Business
Administration Department
BA 347 New Products Management
Dr. Geoff Lantos Fall
2007
Additional Chapter Applications Questions (ACAQ)
At the end of each
chapter in your textbook are "Applications" discussion questions,
most of which are assigned on the syllabus for you to think about prior to
class discussion. Each application is a
question or a comment by a corporate president who is interviewing you for an
entry-level job. Having heard that you
are currently taking a course in new products management, the president asked
to be included in the interview schedule.
Each application speaks to something new products people know from
experience to be controversial or difficult for neophytes to grasp.
In fact, many of the
situations really were discussed in job interviews. At first reading, the applications might seem
rather conversational and often almost without a question. But, given that you are sitting right there
at the president’s desk and must
respond with something, there is a
challenge in every one. Most of these
questions don’t have an obvious “correct” answer, and many can be answered in
several different ways.
The Applications
questions following below no longer appear in the current edition of your textbook
but are nonetheless worth discussing and are assigned on the syllabus
(abbreviated as “ACAQ”). We will get to
as many of these in class as time permits.
We will each question covered in class in one of three ways:
·
I will role-play the part of the president
and press you for answers.
·
I will ask pairs of students to come to
the front of the classroom and in impromptu fashion role-play the student and
the president who pushes the student for an answer. Comments from class members might then be
solicited.
·
I
will ask all students to pair up.
Together, they will draft an answer. One or two pairs will then either be picked or
volunteer to share their sets of responses with the class, who in turn will
respond to them.
W
9/12 1.“I found it very interesting that
your professor wants the new product project to end only when it achieves the
success expected of it. As the person
giving them the money for that project, I sure agree. But, that means the marketing people are sort
of carrying the ball for the technical people.
You know, technical made it and the sales force sells it. If the sales and marketing people fail to do
their jobs, the technical people go down the drain with them. That doesn’t sound right, somehow.”
2. “What gets me are all of these socially motivated people who seem
to feel we’d be better off in this world if we had fewer new products. Haven’t they ever enjoyed TV? Haven’t drugs ever helped them when they were
sick? What could possibly motivate them
to come down against product innovation?”
M
9/17 3. “Perhaps that professor who
wrote your book feels new products fail because there is no need for them or
because they fail to meet peoples’ needs, but in my experience the cause is
pure and simple incompetence on the part of the individual managers. I could eliminate failures completely if I
could just eliminate incompetence. I’ll
bet you agree.”
W 9/19 4 “You were telling me a moment ago about a
three-pronged development process for new
products (technical, marketing,
and evaluation). Well, I disagree. We develop a new
product first; we have to. When we know what the product will be, then we can estimate
its costs, prepare advertising
for it, and so on. We simply couldn’t do
all of these things at
one time.”
W
9/26 5. “You’ve got me confused on one
thing. First we need an opportunity, and
then we need company skills to match the opportunity. But, you then said I need to have a strategy
to guide me in looking for good opportunities.
I was lost at that point, but then you added that the skills we have are
a key input to strategy. A process like
that will keep staffers in their jobs for years, like dogs chasing their
tails.”
M, 10/1 6. “We’re a large corporation, with many businesses. So I can’t really get a handle on this platform idea. Good concept, maybe, but not very operational. Several years ago, I spelled out seven cardinal guidelines foe all new product work in the firm. I suppose each Group Executive VP’s platform would add some to that, and then each Division management group would have its platform. If you carry that down to the operating units, and marketing groups, there might be 25 drivers laid on any poor new products group before it even did its own thinking! Is that what you think really happens?”
M 10/1 7.
“I didn’t like what you said a minute ago about that internal mandate. Well, the implication is that you new
products people study markets and technical skills, make rational decisions,
and come up with sound strategy, while presidents just shoot from the hip with
a “Do this” or “Do that.” Is that what
you really mean?”
W
10/17 8.
“Now that you have studied the legal situation on outside ideas, you
might be able to help me with a problem our foods division has. We’re being sued by a lady in
9.
“Heard recently about a man named Frederick G.
Gosman who invented a parlor game
board
featuring Christmas. He found that we
had Monopoly-type board games on many
subjects
but none on Christmas. Unfortunately,
the industry didn’t like the idea at all,
so
he had some made up, ordered 25,000, and he has now produced another 30,000.
Tell
me, why did his approach work? Why does
that industry accept so few ideas from
inventors? Cadaco, for example, gets 8 to 10 suggestions
every day and has accepted
just
1 idea from over 6,000 received in recent years. Other firms have about the same
experience.”
W 10/24 10 "Our electronics division has become increasingly interested in the home as a market for new products. Recently, I read where some experts are forecasting that the average home is in for some fantastic changes in the years ahead--using the computer to order merchandise and plan menus, playing chess and checkers as well as other games on the computer, writing 'letters' to people who also own computers, and so on. They say we'll have home repair instructions stored on disks and there will be new synthetic foods, creative garbage disposal systems, and so on. Could you show me how that scenario might be used to create ideas for new electronic devices in the home--that is, new ones not already available or described in the scenario?"
M 10/29` 11.
“One of our divisions, the result of an acquisition, runs a chain of car
washes in the
W 10/31 12. “Thanks for telling me about some of those analytical attribute analysis methods you’ve been studying. I must confess, however, I’m slightly confused by the terminology. Wish fewer experts had been at work here. But, tell me, what is the difference again between dimensional analysis and the checklist method? Seems to me they are essentially the same.”
M 11/5 13. “I find your conjoint analysis example very interesting and relevant in my line of work. Will you go over again how you calculated those rankings as estimated by the model that you showed in Figure 7.2? Also, it’s clear that the medium-thick, mild salsas came out number 1 and 2 for this individual. But what are we to make of the intermediate ranks? Medium-thick, medium-hot, red came in eighth, while extra-thick, mild, green ranked ninth. Should I care about this? Does that help me in product planning?”
M 11/19 14. “I read a fascinating story recently about the development of a Hanes product called Underalls. It seems that Hanes had this idea of eliminating the need for panties by adding material to pantyhose. The new pantyhose would offer the wearer several advantages, and the new product manager was worried about how it should be positioned. So, they tested four positionings:
a. Appearance—the elimination of panty lines under slacks and dresses.
b. Comfort—due to fewer layers of clothing.
c. Economy—because there would be no need to buy panties.
d. Logic—no need to wear panties.
The first one won, convincingly, so that’s how the product was marketed, and you probably know that they were very successful. But, my gosh, how in the world would you be able to test those positionings? It’s a new concept, many people would resist talking about panties to strangers, and folks probably wouldn’t even take the thing seriously. You have any ideas about how they might have tested that set of positionings?”
W
11/28 15. “In late 1981, the Dow Jones people announced
that they had canceled their plans for The
Wall Street Journal Magazine. They
had spent over a year in planning, but when they showed prototype copies of the
new publication to test readers, the readers were somewhat short on
enthusiasm. They wanted more information
on personal finance and several other areas that the firm had been planning to
handle in their regular publications like The
Wall Street Journal and Barron’s. Couldn’t something have been done to find
this out earlier and save that year of very expensive planning? They’re currently thinking of reactivating
this magazine idea for one or more of the strong independent Asian economies,
perhaps
16. "I keep hearing arguments between our
technical R&D staffs and their counterparts in the marketing
departments. Seems as though a lot of
them don't get along too well, and this doesn't surprise me too much. Some of the best companies admit to this
problem, no matter what the experts say.
But what I can't understand is why these disputes seem to crop up so
often in some of our divisions and so rarely in others. Can you help me on that?"
M 12/3 17. “We recently acquired a small toy company, and I’m scheduled to meet with their management next week. I know they really don’t much use testing—I think someone told me they have a bunch of kids come to their plant and play with proposed toys. Must work for them, we paid a huge multiple for their stock. What should I tell them, or be looking for, relative to your thirteen product use testing decisions?”
W 12/51 18. “One of our better divisions is in the publishing business. Among their products is a line of posters sold through college campus outlets. I was chatting with them recently about market testing, and they said they don’t do any of it on posters! Would you like to guess hat they said were the reasons for this policy?
19. “One of our corporate marketing researchers the other day was trying to explain how we should forecast sales for new products. She said they were recently working with the small-appliance division and learned that managers were doing something like this: homes with a need x percent of families with incomes over $40,000 x percent remembering that they saw our new product ads in an advertising pre-test (one that was run in a doctor’s office with fake magazines). She said that was a weird one, and she wanted to run a seminar to tell everyone that the calculation method should be the traditional one of Awareness x trial x Repeat. Should I allocate the money for that seminar?”
20. “Another firm skipped test markets, back in 1977. The product was Real cigarettes, and the company was R. J. Reynolds. The firm said the cigarette was so promising that they didn’t need to spend time in test markets. They spent $40 million on advertising and promotion, the most ever on a new brand at that time. They used 130 boxcars of display materials and 25 million sample packs. Three years later the product had a tiny share of market, and rumors were that the product would be dropped. My question is this: couldn’t that product have been taken through one of the other types of market testing? Even if test markets were deemed too expensive and time consuming, couldn’t cigarettes be tested by controlled sale methods or in simulated test markets?”
M 12/10 21. A number of years ago I was in the food
specialties business, and I can recall a New Cookery line marketed by Nestle;
it was greatly talked abut at the time.
Well, the line didn’t work out in test market quite as well as
expected. In fact, it was soon withdrawn
with no plans announced for the future.
Seems as though retailers complained the products in the new line were
often priced higher than competitive products.
Some said the items lacked a clear-cut reason for being because,
although advertised as low calorie, the ketchup product, for example, was only
marginally lower in calories than Heinz or Del Monte ketchup. Other comments were, ‘People here aren’t
thinking much about diet and health when they’re shopping’ and ‘ The concept was too esoteric and
incomprehensible to the ordinary consumer.’
Now maybe the line was just a few years ahead of its time, but it came
from a fine firm, and the advertising was by one of the biggest and mot
successful advertising agencies. Just
how could such a disappointment come about?”
22. “I love a
good competitive battle, so I was intrigued a couple of years ago when S.S.
Johnson went directly national (without a test market or a rollout) with a
product called Complete (furniture polish).
What was interesting was that Texise was then in test market with a
similar product called Wood*Plus. Why do
you suppose a fine, successful firm like S.C. Johnson would take a major risk
like that?”
23. I get a kick out of how scientific market
researchers can become, with their careful samples, balanced quotas, etc. But a conference in
24.
“I am personally familiar with the United Airlines shuttle situation you
mentioned, but I didn’t know they rolled it out first to us frequent flyer
types. That was very clever. Yet, what happens when they grab a foothold
with the frequent flyers and they want to move to another group of flyers—do
they have to change their advertising copy, all of their posters and signs in
the shuttle area, etc? They all point
clearly to frequent flyers”
25. ”I was talking
just the other day about our most recent acquisition—a chain of four large
general hospitals on the West Coast.
These are private hospitals, and we fully intend them to be profitable,
but it is a service, I guess, and there are some public service overtones in
the deal, whether we wanrt them there or not.
My concern, as we talk about evaluating new products, is how would this
division go about evaluating new service proposals? The same as our product divisions? If so, which product divisions would be the
best model?”
F, 12/8 22. “In my position I get to see lots of control
reports, especially the monthly reports most of
the better divisions put out on
new product projects. I’m always sort of
intrigued by these
forms because they’re so
simple—rarely with more than a dozen key facts on them. Now, I happen to know that hundreds of
things could be reported on—so how do they choose just the 12 or so that they
use?”
23. “I like the way you keep
referring to yourself as a new products person, not a marketer. Our marketers sometimes have trouble winning
the confidence of other managers. I am
thinking particularly of the troubles they have getting the support of the
financial people and legal people for their new product programs. It seems to me sometimes they focus too much
on their sales plans, their advertising, and their trade shows. Finance and legal aren’t shown what they can do to help a launch. Oh, I know about general job lists, and how a
budget is due at a given time, and how legal appproval of advertising is
scheduled. But I mean really help, play
a positive role, be a member of the team, and so on. What could you suggest?”
24. “Product iinovation in some of our divisions
is so unreliable that it is almost embarrasing.
I recently said to the division general manager that he had surely heard
of managerial control, and I asked him why he didn’t use more of it. He answered, ‘Controlling our new product
development is a lot like controlling a symphony orchestra.’ What in the world did he mean by that?”
25. “Something another division general manager said
also has me bothered. She’s in the
sporting goods business and is doing an above-average job, but she seems to
have trouble getting her new items into the stores in time for their seasons. So I suggested she look into the matter of
control systems, but she said, ‘All the fancy conrtol charts, the CPM systems,
and so forth, won’t make for efficient product development unless the people
involved want the system to be efficient.
Give me the right people and I won’t need all those things. But give me the wrong people and gimmicks
won’t make them efficient.’ How would
you suggest I answer her?’
26. “In the material we were looking at earlier
on new products management, I noticed a strange chart that showed that
marketing planning began before the project got started. How can that be? Also, the chart showed that ‘preparing the
product’ went on after the item was launched.
I presume that was because someone wasn’t doing the job right. You sure that chart is correct?”
27.
“I didn’t fully understand a while ago when you were telling me the difference
between predictive tracking and non-predictive tracking. Can you go ver that again, and then tell me
when a team uses one and when the other?
I don’t suppose there is any new product case where you would use some
of both? Predictive is better, isn’t
it? The one to use if it can be used?”