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·Informal social systems: Develop a way for the departments to
interact informally
·Organizational structure: Avoid rigid, departmentalized structure
organized along functional groups. Inter-functional teams tend to
produce the most successful new products.
·Incentives and rewards: Establish incentives and rewards
Teaching Tips and Strategies from Barbara S. Faries, MBA
The purpose of this chapter is to highlight the importance of new products to firms
and to describe alternative new product introduction processes.
Key Terms and Concepts Introduced Include:
·New-to-the-world
·New-to-the-company
·Target costing
·Lead users
·Co-creation
·Product definition
·Concept development
·Primary needs
·Secondary needs
·Tertiary needs
·House of quality
·Parfitt-Collins model
Note: Two recurring themes in this Instructor’s Manual are the first two items:
·Link theory to practice.
·Engage students to link work experience to the concepts demonstrated in
the text.
·Instructors are encouraged to link theory to practice by finding current examples
in the business environment that demonstrate the key concepts above.
·If your class contains those already working in the field, have them describe how
the concepts in theory match those in the actual workplace.
I frequently teach product development at the undergraduate and graduate levels. I
often find that a discussion regarding product-planning methodologies is an interesting and
insightful way to enlighten students about ways to bring meaning to the process. I always
introduce Stage-Gate methodology to the classes. This methodology combines the
traditional linear processes and the more innovative ones. Stage-Gate incorporates both a
straight-line approach to develop and a cross-functional approach to the development and
innovation process. For more information, please consult the Stage-Gate website:
http://www.stage-gate.com/knowledge_pipwhat.php
The important thing for students to understand is that there are significant benefits
to using a defined product development planning process. Key benefits are:
·Improved “hit ratios”
·Faster times to market
·Earlier detection of failures
·Higher success results
·More projects on time and on budget
·Better cross-functional communication
·Ends with a successful product on market
I always encourage students to discuss the varying methods in their own companies
regarding product development. If I have mostly undergrads, then I may pose hypothetical
cases about products or companies of which they would be aware.
Another interesting concept to introduce is a discussion on “innovation.” There are
lots of professional and business press at the moment on “innovation” especially
“disruptive innovation.” Good background reading can be found on the Harvard Business
Press site as well as articles authored by Dr. Clayton Christensen, one of the world’s
foremost authorities on innovation and disruption in the marketplace. His website is:
www.claytonchristensen.com He has many books available to learn more about the
innovation process.
From a tactical perspective, instructors might want to introduce the term
“Marketing Requirements Document” (MRD) or “Product Requirements Document”
(PRD). These are common documents that product marketers and engineers will encounter
in the course of their work. These are documents that incorporate the information that both
marketing and engineering must address in the course of the product development process.
Review Questions
1. Consider the three major categories of new products: classically innovative products
(ones that create new categories), new category entries, and line extensions. How does
the job of the marketing manager differ for these three kinds of new products?
2. What are the pros and cons of the three approaches to new product development
discussed in this chapter? Are there some circumstances (e.g., different product
categories) in which one approach might be better than another?
3. This chapter explores alternative methods for forecasting the demand for new products
before they are launched. Compare these methods with those discussed in Chapter 3,
which use existing sales data for products already on the market. How are the
forecasting challenges facing marketing managers different in the two cases (beyond
the fact that there are no sales data in the pre-launch phase for new products)?
typical customer is. This will help us when we allocate resources for the product or service
4. For frequently purchased products, successful new products must have high trial and
repeat rates. What tools can the marketing manager use to increase trial rates? Repeat
rates?
5. How is launching industrial products or consumer products with infrequent purchasing
rates (e.g., TVs) different from launching frequently purchased products? What key
measures are used to assess trial and repeat rates for frequently purchased products?
6. It is fairly obvious that the success rate of new products would improve if
communications between R&D and marketing improved. From a human resources
perspective, what are some of the programs and incentives you could put in place to
accomplish this?
Review Questions
Exercises, Activities, and Projects
Purpose: To help students link theory to real life.
To demonstrate the important implications of product development issues.
·Have the students engage in a discussion regarding the pros/cons of product
development planning processes.
·Have the students research and discuss innovation and the integration of
innovation in product development.
·Have the students discuss companies they perceive as the most innovative or
those with the most product successes and why.
