New Products Management 11e / Crawford & Di Benedetto Part III Concept/Project Evaluation
Part III – Concept/Project Evaluation
Suggestions for Using Part III of the Text
Including Answers to the Applications and Case Teaching Notes
CHAPTER CONTENT
Here is the outline of Part III, Concept/Project Evaluation.
Chapter 8
The Concept Evaluation System
Cases: Chipotle Mexican Grill, Concept Development Corporation
Chapter 9
Concept Testing
Cases: Domino’s, Comparing Smartphones (B)
Chapter 10
The Full Screen
Case: Logitech (A)
Chapter 11
Sales Forecasting and Financial Analysis
Case: Bay City Electronics
Chapter 12
Product Protocol
Case: Fisher & Paykel, DuPont, Logitech (B)
INFORMATION FOR THE NEW ADOPTER
Part III constitutes what some feel is the very essence of new products management–particularly
from the view of marketing professors. They are trained in the many tools of marketing
Each instructor will of course place emphasis where desired. The topic of evaluation also
We discourage going too deep into evaluation, however, partly because the tools of evalua–
tion are often covered in other courses and partly because the day-to-day job of the new products
manager involves so many other topics. They must deal with strategy, with organization, with
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New Products Management 11e / Crawford & Di Benedetto Part III Concept/Project Evaluation
concept generation, with public policy, and especially with commercialization. It is not as easy to
At the beginning of this section it is probably desirable to establish the idea that the entire
new products management process deals with the gradual evolution from early idea/concept
through to successful product. There is no one step that dominates; in fact, letting such happen
will distort the process. Likewise, this means that at all times we are evaluating something about
This means that Chapter 8 is the toughest to teach. It sounds so academic, almost pedantic.
Yet the concepts are valid; they inevitably attract serious discussion in management training
seminars. Unless students can think in the systems sense when they do the Concept
The specific ideas of surrogates and risk matrix are worthy of some discussion–they are
hard for students to understand at first.
Moving into Chapter 9 becomes more traditional, and about the only problem is in getting
students to be serious about concept testing–getting them to understand that it is not just
Along the way, don’t undersell the market description and preliminary market analysis
steps; sometimes these are the most helpful things a firm does, especially if it is small.
In Chapter 10 there are two issues. The first is to teach students to think in terms of scoring
models, not checklists. Luckily, this comes easily for them, and possibilities for a class
application abound–e.g., a scoring model for use in evaluating new course proposals. The other
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New Products Management 11e / Crawford & Di Benedetto Part III Concept/Project Evaluation
Chapter 11 is sometimes a problem. Users of previous editions of this text demand
coverage of financial analysis, and they have wanted it earlier in the book than it originally
appeared. So here it is. But, good financials are hard to come by at the pretechnical stage–we
The last chapter in this part (Chapter 12) gives an entire chapter to the subject of protocol,
The basic idea of wanting a picture of the product before technical work begins is easy to
grasp. But, and this is the problem, students tend to do the same as managers, and that is to rush
to features–physical dimensions or service action methods. Getting them to phrase the request to
R&D or Design in terms of benefits delivered or performance delivered is tough. The best
Note that protocol today is broader than it began. The requirements are those of all
functions, not just technical. Study Figure 12-2. All functions have work to do before the item
INFORMATION FOR THE PREVIOUS ADOPTER – MAJOR CHANGES TO PART III
There are updates throughout these chapters. In particular, newly-revised content on concept
A major addition to Chapter 12 is the extended discussion of the Voice of the Customer.
While introduced earlier in the textbook, it is returned to here as a vital link between product
protocol and Quality Function Deployment/House of Quality. The controversial quotes from
There are several new cases. Domino’s documents the remarkable “Pizza Turnaround,”
and is a very flexible case that can be used to illustrate Voice of the Customer, reaction to a
weakening value proposition (and why it had been weakening in recent years), and also
analytical attribute techniques (choosing among several alternatives for each of three key
PROJECT SUGGESTIONS
Evaluation is one topic where student projects are a must. Sometimes projects call for concept
testing, scoring model, and protocol. Beyond that, shoot for plans – that is, what the students
Some instructors form student teams at the start of the course, and expect them to get much
deeper into their projects, actually calling for prototypes (hand crafted) and full marketing plans.
If you use a project, you should require that students (1) stipulate the firm that is
developing the concept, (2) spell out an appropriate product innovation charter under which this
type of concept might have arisen, (3) conduct 5-10 concept test interviews (or one good focus
In another in-class exercise, students are asked to think about an incredibly simple product
(a paper clip, for example), and asked to do a simple House of Quality. They develop customer
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New Products Management 11e / Crawford & Di Benedetto Part III Concept/Project Evaluation
Applications Teaching Notes for Part III
Chapter 8
1. “During a recent management meeting, two of my division managers got into
quite a tussle over the programs they use to evaluate new product ideas. One of
them said he felt evaluation was very important; he wanted to do it quite
completely, and he certainly didn’t want anyone working to further the develop-
ment of an item unless the prospects for it looked highly promising. The other
manager objected to this, saying she wanted products to move rapidly down the
pike, saving the serious evaluation for the time when she had the data to make it
meaningful. Both persons seemed to have a point, so I just let it ride. What do
you think I should have said?”
The answer depends on whether or not you want to find out if they are both right. They certainly
could be, since the mode of an evaluation system depends heavily on (1) the cumulative
expenditures curve and (2) the availability of information which would allow a competent
assessment. The first point is directly from the text, and shows that a firm with heavy initial
Regarding the matter of data, if customer reaction to a size or function or even to a
positioning will primarily determine purchase intentions, then all the concept testing in the world
2. “I don’t know what business school professors would say, but it often seems to
me that we might be just as well off if we didn’t do any evaluation on new prod-
ucts. Just produce the ones we’re convinced will sell the best and really support
those. Let’s face it–we never have reliable data anyway, and everyone is always
changing minds or opinions. Never knew so many people could say I told you
so.”
Several issues here. First, they obviously would be making an evaluation–the statement “we are
convinced will sell” proves this. More important, the president is saying that evaluations by
But, of course, there are far more technocrat failures than successes, so the approach is
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New Products Management 11e / Crawford & Di Benedetto Part III Concept/Project Evaluation
The president’s last point about data is quite different. If in fact, for whatever reason, there
are inadequate or inaccurate data, then the process has to go on without evaluation by outsiders.
3. “Tell you another funny thing about evaluation–seems as though the folks
involved in it never use the facts or data that they should and instead use some
sort of surrogate data. I don’t see why you have to beat around the bush. Why
not just gather the real facts in the first place and not use those substitutes?”
This situation refers to the discussion on surrogates in the chapter, and is heard often. The
problem is that most critical so-called facts are not facts but conclusions. For example, can we
This is a common practice in life. For example, will I be late for the meeting? Surrogate:
How much time do I have left? Another surrogate: How badly do I want to be on time? Still
The analytical challenge to the new products manager is to construct a set of surrogates
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Chapter 9
1. “You know, most of our new products people do a great deal of marketing
research–concept testing, attitude surveys, and the like. But let me read some–
thing that one automobile designer thought about marketing research.” (She
then read from a yellowed clipping on her desk.)
Market research is probably the greatest single deterrent to excel-
lence in modern business. It’s a crutch for managers with no vision
and no conviction. On the surface, it sounds sensible enough: Find
out exactly what the buyers want before you come to a design. But in
practice, it’s impossible. The public doesn’t know what it wants
without being shown the choices, and even then, preference is apt to
veer off in the direction of Kmart. Market research gives you Malibus
with Mercedes grilles, refrigerators in avocado hues, and Big Macs
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New Products Management 11e / Crawford & Di Benedetto Part III Concept/Project Evaluation
with everything. You do not, however, produce greatness with this
technique.1
“Perhaps you would comment on that statement.”
Classes vary in reaction to this statement, depending primarily on how many industrial designers
and design engineers there are in them. Design is an art form, and we know that art form joins
And therein lies the answer to this application. Most new product development takes place
in the commercial world–volumes and costs produce profits. This is a world in which the really
2. “A cosmetics competitor of ours is trying to speed up its new product work on
lipsticks by a system that uses (1) brainstorming to create ideas (392 in a recent
session); (2) evaluation of those ideas by the same group of people, down to only
the best 50 ideas; and then (3) focus group sessions for concept testing those
ideas down to the few that should be developed rapidly. Do you see anything
wrong with this system?”
We must be careful in using the word “wrong” in judging evaluation methods. Methods are
In this case, the approach is a sound one, not atypical of what many firms do.
Brainstorming is perhaps not the best method to use at the beginning, especially if by itself. As
pointed out in Part II, brainstorming’s best role is as a device to solve problems found by other
3. “I would be curious to test your personal judgment on some new ideas from
one of our recent idea sessions. What do you think about each of the following?
a. A gasoline-powered pogo stick.
b. A combination valet stand and electric pants presser.
c. Transistorized golf balls and an electric finder.
d. An Indian arm wrestling device so you can arm wrestle with yourself.
e. An electrically heated bath mat.
f. Chocolate candy in an edible chocolate box.”
1 “The Best Car in the World,” Car and Driver, November 1979, p. 92.
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New Products Management 11e / Crawford & Di Benedetto Part III Concept/Project Evaluation
We should say first that these ideas were taken from a list in a popular advertising magazine.
And this exercise will not seem at first to do much more than entertain the class for a
But, there’s more to it. The student should, of course, refuse to make evaluations when
asked. The ideal response to each of the ideas should be: Well, to me perhaps that seems screwy,
a. Gasoline-powered pogo stick: Technically difficult to comprehend, for sure, but fascinating to
b. A combination valet stand and pants presser: Again, interesting, with considerable potential,
but various forms have been tried already. Might have special value for people who mess
c. Transistorized golf balls: Long sought, great rationale. So far prototypes are technically and
functionally not useful. Overkill again, perhaps, since golf balls are really not that
d. Indian arm-wrestling device: Now this one seems reasonable. Arm wrestlers would seem to
e. Electrically heated bath mat: Here we have a real need, and presumably the ones marketed
f. Chocolate candy in an edible chocolate box: Candy novelties number in the thousands. Tiny
markets, temporary, but newsworthy for a while. Could be used to attract attention in a
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Chapter 10
1. “Our small electrical engines division recently threw out a screening system
that was based on a fairly complete scoring model, as they called it. Seems the
model kept rejecting too many of their product ideas, some of which looked like
sure winners to them–and to me, incidentally. Under their new system, a
top-management committee reviews these ideas personally, without all that
paperwork, and it looks like things will be better. Do you have any reaction to
that?”
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New Products Management 11e / Crawford & Di Benedetto Part III Concept/Project Evaluation
Like most of the cases in these Applications, this scenario actually happened; several company
managers made the given objections. But, the rejection of the “good” ideas was probably due to
Second, they have not solved a problem. Rather, they have created a new and far more
dangerous problem. They still use scoring models (almost all personal evaluations do) but their
2. “We experimented with a numerical scoring model some years back — it just
didn’t work. Brought in all the senior people, sales managers, product
managers, you name it. We selected several dimensions of technical and
commercial viability, not too different from the scoring model you presented.
Rated everything on scales of 1 to 5. Guess what? All the projects that were the
“pet projects” of senior management came out as 5’s. The ones they all could
care less about came out as 1’s. And all the ones we really lacked good
information on came out as 3’s. A lot of help that was!”
Obviously this problem arises from poor implementation of the scoring model. The text has a
paragraph on “Scorers or Judges” that discusses the potential problems individuals can
sometimes bring to a scoring model exercise. All of these can lead to biases. If allowed to play
office politics, senior managers (and those trying to win favor from senior managers) will rank
the known “pet projects” as five, and lo and behold, they come out as five when the results are
tabulated. Similarly, if information is lacking about a project (or if senior managers unfamiliar
with the technical nuts and bolts are asked to rate a project on several very specific dimensions),
3. “If it happens that one of our divisions absolutely must use a scoring model,
as you call it, I strongly prefer the one you said that division of AT&T uses. You
know, just get answers to the four questions: Do customers care, Do we care,
Can we do it, and Can we stay ahead if we do? What more is relevant? That list
covers technical feasibility and commercial feasibility both, doesn’t it?”
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New Products Management 11e / Crawford & Di Benedetto Part III Concept/Project Evaluation
Sounds like a good answer, and in fact a West Coast consulting firm made lots of money selling a
system based on questions like these. But, they just organize the evaluation system, they don’t
Same for the other two questions. We always have specific factors on the matter of our
The value of the approach is that some managers don’t want to get into great detail, they
distrust formats with many factors, weights, etc. If a few of them want to ask general questions,
such as these four, they can avoid the complexity. Of course, they each have their own set of
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Chapter 11
1. “You’re still a student, but when you tell me about all the problems new
product managers have putting together financial worksheets you sound like the
people we have around here. They complain that the financial analyses we use
call for more data than we have. They say the results are unreliable and all that,
but, what they really want is no financial appraisal at all–just leave them alone
and they’ll eventually bring back the bacon–big slabs of it. How else can we
keep reasonable managerial control over the use of sometimes very great
corporate resources?”
This application is meant to address directly one of our biggest problems–how can we do good
financial analysis on new product concepts as they go through the development process? Of
course we don’t have the data we would like – we may not even know for sure (at any one time)
But the application statement includes a couple other items for specific comment. One is
the idea of no financial appraisal at all. This is technically impossible. No firm would approve
The other angle, about their eventually bringing the bacon home, is OK, and is one of the
methods sometimes used to “handle” the problem of poor data (see discussion in Chapter 11).
But, even this has an outside risk point–is there a single CEO who would literally risk the entire
firm on a new product where the only evidence is “I think this will work” from the top person on
2. “One thing I know for certain–I don’t want any sales managers or technical
research people making new product forecasts. I’ve never seen such lousy
forecasting as we get from these people. Sales managers either love a new item
so much they think it will outsell everyone, or they think it is a dud and
underforecast equally badly. Absolutely no objectivity in them. And the techni–
cal people, well, they become so enamored with their inventions that they lose all
objectivity too. What I like is forecasting done by independent people–project
managers or new products managers in separate departments. Have you run
into any good ways of keeping sales managers and technical researchers out of
forecasting? You agree that they should be excluded, don’t you?”
There are several questions here. First, about arranging to keep these people from being the ones
responsible for forecasts, yes. It can be done if you have a new product organization which is
But, a second issue is, should they be ignored? Not at all. If sales and technical people
However, are their opinions subjective? Are technical people and sales people biased?
Unfortunately, the answer is usually yes. For good reason–inventors do have a bit of champion
But there are usually particular persons in technical and sales departments who can be of
help in new product forecasting. They are apt to be managers–regional and national sales
3. “Actually, I agree with one thing you said a while ago, and that related to the
desirability of making financial analyses on a threshold basis. I realize how
many unknowns there are in the new products business. As a president, I realize
too that most of the financial projections I read are just air. If a new products
group can convince me that they can sell at least X volume, and at that volume
their costs will be Y, or lower, then I am inclined to go along with them. But,
deep in my heart, I don’t like it–those thresholds are just as much subject to
manipulation as are the more structured NPV projections.”
I agree that thresholds can be manipulated. Few things escape this criticism, given that almost
nothing is known for sure during a new product’s development.
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New Products Management 11e / Crawford & Di Benedetto Part III Concept/Project Evaluation
But, this president seems to have missed the value of threshold thinking. It appears she will
take either method, without preference. But the idea is that threshold thinking can achieve the
basic task of assessing financial risk and control of assets, with far less detailed forecasting of
Of course, there may be “details” that are important. For example, if there is a fixed limit
on production capability, then the maximum likely demand is important too. Or, if the firm has a
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Chapter 12
1. ” Let’s cut right to the quick on this one. I understand the theory of having
benefits rather than features in a statement of requirements that kick off
technical development. But, to me it is just that, theory. I knew one of the top
people at that computer company your book talked about–the one where a
corporate new product engineering group spelled out the specifications of each
new product before technical work was funded. I heard the same criticism your
author did, so I called this woman and asked her about it. She said the facts
were right, but the implication was wrong–corporate staff did indeed spell out
most of the features, but only to get the project moving. She said if they just
gave their research people the benefits or needs of the customer, those dreamers
would never reach a prototype. Every item would be a Taj Mahal. You know, I
think she had a point. What do you think?”
Score one for our president–there is no question that overengineering on new products has been
frequent, and costly. But, we can’t assume (as this person did) that technical people want to add
feature after feature, cost after cost. Evidence is piling up that technical people seek the same
The case referred to in the text, and in this application, chose the first way–and engineers
at the corporate level reviewed their knowledge of end users and decided what features would be
The alternative is to gather needs, study those needs to compile that set the firm wants to
attack (never can we seek to meet all of the customer’s needs), and give that set to technical. This
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New Products Management 11e / Crawford & Di Benedetto Part III Concept/Project Evaluation
2. “I really don’t think you understand what parallel or concurrent new product
development is all about. You said you had studied in your course that all of the
functions get involved. No, concurrent development means just that–technical
development phases–design engineering, etc. They are all doing work very much
alike, they work with each other, they can feel how things are going and when
they can take a chance and make a premature commitment. Marketing people
can’t do that. Even production people (process engineering) have trouble on this
score.”
The value of this application is that it reminds the student of a distinction made in Chapter 1–the
term product development is often taken to mean that period from idea to shipping dock. It
Granted, parallel processing and concurrent development may be easiest using the
restricted definition, but it can also be of value in overlapping activities in the other stages as
But a second issue lies in this application–the statement that because technical people
work closely together they are the ones involved in concurrent development, not marketing
This issue helps lead us into the materials in Part IV on Development. Among other things,
3. “I heard a funny one two weeks ago that might interest you. Seems one of
our R&D people went to a new products management seminar and heard about
a thing called the protocol. They told him it was the device whereby the overall
manager of new products communicated to R&D exactly what was wanted from
the technical group. R&D even had to ‘sign on the dotted line,’ swearing that
they thought it could be done. He was really steamed – said no one could tell
R&D what they should come up with, not in advance anyway. And R&D is
responsible only to top management, not new products managers, so they don’t
have to promise anything. He said he considered that concept the most stifling
single action imaginable. How would you answer that scientist, or would you?”
This is a very useful application, and permits you to bring in several issues of your choice.
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New Products Management 11e / Crawford & Di Benedetto Part III Concept/Project Evaluation
1. The new products team is multifunctional, with R&D on it. The team does not communicate to
2. The head of a new products team doesn’t communicate to anyone. Oh sure, such person may
3. Thus the head of the team is often seen as a facilitator. The team leader’s task is to get the best
5. No one signs on the dotted line–there is a complete failure if they feel this way. Instead, the
firm decides that the protocol gives the best direction, and everyone wants it to be
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