Chapter 12 New Product Development (NPD)

4Six types of new products (review) 4New-to-the-world products 4New product lines 4Additions to existing product lines 4Improvements and revisions of existing products 4Repositionings or restagings 4Cost reductions

New Product Failure Rate 98-99% 80% Depending on the study

Reasons for New Product Failure 4CEO ego 4Market size overestimated 4Poor design 4Incorrect positioning 4Incorrect advertising 4Overpriced 4High development costs 4Competitor reaction

Managing the New Product Process 4Idea generation 4Idea screening 4Concept development and testing 4Market strategy development 4Business analysis 4Product development 4Market testing 4Commercialization

Company Background 4NPD into the online environment failed 4Focused on e-commerce and CRM 4Failed to thoroughly understand BI 4syndicated research issues 4Concern over technology-image decline 4Entrepreneurial customer base 4product to start own business 4bank would leverage intra and extranet technologies

High-Tech NPD 4NPD simultaneous with implementation 4Why? 4New product would be first in a product line for the bank 4Technology map 4resource inventory 4addressing gaps in the resources 4what to sell 4ongoing management

Why Did It Fail? 4Further into NPD before simultaneously implement? 4Step 3 in the organizational improvisational plan 4outside looking in information source 4Issues 4range of technological sophistication and product support services 4out-of-core competency