Evaluate new product concepts (as they begin to come in) on technical, marketing, and financial criteria. Rank them and select the best two or three. Request project proposal authorization when have product definition, team, budget, skeleton of development plan, and final PIC.
The Evaluation System
Consists of 4 Concepts:
- Rolling Evaluation: - Project is assessed continuously (rather than a single Go/No Go decision) - Financial analysis also needs to be built up continuously - Not enough data early on for complex financial analyses - Run risk of killing off too many good ideas early - Marketing begins early in the process Key: new product participants avoid "good/bad" mindsets, avoid premature closure
- Potholes: Know
what the really damaging problems are for your firm and focus on them when
evaluating concepts. Examples:
–Campbell Soup focuses on manufacturing cost and taste.
–Drug companies focus on FDA approval.
–Software developers may focus on customer unwillingness to learn how to use complex software. - People: • Proposal
may be hard to stop once there is buy-in on the concept. • Need tough demanding hurdles, especially late in new products process.
• Personal risk associated with new product development.
• Need system that protects developers and offers reassurance (if warranted). - Surrogates: Surrogate questions give clues to the real answer.
A Tool for Concept Evaluation
Strategic Fit
Does the concept fit with corporate vision?
Customer Fit
Does the concept allow the customer to better meet consumer needs?
Consumer Fit
Does the concept satisfy an unmet consumer need?
Market Attractiveness
Is the concept unique relative to competition?
Technical Feasibility
Is the concept feasible and protect-able?
Financial Returns
Will the project break even soon?
Does the concept fit with corporate vision?
Customer Fit
Does the concept allow the customer to better meet consumer needs?
Consumer Fit
Does the concept satisfy an unmet consumer need?
Market Attractiveness
Is the concept unique relative to competition?
Technical Feasibility
Is the concept feasible and protect-able?
Financial Returns
Will the project break even soon?
Marketing Research Tools
Engineering Tools
Organization Tools
- Voice of Customer
- Customer Site Visits
- Concept Tests
- Focus Groups
- Beta Testing
- Conjoint Analysis
- Test & Pre-Test Markets
Engineering Tools
- Rapid Prototyping
- Concurrent Engineering
- Design for Manufacturing
- CAD
- CAE
- Value Analysis
- FMEA
- Performance Simulation
- Virtual Design
Organization Tools
- GANNT Chart
- Process Owner
- Team Building Dril;
- Self Directed Teams
- Matrix Organization
- QFD (Quality Function Deployment)
Financial Tool
A-T-A-R Model
Profits = Units Sold x Profit Per Unit
Units Sold = Number of buying units
x % aware of product
x % who would try product if they can get it
x % to whom product is available
x repeat measure (what is the average number of units bought per person per year, including repeats)
x Number of units repeaters buy in a year
Profit Per Unit = Revenue per unit - cost per unit
Definitions:
• Buying Unit: Purchase point (person or department/buying center). Person, home, purchasing manager, family, etc.
• Aware: Has heard about the new product with some characteristic that differentiates it. Is the buying unit sufficiently informed to stimulate trail (i.e., are they knowledgeable enough?)
• Available: If the buyer wants to try the product, the effort to find it will be successful (expressed as a percentage). Can the buyer easily get the new product? (i.e., can be % of outlets carrying product, or all commodity volume which is the % of the market that has access to the product in local distribution channels).
• Trial: Usually means a purchase or consumption of the product. Can be actual in home trial, on site trial, vicarious trial depending on the product type and it usually requires some expense to get the trial supply, and enough time to decide whether the product was any good.
• Repeat: The product is bought at least once more, or (for durables) recommended to others. Is actually a measure of how successful the trial was and how pleased the buying unit is (i.e., Can be the actula repeat rate, or a proxy could be a statement of satisfaction level or how likely the buying unit would recommend it to others).
Units Sold = Number of buying units
x % aware of product
x % who would try product if they can get it
x % to whom product is available
x repeat measure (what is the average number of units bought per person per year, including repeats)
x Number of units repeaters buy in a year
Profit Per Unit = Revenue per unit - cost per unit
Definitions:
• Buying Unit: Purchase point (person or department/buying center). Person, home, purchasing manager, family, etc.
• Aware: Has heard about the new product with some characteristic that differentiates it. Is the buying unit sufficiently informed to stimulate trail (i.e., are they knowledgeable enough?)
• Available: If the buyer wants to try the product, the effort to find it will be successful (expressed as a percentage). Can the buyer easily get the new product? (i.e., can be % of outlets carrying product, or all commodity volume which is the % of the market that has access to the product in local distribution channels).
• Trial: Usually means a purchase or consumption of the product. Can be actual in home trial, on site trial, vicarious trial depending on the product type and it usually requires some expense to get the trial supply, and enough time to decide whether the product was any good.
• Repeat: The product is bought at least once more, or (for durables) recommended to others. Is actually a measure of how successful the trial was and how pleased the buying unit is (i.e., Can be the actula repeat rate, or a proxy could be a statement of satisfaction level or how likely the buying unit would recommend it to others).
Product Protocol
Why Have A Protocol ?
• Also known as product requirements, product definition, deliverable, etc.
• Doesn't it seem obvious and simple?
• Actually is one of the top success factors distinguishing winning from losing projects.
• Maybe because it involves more than technical aspects.
Contents of a Product Protocol:
•Target market
•Product positioning
•Product attributes (benefits)
•Competitive comparison
•Augmentation dimensions
•Timing
•Marketing requirements
•Financial requirements
•Production requirements
•Regulatory requirements
•Corporate strategy requirements
•Potholes
Protocol Within the New Products Process
• Also known as product requirements, product definition, deliverable, etc.
• Doesn't it seem obvious and simple?
• Actually is one of the top success factors distinguishing winning from losing projects.
• Maybe because it involves more than technical aspects.
Contents of a Product Protocol:
•Target market
•Product positioning
•Product attributes (benefits)
•Competitive comparison
•Augmentation dimensions
•Timing
•Marketing requirements
•Financial requirements
•Production requirements
•Regulatory requirements
•Corporate strategy requirements
•Potholes
Protocol Within the New Products Process