New Product & Service Development How Mudpuppy can use the NPSD Process to create the right products at the right time!

Organizational Structure & Strategy Privately owned company with 25 employees We design, manufacture & wholesale gift items We cater to upscale gift & toy stores Sales overall have remained flat for the past 3 years. Mudpuppy has great growth potential Customer base changing because of economy

Create new and innovative toys to increase sales (push through the plateau) Minimize our creation of me too products Use new materials - more than just paper Business Unit Strategy

How Do We Innovate? What we do: Take Fieldtrips Reverse Engineer What else we should do: Look Outside-In, Inside-Out, Above and Below Observe our Points of Light Wear Others Hats: Role Play Spend More Mental Time in the Future Take the International Perspective Ask Why Not?

What do we do with our ideas?? What we do: We keep samples and dummies in a closet, in drawers, etc., What we should do: Create an Idea Bank!

What should we do with all those ideas we put in the idea bank??? Growth charts…bingo game… Party ware…bath toys…masks… instruments…plush … etc., etc.,

Our current NPSD process looks like… Design Team (2 ppl) chooses three ideas Production team gets dummies made Design reviews dummy with production and starts designing Production requests pricing from one of our manufacturers Design and production try to lower cost Mock up dummies are created and presented to CEO and sales Sales & CEO feedback is given, but 2 ideas must be chosen – time is running out! Design completed, all depts sign off on price Final proof received and never rejected- no time! Product manufactured and put in catalog Product Launched catalogs mailed to reps and customers Sales are monitored monthly. New styles added 1 yr later.

Major issues with current process All upfront research is done only by designers, and they fall in love with their own ideas. No objective participants in the process Not enough go/kill checkpoints – at the only go/kill moment (meeting with CEO) we have already spent too much time and money, feel that we cant start over now! Minimal cross functional development until end stages.

Use the New Product and Service Development Funnel

New Product and Service Development Funnel

Ideation Screen Lets narrow down our ideas… – Use pre-determined criteria Cant fall in love with our own idea – Broad criteria provided by CEO and upper management of design dept Not a me too product For children ages 2-8 Retail for $25 or less Product must be launched in less than 8 months – Managed by a cross functional team To maintain objectivity we can use 1 person from several depts : Design, Customer Service, Accounting

New Product and Service Development Funnel

Expansion and Surface Evaluation Lets expand our ideas and do some inexpensive research… Expansion: Any new ideas? – Ok to add a few here, they must pass the next screen – If they dont make it through, send them to the idea bank! Surface Evaluation: Desk Research – Search internet for similar products – Talk to employees, sales reps, distributors, and manufacturers

New Product and Service Development Funnel

Surface Evaluation Screen Lets narrow down our ideas again… – Use pre-determined criteria Cant fall in love with our own idea – Specific criteria provided by Design & Sales Overall positive response from reps, employees and distributors Will it work in an International market as well as domestic? Can we manufacture it in a new material? Does this product have at least one positive unique quality over our competitors? – Managed by a cross functional team To maintain objectivity we can use 1 person from several depts : Marketing, HR, Admin

New Product and Service Development Funnel

Detailed Evaluation Lets do some real research and in-depth investigation… Compose sketches, in office mock-ups Determine product features, benefits Contact major accounts for feedback Detailed information to manufacturers Research: – competition – buying patterns – extension possibilities

New Product and Service Development Funnel

Detail Evaluation Screen Lets narrow down our ideas to ONE… – Use pre-determined criteria Cant fall in love with our own idea – Specific criteria provided by Accounting, Design & Sales Have any of our competitors released a similar item yet? Does our research support this product? Can we manufacture for 1/8 of the suggested retail we want? Can we expand this product line if it succeeds? – Managed by a cross functional team To maintain objectivity we can use 1 person from several depts : Accounting, Customer Service, Marketing CEO should also be in this team- we are about to start spending $$$$$

New Product and Service Development Funnel

Cross Functional Development We have our one idea, now everybody gets involved! Multiple departments start their own NPSD Funnels Production: – Source vendors – Rapid prototypes Sales: – Customer & Rep feedback – In house testing – Monitor inventory Marketing: – Determine / isolate target market – Marketing plan Design: – Commission artists – Generate design template

Multiple Departments Remain Involved

New Product and Service Development Funnel

Cross Functional Development Gate The gatekeepers check all teams activities… We need their OK to move forward to testing – Review market research Are our customers still on board? – Review production Are estimates from manufacturer within our goal? Is the manufacturer certified? Will we meet our launch deadline? – Review accounting Do we have the funds to finance this project?

New Product and Service Development Funnel

Testing Lets really test this product out before we deploy! Focus groups receive prototypes Major accounts receive prototypes In house tests for function, design, safety Manufacturer tests for lead, small parts

New Product and Service Development Funnel

Testing Gate The gatekeepers check all testing results… We need their OK to move forward to deployment – Review focus group and customer responses Did we ask the right questions Did the children like it? For how long? Did their parents say they would buy it? As a gift or only for their own child? – Review lab tests Is the product safe? Does it function properly? – Review in house response Are we happy with it? Does it adhere to our original goals? Do we see potential for growth?

New Product and Service Development Funnel

Deployment The final countdown! Manufacture the product Warehouse notified of expected receipt Marketing materials sent Reps informed Customer Service prepared

New Product and Service Development Funnel

Deployment Gate The gatekeepers make sure we are ready to launch… – Warehouse Inventory received on time Items ready to ship – Sales Reps trained Samples to showrooms – Marketing Catalogs mailed – Customer Service Ready to answer questions, take orders

New Product and Service Development Funnel

Launch! Start Selling and Shipping

New Product and Service Development Funnel

Post Launch Review If we followed the model, there shouldnt be surprises… Review final costs and profits Gather info on rate of sale, re-order % and rate Product life span – any complaints about quality? Discuss expanding the line or discontinuing Request Rep and customer feedback after sale

New Product and Service Development Funnel

Post Launch Review Gate The gatekeepers make sure we … – Review all Post Launch Review Data Did we ask the right questions? Did we keep track of feedback? – Decide if we will continue/expand the product line – If so, establish future review schedule to ensure we continue to monitor the success

Thank you!