New Product Development
Harryadin Mahardika, PhD
• Pop Economist
• FEUI & laporsuap.com
• Research objective:
– “to liberate and empower consumer...”
• Current research:
– Consumer empowerment
– Consumer intervention/engineering
– Mobile advertising
– firstname.lastname@example.org / email@example.com
Why study new products?
Gartner Hype Cycle 2012
Why Study New Products?
• Innovation as an Investment: A successful new
product does more good for an organization than
anything else that can happen
– Investment in innovation is critical to firm growth
and even survival.
– Radical innovations (those that displace or
obsolete existing products) are particularly crucial
to the firm.
– Technology leaders view “business growth
through innovation” as a major challenge facing
Global Product Development
• Increased globalization make NPD even more
– Procter & Gamble products are developed globally in the
firm’s 22 research centers located in 13 countries.
Market research and testing of the Swiffer mop occurred
in the U.S. and France.
– Ikea identifies unmet customer needs and commissions
in-house and outsourced designers to compete for the
design. Worldwide manufacturing partners compete for
the manufacturing rights. The firm also has excellent
global logistics for product delivery to stores and
What Is a New Product?
• New-to-the-world (really-new) products (10% of
new products): Inventions that create a whole new
market. Ex.: Polaroid camera, Sony Walkman, Palm
Pilot, Rollerblade skates, P&G Febreze and Dryel.
• New-to-the-firm products (20%): Products that take a
firm into a category new to it. Ex.: P&G brand shampoo or
coffee, Hallmark gift items, AT&T Universal credit
card, Canon laser printer.
• Additions to existing product lines (26%): Line
extensions and flankers that flesh out the product line in
current markets. Ex.: Tide Liquid, Bud Light, Apple’s
iMac, HP LaserJet 7P.
What Is a New Product?
• Improvements and revisions to existing products
(26%): Current products made better. Ex.: P&G’s
continuing improvements to Tide detergent, Ivory soap.
• Repositionings (7%): Products that are retargeted for a
new use or application. Also includes retargeting to new
users or new target markets. Ex.: Arm & Hammer baking
soda sold as a refrigerator deodorant; aspirin repositioned
as a safeguard against heart attacks; Marlboro retargeted as
a man’s cigarette.
• Cost reductions (11%): New products that provide the
customer similar performance but at a lower cost. May be
more of a “new product” in terms of design or production.
The Conflicting Masters of New
• Three inputs to the new
products process: the right
quality product, at the right
time, and at the right cost.
• These conflict with each
other but may have
• Issue: how to optimize these
relationships in a new
The Basic New Product Process
Phase 1: Opportunity Identification/Selection
Phase 2: Concept Generation
Phase 3: Concept/Project Evaluation
Phase 4: Development
Phase 5: Launch
The Evaluation Tasks in the New
Where should we look?
Is the idea worth screening?
Should we try to develop it?
Have we developed it?
Should we market it?
The Life Cycle of a Concept
Corresponding New Products Process Phases:
Opp. Identification Concept Generation Project Evaluation Development Launch
Co-opetition: Compete and collaborate
• Formed by a set of companies with shared interests for
• Clear objectives in terms of performance targets and life cycle
• Required capabilities should be available in the mix of
• Value-added by a partners are seamlessly integrated
• Information and knowledge sharing
• Visible rules of Governance