New product development

Process structure

1. Fuzzy front-end is the set of activities employed before the more formal and well defined requirements specification is completed. Requirements speak to what the product should do or have, at varying degrees of specificity, in order to meet the perceived market or business need.
2. Product design is the development of both the high-level and detailed-level design of the product: which turns the what of the requirements into a specific how this particular product will meet those requirements. This typically has the most overlap with the engineering design process, but can also include industrial design and even purely aesthetic aspects of design. On the marketing and planning side, this phase ends at pre-commercialization analysis stage.
3. Product implementation often refers to later stages of detailed engineering design, as well as test process that may be used to validate that the prototype actually meets all design specifications that were established.
4. Fuzzy back-end or commercialization phase represent the action steps where the production and market launch occur.

NPD Process

1. New Product Strategy – Innovators have clearly defined their goals and objectives for the new product.
2. Idea Generation – Collective brainstorming ideas through internal and external sources.
3. Screening – Condense the number of brainstormed ideas.
4. Concept Testing – Structure an idea into a detailed concept.
5. Business Analysis – Understand the cost and profits of the new product and determining if they meet company objectives.
6. Product Development – Developing the product.
7. Market Testing – Marketing mix is tested through a trial run of the product.
8. Commercialization – Introducing the product to the public.

   Models

• IDEO approach. The concept adopted by IDEO, a design and consulting firm, is one of the most researched processes in regard to new product development and is a five-step procedure. These steps are listed in chronological order:

1. Understand and observe the market, the client, the technology, and the limitations of the problem;
2. Synthesize the information collected at the first step;
3. Visualise new customers using the product;
4. Prototype, evaluate and improve the concept;
5. Implementation of design changes which are associated with more technologically advanced procedures and therefore this step will require more time

• BAH Model. One of the first developed models that today companies still use in the NPD process is the Booz, Allen and Hamilton Model, published in 1982. This is the best known model because it underlies the NPD systems that have been put forward later. This model represents the foundation of all the other models that have been developed afterwards. Significant work has been conducted in order to propose better models, but in fact these models can be easily linked to BAH model. The seven steps of BAH model are: new product strategy, idea generation, screening and evaluation, business analysis, development, testing, and commercialization.
• Stage-gate model. A pioneer of NPD research in the consumers goods sector is Robert G. Cooper. Over the last two decades he conducted significant work in the area of NPD. The Stage-Gate model developed in the 1980s was proposed as a new tool for managing new products development processes. This was mainly applied to the consumers goods industry. The 2010 APQC benchmarking study reveals that 88% of U.S. businesses employ a stage-gate system to manage new products, from idea to launch. In return, the companies that adopt this system are reported to receive benefits such as improved teamwork, improved success rates, earlier detection of failure, a better launch, and even shorter cycle times – reduced by about 30%. These findings highlight the importance of the stage-gate model in the area of new product development.
• Lean Start-up approach. Over the last few years, the Lean Startup movement has grown in popularity, challenging many of the assumptions inherent in the stage-gate model.
• Exploratory product development model. Exploratory product development, which often goes by the acronym ExPD, is an emerging approach to new product development. Consultants Mary Drotar and Kathy Morrissey first introduced ExPD at the 2015 Product Development and Management Association annual meeting and later outlined their approach in the Product Development and Management Association's magazine Visions. In 2015, their firm Strategy2Market received the trademark on the term “Exploratory PD.” Rather than going through a set of discrete phases, like the phase-gate process, exploratory product development allows organizations to adapt to a landscape of shifting market circumstances and uncertainty by using a more flexible and adaptable product development process for both hardware and software. Where the traditional phase-gate approach works best in a stable market environment, ExPD is more suitable for product development in markets that are unstable and less predictable. Unstable and unpredictable markets cause uncertainty and risk in product development. Many factors contribute to the outcome of a project, and ExPD works on the assumption that the ones that the product team doesn't know enough about or are unaware of are the factors that create uncertainty and risk. The primary goal of ExPD is to reduce uncertainty and risk by reducing the unknown. When organizations adapt quickly to the changing environment, they reduce uncertainty and risk, which leads to product success. ExPD is described as a two-pronged, integrated systems approach. Drotar and Morrissey state that product development is complex and needs to be managed as a system, integrating essential elements: strategy, portfolio management, organization/teams/culture, metrics, market/customer understanding, and process.

  Marketing considerations

Fuzzy Front End

1. Opportunity Identification
2. Opportunity Analysis
3. Idea Genesis
4. Idea Selection
5. Idea and Technology Development

• The first element is the opportunity identification. In this element, large or incremental business and technological chances are identified in a more or less structured way. Using the guidelines established here, resources will eventually be allocated to new projects.... which then lead to a structured NPPD strategy.
• The second element is the opportunity analysis. It is done to translate the identified opportunities into implications for the business and technology specific context of the company. Here extensive efforts may be made to align ideas to target customer groups and do market studies and/or technical trials and research.
• The third element is the idea genesis, which is described as evolutionary and iterative process progressing from birth to maturation of the opportunity into a tangible idea. The process of the idea genesis can be made internally or come from outside inputs, e.g. a supplier offering a new material/technology or from a customer with an unusual request.
• The fourth element is the idea selection. Its purpose is to choose whether to pursue an idea by analyzing its potential business value.
• The fifth element is the idea and technology development. During this part of the front-end, the business case is developed based on estimates of the total available market, customer needs, investment requirements, competition analysis and project uncertainty. Some organizations consider this to be the first stage of the NPPD process.

Other conceptualisations

The Phase Zero of the Stage-Gate Model of New Product Development

1. Preliminary
2. Technical assessment
3. Source-of-supply assessment: suppliers and partners or alliances
4. Market research: market size and segmentation analysis, VoC research
5. Product idea testing
6. Customer value assessment
7. Product definition
8. Business and financial analysis

Early Phase of the Innovation Process

• Phase 1: Environmental screening or opportunity identification stage in which external changes will be analysed and translated into potential business opportunities.
• Phase 2: Preliminary definition of an idea or concept.
• Phase 3: Detailed product, project or service definition, and Business planning.

• Opportunity screening
• Idea evaluation
• Go/No-Go for development

Activity view on Fuzzy-Front End

• product strategy formulation and communication
• opportunity identification and assessment
• idea generation
• product definition
• project planning
• executive reviews

• mission statement
• customer needs
• details of the selected idea
• product definition and specifications
• economic analysis of the product
• the development schedule
• project staffing and the budget
• a business plan aligned with corporate strategy

• Incremental products are considered to be cost reductions, improvements to existing product lines, additions to existing platforms and repositioning of existing products introduced in markets.
• Breakthrough products are new to the company or new to the world and offer a 5–10 times or greater improvement in performance combined with a 30–50% or greater reduction in costs.
• Platform products establish a basic architecture for a next generation product or process and are substantially larger in scope and resources than incremental projects.

  Strategies

• Lean product development
• Design for six sigma
• Quality function deployment
• Phase–gate model
• User-centered design

  Management

• CUSTOMER CENTERED New Product Development. Focuses on:
• * Finding new ways to solve customer problems.
• * Create more customer-satisfying experience
• : Companies often rely on technology, but the real success comes from understanding customer needs and values.
• : The most successful companies were the ones that:
• * Differentiated from others
• * Solved major customer problems
• * Offered a compelling customer value proposition
• * Engaged customer directly
• TEAM BASED New Product Development
• * An approach:
• * To deserving new products in which various company's departments work closely together overlapping the steps in the product development process in order to:
• ** Save time
• ** Increase effectiveness
• * Company departments work closely together in cross functional teams overlapping the steps in the product development process.
• * Those departments are: legal, marketing, finances, design and manufacturing, suppliers and customer companies.
• * If there is a problem, all the company can work.
• SYSTEMATIC New Product Development
• * Development process should be holistic and systematic not to good ideas die.
• * This process is installed on Innovation Management System that collect, review, evaluate new product ideas and manage
• ** the company appoints to a senior person to be the Innovation Manager who encourage all the company
• ** employees, suppliers, distributors and dealers to become involved in finding and developing new products.
• * Then, there is a Cross-Functional Innovation Management Committee which:
• ** Evaluate new products ideas
• ** Help bringing good ideas
• * To sum up, New-Product success requires:
• * New ways to create valued customer experience, from generating and screening new product ideas to create and roll out want-satisfying products.
• New Product Development IN TURBULENT TIMES
• * When we are in a tough economic situation usually management reduces spending on: new-product development. Usually it is done from a short-sighted point of view.
• * Tough times might even call for:
• ** Greater new-product development, offering solutions for changing customer needs and tastes.
• ** Innovation helps
• ** Making the company more competitive
• ** Positioning it better for future.
• Virtual product development
• * Uses collaboration technology to remove need for co-located teams
• * Reduces G&A overhead costs of consulting firms
• * Advent of 24-hour development cycle

  Related fields

• End user
• Brand management
• Engineering
• Industrial design
• Marketing
• Product management