Business Administration Department

 

BA347 New Products Management

Dr. Geoffrey Lantos                                                                                                      Fall 2007

 

CLASSROOM LECTURE/DISCUSSION OUTLINE

 

OVERVIEW: THE ORGANIZATIONAL PERSPECTIVE

 

INTRODUCTION TO BA 347

 

I.       Syllabus and related handouts:  Exam Template, Key Concepts list, Audio-Visual Presentations, Additional Chapter Applications Questions

II.      Special Class Activities/Team Oral Presentations

III.    Case Class Discussion Questions

IV.    Applications-Oriented Written Assignments, Using the Business Library

V.     Team New Product Development Process Analysis Term Paper Project

VI.    Miscellaneous Handouts and Resources: Proofreader's Marks, Classroom Lecture/discussion Outline, Overhead Transparency Packet, New Product Success/Failure Factors, Exercises 14, 16, and 36, Glossary, Websites, 18 Ideas For Becoming A Master Student, Student Information Inventories

 

OVERVIEW OF PRODUCTS AND NEW PRODUCTS

(Related reading: Preface; Chapter 1; Chapter. 16 pp. 371-373)

 

I.       The Nature of Products

·   What is a product?

·   3 levels of products = 3 product design elements:

                                       1. core (generic) product

                                         2. tangible (actual, formal) product: functional characteristics, form

                                           characteristics

                                         3. augmented (extended) product (value-added services, product

                                          support services, customer services)

                                            Audio: 2002 Mercuries # 16: Yahoo “Check Monkey”; 2005 Mercuries

                                                  “       2005 Mercuries Automated Voice Habits”                 Audio: 2005 Mercuries # 22 “Automated Voice Habits,” 2006 Mercuries #33 & 34 Bud “Genius/Mr. Backyard Bug Zapper Inventor, Mr. Electric Carving Knife Inventor’

                                                                Video: Clios 40th Pt. 2 # 51 Little Caesar’s Pizza “Training Camp”

 

II.      Classification of Products and Implications for Marketing Strategy

 

                                         all products

 


                                 consumer   business

 


                 durable    nondurable           perishable  non-perishable

 


                     convenience    shopping      specialty    unsought

 

         A.  With respect to end uses or broad market

               1.   consumer goods

               2.   business (business-to-business, organizational, industrial, producer) goods

 

          B.  With respect to tangibility and durability

               1.   nondurables (package goods, fast-moving consumer goods)

               2.   durables

                     3.   services

 

         C.   With respect to shopping habits

               1.   convenience goods

               2.   shopping goods

               3.   specialty goods

               4.   unsought goods

   .  Video: Fossil Is A Reminder of Good Times (8 min.)

III.    What is a new product? (NP)

                 .Special Class Activity: Discuss your interest in NPs.

·         Booz, Allen, & Hamilton, Inc. Classification scheme:

 


                      High

                                    New product lines (30%)                       New-to-world products (10%)

                  Newness

                     to

                    Co.           Improvements/revisions to                      Additions to existing

                                    existing products (26%)                         product lines (26%)

 

 

                     Low                                                                    Cost reductions (11%)               Repositionings (7%)

                                                                                       

                                    Low                           Newness to market                  High

 

a.       New to firm:

(1)    Familiarity externally with technological and market environments

(2)    Fit internally with company technological and marketing resources

b.       New to market:

(1)    Innovation Attributes: Product Characteristics Influencing Likelihood of Adoption

 and Diffusion

       (2) Perceived Adoption Risk Clios 40th #13 Van-Heusen Shirts “Car Wash” 

(3)    Behavioral change: discontinuous, dynamically continuous, continuous innovations

          Videos: Clios 40th #13 Van-Heusen Shirts “Car Wash”; #20 Polaroid Instant Camera “Zoo” 

Exercise 36: Categories of Innovations and Product Characteristics that Influence Adoption and Diffusion, In-Class Applications Questions 1, 2, and 4

 

·         Categories of NPs/innovations: Decreasing Risk/Return/Effort/Commitment:

      1.   New-to-the-world product (Breakthrough product, Pioneering product, Revolutionary product, “Really new” product, Radical innovation, Discontinuous innovation, Disruptive innovation, New-new product)

2.       New product line (New-to-the-firm products,  New category entry)

·         1. New markets (needs-and-wants groups)   2. Variety   3. Upgrade/downgrade

·         Brand franchise extensions

                     3.   Addition to existing product line: Product line extensions and flankers

·         Product mix and product line decisions

      4.   "New and improved" (Next-generation product) (A type of restaging)

               Improvements/revisions/enhancements/upgrades to existing products

a.       Quality modifications

b.       Functional modifications

c.       Esthetic/Form modifications

5.       Repositioning  - a. innovative positioning in an established category

       b. relaunching (remarketing, restaging, reintroduction, rebranding)

      6.   Cost reduction

               7.   Acquisitions, licensing, joint ventures (external n.p.'s)

·     Implications of NP classification

 

                .  Video: Rollerblade (8 ½ min.)

 

IV.    Special Class Activity: Classify your NP or ad for a NP according to the BAH classification scheme, and discuss the marketing and managerial implications.

 

The Nature of New Product Management

(Related reading: Chapter 14 pp. 309-318, 322-327)

 

I.                    Overview of New Products Management

               Video: 2004 Clios # 30 Bud Light “History” 

II.                 History of New Products Management

III.               The New Products Manager and New Products Management

IV.              Multifunctional/Multidisciplinary/Crossfunctional/Interfunctional Teamwork

Audio: 2002 Mercuries # 20 Mike’s Hard Lemonade “Teamwork”

V.          . End-of chapter questions: Ch. 16 #2, Ch. 1 #2, additional chapter application question (ACAQ) #1, Ch. 14 #1

 

 

OPPORTUNITIES AND PROBLEMS IN NEW PRODUCT DEVELOPMENT (NPD)

(Related Reading: None)

 

I.              Why Are New Products Developed?

. Ch. 1 #4, ACAQ #2

                       Video: Enterprise: Perfectly Frank Chicken Franks (2 ½ min.)

         .   Video: McDonald's Cooks up a Burger for Grown-up Tastes (11 min.)

 

II.      New Product Activity, and Success and Failure Rates

·         New product activity

·         Success and failure rates

 

III.    Why Is NP Marketing and Management becoming more of a Challenge?

 

AN OVERVIEW OF SUCCESS/FAILURE (S/F) FACTORS

FOR NEW PRODUCT DEVELOPMENT

(Related Reading: Chapter 14 pp. 303-309; pp. 317-322; “New Product

Success Failure (S/F) Factors” handout)

 

I.              . Special Class Activity: Your awareness of recent new product successes and failures.  Reasons

for success or failure?

. ACAQ # 3

 

II.      Overview

·         Examples of failures and successes

·         Why avoid failure?

·         Crawford’s keys to success/failure

 

III.     Specific Success/Failure Factors (S/F) (NP Performance Factors)

1.       The product

                     .  Video: 1998 Effies #11 - 3M Active Strips (Relative advantage)

2.       The corporate fit

.                     .  Video: Bic Parfum (2 min.) (Mission)

..  .   Ch. 14 # 3, ACAQ # 4

3.       The marketplace

4.       The marketing program

 

    IV. Applications

                 Class case discussion: Campbell’s IQ Meals

               .  Video: A Museum of Losers: New Product Showcase (11 min.)

 

OVERVIEW OF THE NEW PRODUCT DEVELOPMENT PROCESS (NPDP)

(Related reading: Chapter 2)

 

I.       Introduction

          . Concepts inherent in the new products process:

a.       NPDP- the proactive innovation process - the set of activities, actions, tasks, and evaluations

done by individuals (e.g., a project leader and team) that move the new product project from the idea stage to market launch.

          b. Evolving product (concept life cycle)

        . Ch. 2 # 4

c. Twin/triple streams of development

       .ACAQ #4

d. Control triad/triple constraint: (1) quality/performance, (2) time/schedule, (3) costs/budget.

            Lean product development – increasing customer value and eliminating waste by doing things better, faster, and cheaper than previously. This entails producing a higher-quality product, and getting it to market faster and for less cost to the customer.  

            1. Costs: Cumulative expenditures curve

            2. Time: Decay curve (product development life cycle, mortality curve)

            3. Cycle time (time to market)

e. Sequential decision process with wide variations in practice

            Ch. 2 #2

            .   Stage-gate process (phase-review process)

.  Ch. 2 #1

            .  Three critical phases:  1. predevelopment (discovery, “fuzzy front end,” the front end of

                                                   innovation): conceptual work

                                                            2. development and testing: technical development and testing of

                                                   product, and development and testing of marketing

                                                     program

                                                             3. commercialization/launch

                      .  Crawford’s five-stage process

 

II.     Reasons Why A Seven (or so)-Stage NPDP Textbook NPDP Model is Misleading

             . Ch. 2 #3

III.    Stagegates

             

IV.        Accelerated Product Development/Speed to Market/Cycle Time/Time to Market: Why and How

.

V.           The Stages in the NPDP:

·   Phase I: Market Definition (Opportunity Identification, Market Opportunity Analysis, Preliminary Market Analysis)

                  .  Ch. 2 #1

                         . Strategy:  The Starting Point for NPDP

·Phase II: Concept/Idea Generation

·Phase III: Concept/Idea/Project Evaluation/Pretechnical Evaluation: Screening and Selecting

·Phase IV: Development

.  Product protocol/description/definition

a.       Technical Development:

              . Prototype Development and Testing

          Product Use testing

                     b. Marketing Mix Development and Testing: