Introduction to New Product Development January 18, 2007

Introduction to NPD Why is NPD an exciting topic? What separates winners from losers? Why does NPD matter? The NPD Process

Introduction to NPD Why is NPD an exciting topic?

Risky To avoid failure, everything has to be right: Concept Design Pricing Positioning Packaging Advertising and Promotion

Risky New Products Showcase and Learning Center Largely for consumer products that tend to have higher failure rates:

Critical

Source: Product Leadership - Creating and Launching Superior New Products Robert G. Cooper

Introduction to NPD Why is NPD an exciting topic? What separates winners from losers?

Winners vs. Losers Success Drivers Correlation with ProfitsTimeliness A unique, superior, differentiated product.53n/s A strong market orientation w/voice of customer Early fact-based product definition prior to development Effective implementation of front-end activities Use of true cross-functional teams Leverage – project builds on firm’s core competencies.32n/s Market attractiveness – size, growth, margins Quality of launch effort – planning and resources Tech. competencies and execution of technical activities.26.32

Winners vs. Losers The Cornerstones of Performance : 1)A High-Quality NPD Process 2)A Defined NPD Strategy for the Business 3)Resource Commitment

Introduction to NPD Why is NPD an exciting topic? What separates the winners from the losers? Why does NPD matter?

Well-managed NPD processes are a significant source of performance improvement Decrease Development Time by 30-70% Reduce # of Engineering Changes by 65-90% Reduce Time-to-Market by 20-90% Increase Overall Product Quality by % Increase White Collar Productivity by % Increase Dollar Sales by 5-50% Increase Return on Assets by % Source: Product Leadership (2000) Robert Cooper

PDMA Best Practices Survey (’97) The Best: average 49% of sales from products < 5 yrs old have a success rate over 80% Use stage/gate processes more extensively (& more stages) reward team non-financially in public and private ways innovate in their use of market research and engineering design tools Source: Drivers of NPD Success: The PDMA Report

Introduction to NPD Why is NPD such an exciting topic? Introductions Why does NPD matter? The NPD Process

Phase 1: Opportunity Identification and Selection Phase 2: Concept Generation/ Ideation

The NPD Process Phase 1: Opportunity Identification and Selection Phase 2: Concept Generation/ Ideation Phase 3: Concept Evaluation & Screening Phase 4: Development

The NPD Process Phase 1: Opportunity Identification and Selection Phase 2: Concept Generation/ Ideation Phase 3: Concept Evaluation & Screening Phase 4: Development Phase 5: Testing & Launch “Fuzzy” Front End

The NPD Process