8. Planning for New Product

5/18/2018 8. Planning for New Product

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CRAVENSCRAVENS

PIERCYPIERCY

8/e8/eMcGraw-Hill/Irwin 2006 The McGraw-Hill Companies, Inc., All


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Chapter Eight

Planning forNew Products

McGraw-Hill/Irwin 2006 The McGraw-Hill Companies, Inc., All


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Planning for NewProducts

The InnovationMandate


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PLANNING FOR

NEW PROD !"

Importance of New Products

Customer Driven Process

Steps in New Product Planning Idea Generation

Screening/Evaluating/andBusiness Analysis

Product and ProcessDevelopment

ar!eting Strategy and ar!et

"esting Commerciali#ation

$ariation in t%e Generic Planning

Process


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I#portance of

New Products

Innovation at top of potentialvalue drivers &Ernst ' (oung)

Innovation initiatives extendbeyond new goods and servicesto include ideas, processes, and

business practices

*rgani#ations must +uild a

culture of innovation


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New Product

Planning as a

usto#er Dri$en

Process New productclassifications,

-. Newness to mar!et

. Newness to company

New product types,

"ransformational

innovations New product category

Product line e0tensions

Incremental improvements


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1ig%

2ow

New product

lines

20%

Improvements/

revisions to

existing

products

26%

Additions

to existing

product lines

26%

Repositionings

7%

Cost

reduction

s

11%

Newtoworld

products

10%

1ig%

Newness to market

New

ne

ssto

com

p

an

y

!i"e o# circle denotes num$er o# introductions reltive to totl&

Source: New Product Management for the 1980s, Booz Allen & am!lton "nc# 198$#


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Customer value analysis

*+3ective is to identifyneeds for,

-. New products. Improvements to e0isting

products

4. Improvements inproduction processes

5. Improvements insupporting services

Finding usto#er

%alue Opportunities


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atc%ing Capa+ilities to

Customer $alue *pportunities

6it +etween capa+ilities and

product offering

"ransformational Innovations

7new8to8t%e8world9 ideas

Customers not always t%e

+est guides


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CustomerE0pectations

Customer

SatisfactionGap

ActualProduct

Performance

OPPORTUNITIE

!"# New Products!$# Improvements

!%# New and Improv Processes


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haracteristics of

"uccessful

Inno$ations

S":A"EGIC

INI"IA"I$ES

&reating anInnovative

&ulture

'everaging&apa(ilities

electing thRight

Innovationtrategy

)eveloping and

ImplementingE*ective New

ProductProcesses

Making

Resource&ommitments


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)eveloping anInnovation &ulture Innovation +orkshop for

top e,ecutives todevelop

an innovation plan-

Innovation tatementhighlighting o(.ectives and

senior management/srole and responsi(ilities-

Training programs foremployees and managers-

&ommunicate the priority

of innovation- peakers to e,poseemployees to innovationauthorities-

Source: %homas # 'uczmars(! et al#, )%he Brea(through M!ndset,* Mar(et!ng Management,March+Ar!l $00-, .-#


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!he Inno$ation "trateg&

"pells Out

'anage#ent(s Priorities

for New Product

Opportunities

"- et speci0c New ProductO(.ectives-

$- &ommunicate the role ofNew Products throughoutthe organi1ation-

%- )e0ne the areas ofstrategic focus2

Product copeMarketsTechnologies

3- Include longer termdiscontinuous pro.ects inthe portfolio along withincremental pro.ects-

Source: /oert ooer, )Benchmar(!ng New Product Performance,* 2uroean Management 3ournal, 1998, 156#


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CustomerNeeds

Analysis

CustomerNeeds

Analysis

BusinessAnalysis

BusinessAnalysis

Screeningand

Evaluation

Screeningand

Evaluation

IdeaGeneration

IdeaGeneration

ar!etingStrategy

Development

ar!etingStrategy

Development

ProductDevelopment

ProductDevelopment

"esting

"esting

Commerciali#ation

Commerciali#ation

NE+ PRO)U&TP'4NNIN5 PRO&E


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4chieving &ross67unctional

Interaction and&oordination

R 8 )

Operations

Marketing

7inance


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Coordination of new productactivities +y a %ig%8level generalmanager

Inter8functional coordination +y ateam of new product planningrepresentatives

Creation of a pro3ect tas! forceresponsi+le for new productplanning

Designation of a new productsmanager to coordinate planning+etween departments

6ormation of matri0 structure forintegration new product planningwit% +usiness functions

Creation of a permanent design

center

Responsi(ility for NewProduct Planning


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Idea searc%, targeted or open8ended;

1ow e0tensive andaggressive;


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9ENETTON/ TR4TE5:TO RE;I;E 4PP4RE'

I)E4 5ENER4TION)7e d!dnt ta(e adantage of the !ndustr;s54!at manager who assumed the ost of

ch!ef e>ecut!e of Benetton ?rou on Ma; @#%he transformat!on saw the est reta!ler

turn !nto cutt!ng5edge users of d!g!taltechnolog;# Benettons comet!tors5notal;Sa!ns ara and Swedens &M ennes &Maur!tz5hae ra!sed the ar for the ent!re

!ndustr;# %hese reta!lers can eam new st;lesfrom the catwal( to the sho oor !n less than amonth5and at arga!n r!ces# Both delo;soh!st!cated technolog; to trac( wh!ch !temsare sell!ng and wh!ch arent, so w!nners can e

seed!l; restoc(ed and slow moers ;an(eddown from the rac(s# %he;e got the loo(down, too5cool and m!n!mal for the wor(!ngwomen who loe ara, and oer5the5to trend;for &Ms teen fans# And Benettons loo(C Blan)%he Benetton rand !s out of fash!on,* sa;s

Sagra Mace!ra de /osen, reta!l anal;st at 3#P#Morgan hase & o# !n Dondon#


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assano !s out to change that# %hemessage he del!ered !n h!s Erst encounter w!tshareholders was short and owerful: Benetton!s go!ng to refocus on the aarel us!ness,wh!ch encomasses the S!sle; and Benettonrands#

"ts no secret that Benettons core casuawear us!ness has suFered neglect# "n 199.,

founder Duc!ano Benetton launched an !ll5fatedd!ers!Ecat!on !nto sorts e=u!ment, sna!ngu troh; rands such as Pr!nce Gtenn!srac(etsH, /ollerlade G!n5l!ne s(atesH, and '!llerDoo GsnowoardsH# But the strateg; founderedand last ;ear, Benetton sold the ent!re

e=u!ment d!!s!on, oo(!ng I190 m!ll!on !nwr!te5oFs# %he coman; osted !ts Erst annualloss5I10#@ m!ll!on, on reenues of I$#- m!ll!on#

9enetton/s trategyGcont!nuedH

Source: )as Benetton Stoed Jnrael!ngC* Bus!ness 7ee(, 3une -0, $00-, 6K#


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E"1*DS*6

GENE:A"INGIDEAS

DirectSearc%

2in!ing

ar!etingand "ec%nology

6acilitating2ead =serAnalysis

Creativeet%ods

National Policy

E0ploratoryCustomerStudies

Alliances/Ac>uisition/2icensing

"ec%nologicalInnovation


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IDEA GENE:A"I*N

SC:EENING&fit/feasi+ility)

C*NCEP" E$A2=A"I*N

B=SINESS ANA2(SIS

&REENIN5uired attri+utes;

$erifyclaims

Ideas forimprovement

Identify usesituations


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'AR*E!ING

"!RA!EG+ AND

'AR*E! !E"!ING

ar!eting Strategy Decisions

ar!et "argeting

Positioning Strategy

ar!et "esting *ptions

Simulated "est ar!eting

Scanner @ Based "est ar!eting

Conventional "est ar!eting

"esting Industrial Products

Selecting "est Sites

2engt% of t%e "est

E0ternal Influences


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2ess artificial t%an simulatedtesting

Costs less t%an full8scale mar!ettest

"est is controlled +y using I:Is4 panel mem+ers in eac% testcity

Ca+le "$ ena+les use of controlledad testing

"ests ta!e a+out - mont%s

Costs are F

canner6(ased TestMarketing


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O''ER IALI,A!IO

N

"%e ar!eting Plan Complete mar!eting strategy

:esponsi+ilities for e0ecution

Cross @ functional approac%

onitoring and Control

:eal @ time trac!ing

:ole of t%e Internet

Include product performancemetrics wit% performancetargets


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Market

Target!s#

MarketingProgram!s

#

O(.ectives

Marketing trategy


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"ec%nology Pus%

Processes

Platform Products

Process @ Intensive

Products

Customi#edProducts

;4RI4TION IN T=E5ENERI& NE+

PRO)U&T P'4NNIN5

Documents

8. Planning for New Product