New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
Part I – Overview, and Opportunity
Identification/Selection
Suggestions for Using Materials in Part I of the Text
Including Answers to the Applications and Case Teaching Notes
INTRODUCTION
Each of the following parts contains: (1) Comments about one part, how it relates to the others,
some postures you might want to take toward that material, and things to watch out for; (2)
“answers” to the applications situations which are given at the end of each chapter; (3) a teaching
note for each of the cases given at chapter ends; (4) some thoughts relative to possible projects
that might be assigned to students; and (5) the key concepts that the student should take from a
study of that part.
CHAPTER CONTENT
Here is the outline of Part I, Overview and Opportunity Identification/Selection.
Chapter 1
The Strategic Elements of Product Development
No cases.
Chapter 2
The New Products Process
Cases: Lego, Tastykake Sensables, The Levacor Heart Pump.
Chapter 3
Opportunity Identification and Selection: Strategic Planning for New Products
Cases: New Product Strategy at Kellogg, Honda Element.
INFORMATION FOR THE NEW ADOPTER
Getting started on a new products course is not unlike the problems of getting started in all
courses. Each instructor has individual preferences. We like to take plenty of time to make sure
the student understands where this course comes from, because it necessarily is unlike other
courses in the department where taught. Furthermore, almost all offerings are rather innovative
(new products instructors like to do product innovation too!), and there is usually some hands-on
work in the course which needs explaining.
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
The introductory chapter is where most instructors like to point out their individual slants
and interests–e.g., technology or new product marketing. But, whatever the viewpoint, we urge
you to develop fully the idea that new products are a high-risk area of management, that careers
Yet this field is fun too, lots of fun. Interesting people work in it, partly because they are
confident enough to believe in their ideas when others laugh at them and partly because they live
Chapter 1 introduces the students to the strategic elements of new product development.
First and foremost among these is the new products process, introduced in Chapter 1, and further
extended in Chapter 2. Students have little idea of what is involved, unless they got parts of it in
some other course, or worked in a firm and think what that firm did is what all firms do. The
Chapter 3 contains the second and third strategic elements of new product development;
the Product Innovation Charter (PIC) and the product portfolio. Students find this perhaps the
toughest part of the course. There is a natural instinct to resist being bound by tight strategy, so
the advancement of new products strategy has been slow. Many managers hate it, because it is
fully intended to give focus and restrict freedoms. Yet top managements know there must be
We urge you to build the discussion around the PIC and around specific company
situations. The Kellogg’s and Honda cases are examples, but the instructor and the students
INFORMATION FOR THE PREVIOUS ADOPTER – MAJOR CHANGES TO PART I
There are major changes throughout Part I, much of which is an update to include the data from
the newest CPAS (Competitive Performance Assessment Study) conducted by the PDMA in
2012 and released in 2013. The first three chapters continue to introduce three concepts (new
products process, product innovation charter, and product portfolio) as the three strategic
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
PROJECT SUGGESTIONS
There won’t be much time available for projects in Part I, because the material is heavy, and the
instructor is usually in a hurry to get into the concept generation stage. If the students will be
working on a term-long project, it should probably begin after Part I, because in real life the
guiding strategy would have preceded the project. If desired, students can be asked to take a
Another type of activity is to ask the students to bring from their experiences or from the
business press examples of company new product strategic thinking. A variation is to ask them
Perhaps the ultimate project is to ask students to write out their own individual PIC’s.
Applications Teaching Notes for Part I
(Recall that each application is a statement or question made by a company president during a
job interview with a student taking the current course.)
Chapter 1
1. “When you were talking a while ago about taking risks, I wondered just
whose money you were talking about. A fellow I know out in California insists
that all new product team members invest their own money (with his) in their
projects. Fifty thousands dollars is not unusual. In that system, I’ll bet you
would be seeking to avoid risks, not trying to find them.”
Students tend to take this idea with skepticism – they often say, “That’s a lot of baloney.” But the
fact is, it happens, especially in the Silicon Valley and other parts of innovative California. And it
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
is a sobering thought. $50,000 isn’t all that much to Californians buying a house, but it is to one
who has to come up with the cash. And woe to the manager who says the project is too risky.
2. “Funny thing, though, it sure does frustrate me when I hear a division
general manager’s strategy is to imitate other firms. Now I know that some
firms might reasonably use imitation, but none of my divisions should. Should
they?”
It’s dangerous to argue against this thinking. Everybody supports innovation. To imitate is
inferior, something one should do only under the most adverse conditions, and when innovation
is impossible. But, whether to imitate or innovate is not a moral issue (usually), so the answer to
the president can be found in dollars and cents. Look at the firm’s market and its strengths. To
our knowledge, there is little R&D being done on brooms, railroad ties, table salt, and yo-yo’s.
3. “I would like to be sure as many of our people as possible support innova–
tion, but I know some people in the firm just can’t react positively to proposed
innovation, no matter how much we need it. Tell me, how do you think I should
go about spotting the worst offenders, and what should I do with them when I
find out who they are?”
This inquiry indicates an important aspect of these application situations. Presidents don’t
respect chapter outlines, and we should encourage students not to wear blinders too tightly either.
Anyway, in this case the president is treading on dangerous ground. Organizations cannot hope
to staff only with risk-accepting innovative types. We can only imagine what life in such firms
would be like. But people come in all types, and organizations need all types. Not all jobs, even
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Chapter 2
1. “I’ve got to make a speech down in Dallas next month. It’s part of a confer-
ence SMU is having on the general topic of opportunity identification (OI). They
want me to explain why OI is sometimes more important than brainstorming
and other techniques of concept generation. Seems to me it isn’t. What do you
think?”
Here the president is setting brainstorming off against opportunity identification, as though they
were substitutes. In fact, they go together beautifully. Like saying that a good trout rod and fly
collection go well with a good trout stream. One wants the best equipment, of course, but if the
2. “I work for a financial services firm. We do new product development all the
time, and a lot of it is of the incremental variety. You know, bundle credit card access
to a savings account, bundle the savings account to a money market account, add an
IRA investment option, things of that sort. Explain how the new products process is
relevant in my industry, and to my company. Seems like it’s more tailored to
physical goods. Isn’t it a little misleading?”
This question is designed to get the students thinking about the broad applicability of the new
products process. The familiar multi-step process that serves as the core of this text, and most
new product courses, is most obviously applicable in the case of new physical products (i.e.,
where “development” really does mean drawing up blueprints, making physical prototypes, etc.).
Students may be skeptical about its applicability in the case of services. But, as the chapter
3. “We are increasingly committed to really new products — we see them as the
future of our company. Can you explain to me again what the new products process
looks like for them? I’m not really convinced that the process you outlined is
applicable to them. Seems like it will generate more incrementally new products
rather than bold new ideas.”
To properly address this question, keep in mind the first phase of the new products process:
strategic planning and opportunity identification. If the firm’s product strategy focuses on the
revolutionary and the groundbreaking, then later phases of the process will be in keeping with
this. (More on product strategy, or the Product Innovation Charter, in Chapter 3.) The
———————————-——
Chapter 3
1. “I’m afraid I don’t follow your reasoning very well when it comes to this
matter of innovativeness–being a pioneer, an adapter, quick second, and so on.
Seems you’ve always got to come up with something new, or it simply won’t sell.
I believe we agreed on that earlier when we discussed the concept that winners
market unique, superior products. Further, if you’ve got something new, why in
the world would you ever want to be less than first to market with it? You’ll
lose your uniqueness that way. Sounds like you’ve taken a simple practice and
made it complex.”
Perhaps so, and for good reason. These matters should not be dispensed with by simplistic
practice models. Yet students do often fail to see the significance of matters in this area of
strategy, and so do some practicing managers. It is not a simple chapter.
First, note that the chosen degree of innovativeness is a strategy–a plan, an intention. One
plans to be pioneering, or one plans to be a quick second. What actually happens in any given
situation must reflect what eventually comes out of the technical design process. If a firm plans
to be adaptive, but finds something that permits it to be pioneering, it is doubtful they will wait
until someone else discovers it! Likewise, if they plan to be a late follower, but in a particular
situation can be a quick one, within the cost and risks constraints, they probably will be.
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
2. “Somewhere along the line, R&D gets the short end of the stick. Now, I know
about the arguments for strategy, but I really do feel that R&D deserves a better
shake than to simply be told to do this or that. Some of our top people are in
R&D–our electronics division has a couple of the world’s best fax technicians. If
I were doing it, I think I would have R&D prepare the first draft of a PIC, at
least their areas of a PIC, and then have other areas like manufacturing add to
it. When all of the interior departments have their sights properly set, I would
ask marketing to reconcile the PIC with the marketplace. Otherwise, we’d have
the tail wagging the dog when it comes to the new products function.”
In developing a new product innovation charter, all department inputs are sought; the process is
integrative and team-based. It is not a series of modular actions by separate departments.
But, the question raised in this application goes deeper than that. First, the president may
be correct in that R&D could really develop the strategy if the firm were almost totally
technology-driven. In many pharmaceutical companies, the research laboratories essentially
3. “I saw the other day where film makers (large ones as well as small ones) are
finding profits in low-budget films. It seems they aim for narrow, but very
reachable market segments, (e.g., young kids), and they use standard
film-making technologies but use only what they call “emerging” actors and
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
directors (meaning “cheap now”). They try hard to capture the interests of their
core target group, and they mean it when they say low-budget. I also read where
several of them are trying to move out rapidly from the core when they have a
winner–little kids, bigger kids, etc. They think this approach yields the best
return on investment even though it causes them to miss out on the occasional
block-buster winner. You may not even remember hearing of some of these
low-budget specials, but they had names like The Waterboy, There’s Something
About Mary, Rush Hour, and The Wedding Singer. That last one focused on boys
and men, but they added a love story line with Drew Barrymore that brought
women in too. Now, can you fit all that into what might be the PIC of these
films? What are the negatives of this approach?”
The student should be encouraged to think about the four components of the PIC as outlined in
While answers will obviously vary, some ideas that should come up include the following:
Background/Arena: The movie-making business has changed remarkably in recent years.
Many industry observers point to the huge budget and phenomenal success of Star Wars in the
late 1970s as the real turning point in this industry. By the mid-90s, while the major studios were
focusing on high-tech, special-effects-laden movies with big-name stars that demand huge
salaries, independent movies shot on extremely limited budgets with then-little-known actors and
A failed blockbuster could spell financial trouble for investors, such as marketers seeking
tie-ins (e.g., Burger King and Small Soldiers), and could jeopardize successful acting careers. A
Other changes in the movie industry would need to be considered as well. For one thing,
many movies that had little success in the theaters would eventually do rather well as a video
Also, mergers and takeovers in the movie industry may have put pressure on studios to be
more bottom-line-oriented and reduce risks. Industry insiders say that big-budget movies such as
Godzilla are so tied up with merchandising tie-ins, timed to go at the time of the movie’s release,
that the planned release date must be met – even if more (and perhaps substantial) fine-tuning by
the director would have greatly improved the movie’s quality. As an extreme example of this,
Goals/Objectives: These structural changes in the movie industry put pressure on
competitors (big and small alike) to increase efforts on smaller-budget movies. Seeing that many
of the indie producers were aiming at narrowly-defined demographics, the big studios were
following suit with movies such as The Waterboy and The Wedding Singer. While students will
Guidelines: (For the big studio trying to capitalize on the growth in low-budget popularity
and profitability) These can vary widely, but could include: Use actors that have had some
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