1. NEW PRODUCTS MANAGEMENT Merle Crawford Anthony Di Benedetto 10 th Edition McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Chapter 05 Finding and Solving Customers’ Problems 5-2

3. Problem-Based Concept Generation 5-3

4. Problem Analysis: General Procedure 1. Determine product or activity category for study. 2. Identify heavy users. 3. Gather set of problems associated with product category. –Avoid “omniscient proximity” — rate importance of benefits and levels of satisfaction. 4. Sort and rank the problems according to severity or importance. 5-4

5. Problem Analysis Applied to the Cell Phone Keeping the unit clean. Breaks when I drop it. Battery doesn’t stay charged long enough. Finding it in dark. Battery dies in mid- conversation. Who “out there” hears me? Dropped calls. Looking up numbers. Voice fades in and out. Hard to hold. Health risks? Can’t cradle between ear and shoulder. Antenna breaks off. Flip cover breaks off. Disruptive instrument. Can’t see facial/body language. Rings too loud/too soft. Wrong numbers. Fear of what ringing might be for. 5-5

6. The Bothersomeness Technique of Scoring Problems 5-6

7. Problem Analysis: Sources and Methodologies Experts Published Sources Contacts with Your Business Customers or Consumers –Interviewing –Focus groups –Observation of product in use –Role playing 5-7

8. Example of Problem Analysis: Dyson’s Air Multiplier Fan Conventional fan problems: –Spinning blades chop airflow –Hard to clean –Blades can be dangerous to children –Fan tips over –Energy inefficient Air Multiplier: bladeless (uses technology adapted from hand dryers), and attractively designed. –Airstream is smooth and danger is eliminated –Low center of gravity eliminates tipping –Much more effective and efficient cooling –No blades to clean 5-8

9. Typical Questions for Problem Analysis Focus Groups What is the real problem here – what if the product category did not exist? What are current attitudes and behaviors of focus group members toward the product category? What product attributes and benefits do the focus group members want? What are their dissatisfactions, problems, and unfilled needs? What changes occurring in their lifestyles are relevant to the product category? 5-9

10. Observation and Role Playing in Problem Analysis Carmakers send their designers out to parking lots to watch people and how they interact with their cars (Ford called this “gorilla research”). Honda got insights as to how large the passenger compartments of their SUVs should be by observing U.S. families. Bausch and Lomb generated ideas on making contact lenses more comfortable by getting pairs of executives to act out skits in which they played the eyeball and the contact lens. 5-10

11. Problem Analysis in Action Toyota pickups were perceived as too small for North American tastes. Redesigned with a V8 engine and a much roomier passenger compartment. Domino’s Pizza, for years known for average quality but fast delivery, found that taste was frequently mentioned as a problem in focus groups. Intense product development led to a better pizza which is Domino’s new competitive position. 5-11

12. Scenario Analysis “Extending” vs. “leaping” Using seed trends for an “extend“ scenario Techniques: –Follow “trend people”/”trend areas” –“Hot products” –Prediction of technological changeover –Cross-impact analysis 5-12

13. Relevance Tree Form of Dynamic Leap Scenario 5-13

14. Wild Card Events and Their Consequences No-Carbon Policy: Global warming may cause governments to put high taxes on fossil fuels, shifting demand to alternative sources of energy. This changes the allocation of R&D investment toward alternative energy, possibly causes new “energy-rich” nations to emerge, and ultimately may lead to a cleaner environment for everyone. Altruism Outbreak: This is the “random acts of kindness” movement – solve social problems rather than leaving it up to the government. Schools and other institutions will revive due to community actions, and perhaps inner cities would be revitalized. Cold Fusion: If a developing country perfects free energy, it becomes prosperous overnight. It gains further advantages by becoming an energy exporter. 5-14

15. Solving the Problem Group Creativity Methods/Brainstorming Principles of Brainstorming: –Deferral of Judgment –Quantity Breeds Quality Rules for a Brainstorming Session: –No criticism allowed. –Freewheeling -- the wilder the better. –Nothing should slow the session down. –Combination and improvement of ideas. 5-15

16. Brainstorming Techniques Brainstorming circle Reverse brainstorming Tear-down Phillips 66 groups (buzz groups) Delphi method 5-16

17. Electronic Brainstorming Supported by GSS (group support systems) software. Overcomes many drawbacks of brainstorming (only one can talk at a time, fear of contributing, “social loafing”). Participants sit at networked terminals. Contributions are projected on screen, and also recorded (so no errors are made in transcription). Can be done over multiple sites via computer linkups or videoconferencing. Can handle larger size groups (into the hundreds). 5-17

18. Online Communities Any group that interacts using online social networking or a similar medium. –Open online communities (Facebook) –Lead user communities (http://www.tivocommunity.com)http://www.tivocommunity.com –Firm-organized communities (J&J’s http://www.babycenter.com) http://www.babycenter.com –Private online communities set up by service providers like MarketTools (under 500 members) –Proprietary online communities (thousands of members that statistically represent a target market) 5-18

19. Use of Online Communities Listen to the voice of the customer Monitor public communities and blogs to spot new trends and opportunities Establish rapport with customers and enable customer support Build emotional bonds with the customer 5-19

20. Online Community in Action: Del Monte Pet Food Division Working with MarketTools, analyzed data from millions of blogs, forums, and message boards, Identified biggest concerns of pet owners. Identified new customer segment (“Dogs Are People, Too”) Created invitation-only online community to encourage customer innovation (500 consumers) Community generated and refined ideas for new breakfast product. New product, Sausage Breakfast Bites, launched in half the normal time. 5-20

21. Drawbacks to Online Communities They are hard work Costly and time consuming (hire moderators and facilitators) Takes time for the community to mature Organizing the content so it is easy for the members to find Member privacy, confidentiality, content ownership, and other legal issues 5-21