New Products Management

1
New Products Management

• Part I Overview, and Opportunity
  Identification/Selection
• Chapter 1
• The Menu

2
The Excitement of Recent Winners
Figure 1-2

• Apples eMate
• Gillette MACH3
• Legos Mindstorms
• The web site
• Star Wars Episode I
• Titanic
• Amazon.com
• Beanie Babies
• Sonys Crash Bandicoot
• Dilbert
• Windows 98

• Plymouth Spyder
• Kodak digital camera
• VWs new Beetle
• Direct TV
• Ski blades
• Turbo Tax software
• GMs EV2
• Sippy cup
• John Deeres Gator
• Electronic tags
• Lincoln minivan

3
New Products

• Are crucial to successful growth and increased
  profits in many organizations.
• Innovation is important but risky.
• New products account for 28 of the companies
  growth (Booz, Allen, and Hamilton).
• 35 of revenue is from new product (less than 10
  years old).

4
What Is a New Product?
Figure 1-4

• New-to-the-World Products
• Polaroid camera, in-line skates, Kevlar,
  word-processing software
• New Category Entries
• Hewlett-Packard PCs, Hallmark gift items,
  Discover Card
• Additions to Product Lines
• line extensions or flankers
• Product Improvements
• frozen yogurt, Miller Lite, Windows 98,
  plain-paper fax
• Repositionings
• Arm Hammer baking soda

5
The Product Life Cycle

• Introduction
• Growth
• Maturity
• expand the product line
• redesign the product
• develop new products
• Decline

6
Initiating Factors

• Financial Goals
• Sales and Market Share Growth
• Competitive Actions
• Life Cycle
• Technology
• Globalization
• Regulation
• Material Costs and Availability
• Invention
• Demographic and Lifestyle Changes
• Customer Requests
• Supplier Initiatives and Reactions
• Alliances

7
Breakthrough Innovations that Changed Our Lives
Figure 1-7

• Personal Computer
• Microwave Oven
• Photocopier
• Pocket Calculator
• Fax Machine
• Birth Control Pill
• Home VCR
• Communication satellite
• Bar coding
• Integrated Circuit
• Automatic Teller

• Answering Machine
• Velcro Fastener
• Touch-Tone Telephone
• Laser Surgery
• Apollo Lunar Spacecraft
• Computer Disk Drive
• Organ Transplanting
• Fiber-Optic Systems
• Disposable Diaper
• MS-DOS
• Magnetic Resonance Imaging

8
Penalty for Failure to Innovate

• Ford
• Bowmar (calculators)
• Xerox (PC)
• Osborn (portable PC)
• Fedex (zap mail)

9
Managing the Process

• Success depends on many factors.
• Satisfying needs
• Relative advantages
• Market size
• Growth rate
• Competition
• Key notion is to understand the consumer and the
  relationship to the product.
• Sufficiently large target market.

10
The Conflicting Masters of New Products Management
Figure 1-6

• Three inputs to the new products process the
  right quality product, at the right time, and at
  the right cost.
• These conflict with each other but may have
  synergies too.
• Issue how to optimize these relationships in a
  new product situation.