1. New Product Development and Innovation in B2B Markets
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2. Consumer Market Offering
Product characteristics
Design
Brand
Quality
Packaging
Pre-sales services (limited)
During sale services (limited)
After sale services
Warranties
Customer support (limited)
Payment/Credit conditions

3. Market Offering in B2B Trust Product quality Supply flexibilities
Cooperation
Communication
Ease of doing business
Return polices
Responsiveness
Frequency of customer visits
… many others
Product quality
Process quality of the suplier
Technical
capabilites of the
supplier
Delivery timing
Pre-sales services
During sales services
After sales services

4. What is Product Management?
Product management is an interdisciplinary role aims to plan, design, and continuously bring better products to market.
A set of responsibilities to uncover customer problems and making critical product decisions.
Successful product management is a separate function that requires business insight, a deep understanding of marketing and product knowledge.
Product managers are responsible for setting a product vision, defining a product strategy and developing a roadmap that meets both company goals and customer needs

5. What is Product Management?

6. Product Manager

7. Roles of a Product Manager
To set the long-term vision and strategy for the company’s products.
To manage from concept, to design, sample production, testing, forecast, cost, mass production, promotion, support, and finally product end of life.
Achievement of growth objectives including market share, revenue, profit and return on investment for all the channels/categories of business and/or key customers.
Responsible for managing and implementing marketing activities through research, strategic planning and implementation.

8. Solutions-Driven Product Management
B2B is no longer in the business of products.  Integrated solutions are the name of the new game.
Product planning and development priorities should think integrated “solutions” instead of “products”
Data security solutions for banks…customer service solutions for telecom…document management solutions for healthcare…B2B marketer should see the big picture.

9. Traditional New Product Development Model
Idea Generation
Product Screening
Business Case Analysis
Product/ Strategy/Plan Dev.
Test Market
Product Launch
Hand off to innovation/ translation team
Stage 1
Stage 4
Stage 5
Stage 7
Stage 2
Stage 3
Stage 6
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10. New Product Development Classic
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11. Idea Generation & Screening
New ideas can come from anywhere.
- customers
- suppliers
- technical department
- marketing department
- the sales team or
- anyone else within the company.
Ideas must then be screened––a process that is best carried out within the company, where internal experts know what is technically feasible.
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12. Business Analysis...
Product description – a detailed explanation of the product including:
- purpose of the product,
- technical specifications,
- market drivers,
- barriers,
- competitive environment, etc.
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13. Business Analysis...
Project justification – a breakdown of the market size and potential in terms of:
the total addressable market (i.e. notional spend from all audiences who could be customers of the new product);
the served available market (i.e. current spend on all products with which the new product would compete);
pricing strategy and revenue potential.
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14. Business Analysis
Project plan – next steps and criteria for successful product launch:
Technical and manufacturing feasibility
CAPEX requirements
Risks
Costs
Timings
Annual sales targets
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15. Physical Product Development
Once the product features are specified product is now technically designed
Supplier involvement in the new product development process is a key concept in B2B
Early Supplier involvement (ESI) is the concept of involving suppliers early in the product design process.
This increase product quality, decrease costs, decrease development duration
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17. Cooperation of buyer & seller
B2B new product development is a cooperative environment between seller & buyer
In many B2B interactions, customers are active partners of the product development process
Product/services are mostly modified according to special needs of different customers
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18. Physcial Product Development
This is development of the physical product.
Prototypes are created for review, and the manufacturing and marketing plans delineated.
A quick and small scale customer review of the prototype so as to identify any major potential flaws in the product as early as possible.
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20. Test & Validation
Once sufficient prototypes have been made, it is highly recommended that the product is tested in the field. Software is typically put through a “beta” test.
Industrial products can be placed with potential customers for them to trial and then comment on their likelihood to buy the product if it were on the market.
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21. Launch & Monitor
The final stage kicks off the commercialization of the product with full-scale production.
Some companies choose to carry out further research upon launch of the new product to monitor its uptake and keep a pulse on its “health” within the market.
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22. Notes on Product Development: Customer/Market Orientation
Two development approaches:
Engineering Driven
Market/Customer Driven
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23. Notes on Product Development: Team Approach
Cross functional approach
- Lead usually by Product Managers
- Several departments involved
- Difficult to manage
- Complex interactions
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24. Role of Marketing in Product Development
Understand the technology in depth
Define and redefine current and future customer needs and guide development
Motivate other company departments and organizations
Screen and select ideas from all sources
Reward the efforts of the technical and support staff
Catalyze company resources to get the right talent on the job
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25. Why Do New Products Fail?
The missing marketing plan
No real need exists
The market size is overestimated or a “Me Too” product fails to penetrate the market
The offering fails to meet needs adequately
Market will not pay
Contrary perceptions of innovation
A good marketing plan is a
solution to all of these!
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26. Innovation….
…is defined as using new knowledge to transform organizational processes or create commercially viable products and services

27. Innovation and business
Some students may benefit from a brief comment on why innovation is so important to business
Some example of quotes
"Business has only two functions, innovation and marketing." Peter F. Drucker
“Creativity is thinking up new things. Innovation is doing new things.” Theodore Levitt (management guru)
Innovation distinguishes between a leader and a follower.“ Steve Jobs

28. Competing Through Innovation
Innovation is very important for a firm survival
Innovative product development creates value for the customer
Innovation creates competitive advantage
Innovation performance increase market and financial performance of the company
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29. Innovation does not happen by itself
It is the result of hard work, well planned and executed and is no happening
Innovation is work rather than genius,…and very much a matter of discipline (Peter F. Drucker, 1985)

30. Table 1.4 Twentieth-century technological innovations

31. Types of Innovations Product innovation Process innovation
A good or service that is new or significantly improved. This includes significant improvements in technical specifications, components and materials, software in the product, user friendliness or other functional characteristics.
Process innovation
A new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software.
Marketing innovation
A new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing.
Organisational innovation
A new organisational method in business practices, workplace organisation or external relations. 31

32. Innovative Strategies
Incremental innovations take the existing product and offering and make small-step improvements
Radical innovations produce large changes in the functions and performance of a product or offering
Breakthrough innovations create a different kind of product or offering that produces a new kind of value
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33. INNOVATION PROCESS Research and development (R&D) Production Marketing
Innovation is an opportunity for something new, different. It is always based on change.
Innovators do not view any change as a threat but as an opportunity

34. 3 Key Function of Innovation
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35. Customer Involvement to Innovation Process
Customer and market knowledge is critical for innovation process
Customer involvement to process is getting widespread in many companies
Fast, accurate marketing research techniques for better customer inolvement
Online technologies, web, virtual design and test techniques can be used
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36. Lead User Method
The Lead User Method is a market research tool that may be used by companies and / or individuals seeking to develop breakthrough products.
Lead users are creative users  of a product or service that currently experience needs still unknown to the public.
Methodology should be integrated into corporate new product development efforts

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38. Creating the “Right” Environment for Innovation
Structural Variables
Adopt an organic structure
Make available plentiful resources
Engage in frequent interunit communication
Minimize extreme time pressures on creative activities
Provide explicit support for creativity

39. CHARACTERISTICS OF SUCCESSFUL INNOVATING COMPANIES
Cooperation with external experts (universities, research laboratories…)
Proper rate of risk-taking
Employees’ motivation (the employees are willing to improve the product and the operation of the whole company)
Continued education of employees
Ability to finance the innovation activities

40. Creating the “Right” Environment for Innovation (cont’d)
Cultural Variables
Accept ambiguity
Tolerate the impractical
Have low external controls
Tolerate risk taking
Tolerate conflict
Focus on ends rather than means
Develop an open-system focus
Provide positive feedback

41. Creating the “Right” Environment for Innovation (cont’d)
Human Resource Variables
Actively promote training and development to keep employees’ skills current.
Offer high job security to encourage risk taking.
Encourage individual to be “champions” of change.
Hire people who are creative, innovative and team-worker.
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42. Practical Aspects of Accomplishing Innovation: Providing Incentives for Innovation
Providing a range of incentives needs to be considered
Award the incentives for doing the right things
To reinforce the desired activity, provide rewards soon enough after actions occur

43. Innovation Case Lightest material ever
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