedures as theypertain to the development of new products.

This does not imply that the New Product De-partm ent is functioning inadequately in its role ofcoordinating the overall projectthat is, preparingthe complete marketing, plan, establishing payoutperiod, and so on. There is a suggestion, however,that the range of coordinating responsibilities isusually .so broad in scope that there is seldom anyprovision for working in great depth in any onespecific area, particularly in tbe vitally importantone of technical product development.The desired improved procedures for which weare asking must take the form of a more direct andcontinuous relationship among those most inti-mately concerned with the product: managementpeople, consumers, and E & D people (including thelaboratory).In other words, it would be ideal if the laboratorytechnician could deal directly with top managementto determine the precise direction for product de-velopment work. The technician would also need

the same face-to-face contact with the product'suser to determine specifications that are orientedto consumer wants and usage patte rns. He alsowould want to go back to the consumer in the earlystages of developmental work to verify that he ismoving in the correct direction.While this elimination of all intermediate levelsof discussion and correspondence would certainlygo a long way toward correcting areas of misin-terpretatio n, this is impractical. The next bestsolution would be to simplify the lines of com-munication to as much a direct one as is possible.This can be accomplished by utilizing, a singlecoordinating department, already in existence inmost companies. At most, the re would have to besome slight modification of the organizational struc-ture and a redefining of the areas of responsibility.

Use of Marketing Research DepartmentThe responsibility for coordinating and communi-cating- all information pertaining to product de-velopment should be given to the corporate or cen-tralized Marketing Research Department.This does not convey any truly earth-shatteringconcepts, for the numerous contributions by market-

ing research in the new products area are knownto most marketing people: for example, the assem-bling of data from both primary and secondary

Vice Pres.Marketing

NewProducta

Vice Prea.Manufacturing

MarketingEe search

Specialist

Researchelopnient Der-

SupervisorConB/Product

Research

LaboratoryDirector

PrajeotSupervlaor

*of authority and camminioation

- llnea of connnmication onlyFIGURE 1. Organization cha rt showing existinglines, of authority and communication.

sources and their analysis in terms of new productopportunities; the use of advanced techniques inproviding guidance on the consumer's susceptibilityto a product before it is developed; consumer prod-uct testing to measure acceptance.The intent, therefore, is not merely to advocatebetter ways of doing the above activities, but ratherto suggest supplementing these by having market-ing research work more directly with the labora-tories and on a continuing basis during all stagesof the product development work.Advantages

There are several advantages:1. Marketing research has the closest communi-cation with consumers and, therefore, knows moreabout their likes and dislikes, idiosyncrasies, andso on, than any other group in the company. Thisfirsthand knowledge can be conveyed directly to

ABOUT THE AUTHO R. Jack &.Crocltetf is Manager, Marketing Re-search Department, the Nestle Co.,Inc., W hite Plains, New York. He ispresently on one year's leave from hisposition to attend the advanced Man-agement School, I.M.E.D.E. (Institut pourI'Etude des Methodes de Direction deI'Entreprise), Lausanne, Switzerland. ^ ^ ^

A graduate of the University of Pitts- ^ Hburgh, Mr. Crockett also holds anM.S. degree in Marketing Research from Colum bia University.


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44 Journal of Marketing, July, 1962the technical people, as they attempt to orient theproduct to the market.2. The department reports directly to some as-pects of top managementthe Vice President ofMarketing, the Executive Vice President, or Pres-ident> and these are the people with overall re-sponsibility for providing new product direction.3. The personnel are trained and experienced inthe use of more advanced techniques of design andanalysis, much more so than any other marketinggroup in the company. These cha racte ristics wouldencourage a closer working relationship with lab-oratory people of similar aptitudes.

4. The forte of the marketing research peopleis their objective, systematic approach to analyzingand interpreting data. These aspects are vital inproviding a direction for product work and in eval-uating progress at the laboratory.5. The department is, in itself, a coordinatingunit within the marketing function, acting as thelink between the consumer and marketing manage-ment. This additional activity would merely extendthe coordinating function into other areas withinthe company, where a knowledge of the consumer isof importance.

Five FunctionsThere are five specific functions to be performedby the Marketing Research Department, in orderto bring about a market-oriented program that goes

beyond the concept stage and actually works.1. Assist marketing managem ent in planningproduct research programs.The Marketing Research Department's continu-ous analyses and investigations of consumers andmarkets put it in an ideal position to spot trends,determine new product opportunities, and planchanges in existing products as competitive needswarrant.2. Define specific profiles of the new productsbased upon consumer and market data.All available data would be studied to defineusage patterns, awareness levels, needs and atti-tudes, so that the product specifications could beclosely attuned to the consumer. When none isavailable, marketing research would have the op-portunity to recommend and execute the properprogram of assembling this information. All thiswork, of course, would be done prior to the assign-ment being given to the Research and Developmentpeople.3. Work directly w ith the laboratory in planningthe project from the viewpoint of what stages ofdevelopment to measure and evaluate progress.After the Research and Development Managerhas programed the work with the laboratory,marketing research would help to establish the

detailed work schedules. The prim ary concernwould be to pre-select those various stages of de-velopment that could require some form of meas-urement and evaluation.This third function is clearly the "nuts and bolts"of the proposed approach, for it is the face-to-facecontacts that would produce a workable relation-ship with the laboratory. Needless to say, theconstant reminder coming from the consumer-oriented marketing research people would go along way toward getting these non-marketing peo-ple to think from this viewpoint.4. Establish properly designed techniques forevaluating laboratory progress and administer theoverall measurement prog ram.This would utilize all known methods of experi-mental design, controlled-panel testing, and in in-home usage techniques. The work would be ad-ministered at both the laboratory level and throughthe centralized marketing research function, withfinal choice depending upon the stage of develop-ment.5. Analyze and interpret all testing data.All information accumulated from the labora-tories' testing procedures would be analyzed andinterpreted by mark eting research personnel. Thepurpose, of course, would be to interpret the datafrom the raarketing and consumer viewpoint, notjust from the technical viewpoint.

Authority and RelationshipsTo bridge the gap between the main office andthe laboratory, it would be extremely importantthat a trained research analyst be placed on loca-tion at the laboratory, to provide the necessary serv-ice to the technicians on an as-needed basis. Heshould command respect and be able to stand byhis convictions, regardless of possible pressures.This analyst would be responsible for administer-ing the laboratory testing program in accordancewith tbe policies established by the centralizedMarketing Research Depa rtment. While his rang eof activity would be specifically defined, there should

be sufiicient latitude to enable him to exercise con-siderable judgment in the selection of test designsand analytical approaches. Overall responsibilityfor the entire program, of course, would fall on theMarketing Research Manager.This analyst would be an employee oi thelaboratory, reporting directly to its administrativehead. The relationship with the main office M arket-ing Research Department -would be an indirect one,limited strictly to functional matters and nothingelse. This means an exchange of ideas, reviewingof analysis and interpretation, etc., but with noadministrative authority implied.In addition to this functional relationship, theM;\rkeiing Research Manager (or appropriate sup-


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The Marketing Oriented Technical Product Development Program 45

vice Prea.Uarketlng

Vioe Fres.Manufaoturing

Se wProd-uots

ManagerUaricetlngResearchManagerResearch i Dov-elopment

SpecialistSupervisor/

LaboratoryDireotor

Reaearohinalyat P r o J e o ESuperriaar

n I_ _ - Lines of au tho rity and communication^^ - Lines of canmunioatlon on^4 _ ^ - Line of functicmal authority and commmicatioiiFIGURE 2. Organization chart showingproposed changes in relationships.

ervisor) would also deal with other main officedepartm ents. Most frequently this would be theK & D Department and the New Product Depart-ment, as consumer and market data are communi-cated to them for the purposes of defining andevaluating new products.Figure 2 illustrates the positioning of this an-alyst within the laboratory's organization and thenecessary lines of communication, direct and func-tional authority, necessary to implement the pro-gram.

Three Control DevicesWith the authority and responsibility would gothe means of controlling the program, particularly

since it is based on functional rather than directadm inistrative concepts. The means by which thiscontrol can be exercised are threefold.1. Establish procedures for initiating and plan-ning assignments, designed to m easure the labora-tory's prog ress on projects.A project request form, request for research, orsome other sim ilar procedure would suffice. Mostestablished departments already utilize some suchdevice, and so its use would merely be extended intothis new area. As a new project is scheduled atthe laboratory, the request would be completed by

its Research Director and forwarded to the Market-ing Research Manager at headquarters, with a copygoing directly to the analyst at the laboratory. In

addition to initiating the project, the form wouldprovide a place to state the necessary backgroundinformation, time requirements, etc., so that thetesting methods could be realistically planned.2. Establish the necessary proced^ires regardingtesting techniques and controls to measure against.A study plan device would be one way of doingthis. In many companies, departments use a sim-ilar method to plan out their individual projectsinternally.When the analyst at the laboratory would receivehis copy of the request form just described, hewould be guided by it in developing an overall planfor measuring progress of the project, coveringstages of testin g, techniques to use, time and moneyrequirem ents, etc. This would be reviewed anddiscussed with tbe person responsible for this workin the centralized research department, and when

approved, "generalized" in layman terms as theoverall proposed method of evaluating the specificlaboratory's project. This would then be approvedby appropriate department heads (probably Market-ing Research and R & D), and the analyst wouldhave his direction for administering the assign-ment.A second requirement is to develop standardoperating procedures on testing techniques, so thatthe analyst at the laboratory can operate success-fully within these prescribed policies in fitting thenecessary measurement devices to the specific prob-lem. For example, in tes ting for preference ofone product over another, the test would almostalways be preceded by some form of evaluation, tomake sure there are enough differences to justifya preference test. While a number of techniquesare available, the specific one to use could be leftto the discretion of tbe analyst.S. Maintain control over the m onies budgeted forconsumer evaluation of products at all stages oftesting.In companies where the entire marketing, re-search budget is centralized within the MarketingResearch Department, it would need to be enlarged

only slightly to cover the expended activity.In other companies where the department has nomarketing research services budget, the MarketingResearch and R & D Managers would develop thebudget jointly, determining amounts of R & Dmoney that would be required to assess the variedprojects over the coming year; and then the Market-ing Research Department would be responsible forcontrolling the budget.Three Steps

The objective, of course, is to obtain a true evalu-ation of the laboratory's progress during early de-velopment stages, and also to measure the ultimate


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46 Journal of Marketing, July, 1962user's reactions to the product as quickly as possi-ble before subsequent efforts are expended by thelaboratory at final refinements.

Three clearly-defined steps will cover most situ-ations.1. Initial evaluation hy 'panel of experts. Thisprocedure, when carefully designed and controlled,will produce a valid, objective measurement of whatthe laboratory experts themselves think about therange of new product variations they have devel-oped. Note tha t the evaluation at this stage isprimarily for screening purposes, and in no wayis to be taken as a measurement of preference bythese experts. The only objective is to please theperson who buysthe consumer.2. Initial consumer acceptance testing. Thescreened products are then tested among smallpanels of consumers, usually ranging in sizes from

25 to 100. At this stage th ere is not so much in-terest in obtaining a representative reaction, but

rath er a directional one. The results of this testing,step are then analyzed and interpreted in the lightof how the experts evaluated the same products.As refinements are indicated, a new cycle of de-velopment is completed until the "ultimate" in thisproduct has been achieved. The product is thenready for a final large-scale test, to confirm thatit really is as good as the small panels indicated.3. Final in-home test. The final large-scale testis usually carried out under as near normal con-ditions as can be duplicated. They are large enoughin scope to measure sectional differences that mayoccur, as well as an analysis by major brand-usingfamilies.The views expressed in this article are based uponthe principle of direct coordination and communica-tion as the key to better planning . The need is to

expand marketing research functions, by extendingresponsibilities into a nonmarketing area.

^MARKETING MEMOSales Control and Automation , . .

Probably at this very moment some outwardly successful, in-telligent, and competent vice-president in charge of sales for anationally known and respectfully regarded organization is ad-dressing the dignified meeting of a business management group.He is telling the attentive assemblage all about the greater efii-ciency, control, and coordination obtained with the use of elec-tronic computers and recorders for charting the individualsalesman 's activity . He is describing , eloquently and fervently,the brilliance and economy of this latest manifestation of man-age rial sagacity . Instead of the old-time sales repo rt, his chargesnow record every movement of their peripatetic migrations onarticulated cards which are consumed and digested by the busi-ness machines at the home office. The verdicts rendered by theawesome electronic marvels are unassailable, unchallengeable,and beyond reproach. Truly, a modern Oracle of Delphi intes-tined with diodes.

The pathetic but realistic truth is that every word this vice-president in charge of sales utters, each pious statistic he cites,the conclusions he offersall are apocryphal drivel, as meaning-less as a politician's platitudes, utterly devoid of sense or truth.No, the m achine has not lied to him. The electronic creation,with its transistorized arithmetic, functions perfectly, but it hasbeen betrayed by a diet of falsificationthe cards. The cardsrepresent not the truth, but sincere men's ability to triumphover well-oiled machinery.Frederick Pederson, "You Can't Con-trol Salesmen," Industrial Marketing,Vol. 46, No. 13 (December, 1961),p. 98.


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6741070 Marketing Oriented Technical Product Development Program