New Product Development

                             Session 1: Introduction
                                        June...
Agenda
•   Let’s breaking the ice
•   “New Product” defined
•   Why study New Product Development?
•   Issues in New Produ...
Dr. Jay Jootar ดร. เจน จฑา
Professional
•    Current:      Venture Catalyst
                   NECTEC (Executive Board)
• ...
Agenda
•   Let’s breaking the ice
•   “New Product” defined
•   Why study New Product Development?
•   Issues in New Produ...
Newness defined
• New to the market
   – What are customer behavior towards new products?
• New to the company
   – How co...
Categories of New Product
•   New-to-the-world products
•   New product lines
•   Additions to existing product lines
•   ...
Drivers of New Product
•   Technology advances
•   Changing customer needs
•   Shortening product life cycles
•   Increase...
Agenda
•   Let’s breaking the ice
•   “New Product” defined
•   Why study New Product Development?
•   Issues in New Produ...
Success stories

Worldwide                        Thailand
• Apple Computer                 • Hi-speed Internet
• Microsof...
Apple Computer




                                                                            Windows 7


Question: Why d...
Microsoft Windows




MS DOS (on IBM PC)                     Windows 98                                   Windows 7


    ...
Microsoft Office




Question: How important is Microsoft Office to Microsoft as a company?




                          ...
Google




Question: How does Google make money?




                             © 2010 Dr. Jay Jootar
                  ...
iPod, iPhone, iPad




Question: What would happen to the competition between iPhone, Android, and Blackberry?




       ...
hi-speed internet




Question: What are the most important challenge facing True hi-speed in the near future?




       ...
Ragnarok




Question: What is the basis of competition in online game?




                                  © 2010 Dr. J...
Mama




       © 2010 Dr. Jay Jootar
                               Slides downloadable from www.vcthailand.com
Red Bull




Question: What is the basis of success for Red Bull?




                                  © 2010 Dr. Jay Joo...
Oishi Green Tea




        © 2010 Dr. Jay Jootar
                                Slides downloadable from www.vcthailand....
Pepsi Max/Diet Coke




Question: What would you do if you were Pepsi to grab more market share from Coke Zero?




      ...
New product driving financials
• New products (less than 5 years) account for
   – 33% of U.S. company sales, on average.
...
Product underlies other 3 P’s
Marketing


                                 Prom ot ion

                                  ...
Agenda
•   Let’s breaking the ice
•   “New Product” defined
•   Why study New Product Development?
•   Issues in New Produ...
High odds of failure




         © 2010 Dr. Jay Jootar
                                 Slides downloadable from www.vcth...
Shrinking life cycles




         © 2010 Dr. Jay Jootar
                                 Slides downloadable from www.vct...
Problems and Pitfalls
• A lack of market orientation
• Poor quality of execution
• Moving too quickly
• Not enough up-fron...
Lack of NPD process consistency




        © 2010 Dr. Jay Jootar
                                Slides downloadable from...
Two right things to do
A. Doing the right projects

B. Doing the projects right




              © 2010 Dr. Jay Jootar
  ...
Doing the right projects
•   The number one success factor is a unique
    superior product: a differentiated product that...
Doing the right projects
•   Leveraging core competencies is vital to
    success – “step-out” projects tend to fail

•   ...
Doing the right projects
•   Sharp and early product and project definition
    is one of the key differences between winn...
Doing the projects right
•   A strong market orientation – a market-driven
    and customer-focused new product process –
...
Doing the projects right
•   A well-conceived, properly executed launch is
    central to new product success. And a solid...
Doing the projects right
•   Top management support doesn’t guarantee
    success, but it sure helps. But many senior
    ...
Doing the projects right
•   The resource must be in place- there is no
    free lunch in product innovation.

•   Speed i...
Agenda
•   Let’s breaking the ice
•   “New Product” defined
•   Why study New Product Development?
•   Issues in New Produ...
Objective
1. Provide understanding of end-to-end
   management of new product development
   process
2. Equip with necessa...
Methods
Lecture
•   Background Theory
•   Methodology review and practice
•   Case examples

Papers
• Real business and ex...
Process-oriented Lecture

 Conceptualize                      Develop                  Launch


 Opportunity             ...
Class schedule
                                                       TOPICS                        Assignment Due
INTRODU...
Grade
Score breakdown                          Percent of total
Paper #1: Opportunity                          15
Paper #2...
Papers
•   Group of at most 4 students
•   Act as group of entrepreneurs eager for capital from
    investors with real ma...
Text Book
• Cooper, R. G., “Winning at New Products:
  Accelerating the process from idea to launch”,
  2001, Basic Books
...
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Session 01 introduction

  1. 1. New Product Development Session 1: Introduction June 6, 2010 © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  2. 2. Agenda • Let’s breaking the ice • “New Product” defined • Why study New Product Development? • Issues in New Product Development • Course plan © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  3. 3. Dr. Jay Jootar ดร. เจน จฑา Professional • Current: Venture Catalyst NECTEC (Executive Board) • Finance: Asset Plus Securities, JP Morgan • Consulting: McKinsey & Co. • Hi-tech: ITT Industries, Intel Corporation, Envoy Network, Verizon Comm., True Corp Education • PhD: MIT Sloan School of Management • MBA: MIT Sloan School of Management • Bachelor of Engineering: Chulalongkorn University © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  4. 4. Agenda • Let’s breaking the ice • “New Product” defined • Why study New Product Development? • Issues in New Product Development • Course plan © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  5. 5. Newness defined • New to the market – What are customer behavior towards new products? • New to the company – How companies can manage the impacts of new product to the way they do things? © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  6. 6. Categories of New Product • New-to-the-world products • New product lines • Additions to existing product lines • Improvements and revisions to existing products • Repositionings • Cost reductions © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  7. 7. Drivers of New Product • Technology advances • Changing customer needs • Shortening product life cycles • Increased world competition © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  8. 8. Agenda • Let’s breaking the ice • “New Product” defined • Why study New Product Development? • Issues in New Product Development • Course plan © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  9. 9. Success stories Worldwide Thailand • Apple Computer • Hi-speed Internet • Microsoft Windows • Raknarok • Microsoft Office • Red Bull • Google • Oishi Green Tea • iPod, iPhone, iPad • Pepsi Max/Diet Coke © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  10. 10. Apple Computer Windows 7 Question: Why did Apple lost market share to Wintel (PC based on Intel hardware and Microsoft OS)? © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  11. 11. Microsoft Windows MS DOS (on IBM PC) Windows 98 Windows 7 Question: What are the other competing O.S. and how do they compare to Microsoft Windows? © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  12. 12. Microsoft Office Question: How important is Microsoft Office to Microsoft as a company? © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  13. 13. Google Question: How does Google make money? © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  14. 14. iPod, iPhone, iPad Question: What would happen to the competition between iPhone, Android, and Blackberry? © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  15. 15. hi-speed internet Question: What are the most important challenge facing True hi-speed in the near future? © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  16. 16. Ragnarok Question: What is the basis of competition in online game? © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  17. 17. Mama © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  18. 18. Red Bull Question: What is the basis of success for Red Bull? © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  19. 19. Oishi Green Tea © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  20. 20. Pepsi Max/Diet Coke Question: What would you do if you were Pepsi to grab more market share from Coke Zero? © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  21. 21. New product driving financials • New products (less than 5 years) account for – 33% of U.S. company sales, on average. – In some dynamic industries, the figure is 100%. – In top 22% of the U.S. benchmark firms, 49.2% of sales and profits are derived from new products • For successful new products, – average ROI is 96.9%, – payback period is 2.5 year, – and market share in their defined target markets is 47.3% © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  22. 22. Product underlies other 3 P’s Marketing Prom ot ion Place Price ( & Quant it y) Pr oduct Know ledge, Process & Syst em , Cult ur e Non-Marketing © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  23. 23. Agenda • Let’s breaking the ice • “New Product” defined • Why study New Product Development? • Issues in New Product Development • Course plan © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  24. 24. High odds of failure © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  25. 25. Shrinking life cycles © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  26. 26. Problems and Pitfalls • A lack of market orientation • Poor quality of execution • Moving too quickly • Not enough up-front homework • A lack of product value for the customer • No focus, too many projects, and a lack of resources • The lack of systematic new product process with discipline © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  27. 27. Lack of NPD process consistency © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  28. 28. Two right things to do A. Doing the right projects B. Doing the projects right © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  29. 29. Doing the right projects • The number one success factor is a unique superior product: a differentiated product that delivers unique benefits and superior value to the customer • Look to the world product – An international orientation in product design, development, and target marketing provides the edge in product innovation © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  30. 30. Doing the right projects • Leveraging core competencies is vital to success – “step-out” projects tend to fail • Products aimed at attractive markets do better: market attractiveness is a key project- selection criterion © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  31. 31. Doing the right projects • Sharp and early product and project definition is one of the key differences between winning and losing at new products • Successful businesses build tough Go/Kill decision points into their new product process, where projects really do get killed: better focus is the result. © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  32. 32. Doing the projects right • A strong market orientation – a market-driven and customer-focused new product process – is critical to success • More predevelopment work – the homework – must be done before product development gets under way © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  33. 33. Doing the projects right • A well-conceived, properly executed launch is central to new product success. And a solid marketing plan is at the heart of the launch • The right organizational structure, design, and climate are key factors in success © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  34. 34. Doing the projects right • Top management support doesn’t guarantee success, but it sure helps. But many senior managers get it wrong • New product success is controllable: More emphasis is needed on completeness, consistency, and quality of execution of key tasks from beginning to end of project © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  35. 35. Doing the projects right • The resource must be in place- there is no free lunch in product innovation. • Speed is everything! But not at the expense of quality of execution • Companies that follow a multistage, disciplined new product success fare much better © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  36. 36. Agenda • Let’s breaking the ice • “New Product” defined • Why study New Product Development? • Issues in New Product Development • Course plan © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  37. 37. Objective 1. Provide understanding of end-to-end management of new product development process 2. Equip with necessary tools for different stages in the process 3. Practice the skills for building a successful products/service © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  38. 38. Methods Lecture • Background Theory • Methodology review and practice • Case examples Papers • Real business and execution plan development © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  39. 39. Process-oriented Lecture Conceptualize Develop Launch  Opportunity Product  Pre-launch testing development  System Architecting and Planning  Market Space  Development process  Managing through Mapping Life-Cycle  Project Management  Product Decisions Marketing  Business Model  Pricing New Product Design  Sales and Channel  Marketing Strategy Management  Total Business  Marketing Case Development Communication © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  40. 40. Class schedule TOPICS Assignment Due INTRODUCTION 1 06-Jun-10 Introduction CONCEPT 2 13-Jun-10 Opportunity Development 3 20-Jun-10 Market Space Mapping 4 27-Jun-10 Positioning and Core Capabilities Assignment 1 5 04-Jul-10 Business Model Design 6 11-Jul-10 Marketing Strategy 7 18-Jul-10 Total Business Case Development DEVELOP Product 8 25-Jul-10 System Architecting 9 01-Aug-10 Development Process Assignment 2 10 08-Aug-10 Project Management Marketing 11 15-Aug-10 Pricing New Product 12 22-Aug-10 Sales and Channel Management 13 29-Aug-10 Marketing Communication LAUNCH 14 05-Sep-10 Launching new product 15 12-Sep-10 Business plan presentation Assignment 3 © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  41. 41. Grade Score breakdown Percent of total Paper #1: Opportunity 15 Paper #2: Business Model 25 Paper #3: Total Project Plan 35 Group Business plant presentation 15 Class participation 10 Individual 100 © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  42. 42. Papers • Group of at most 4 students • Act as group of entrepreneurs eager for capital from investors with real markets & products • Submit paper and present business case and execution plan to review for capital request • Potential for a real business after class © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com
  43. 43. Text Book • Cooper, R. G., “Winning at New Products: Accelerating the process from idea to launch”, 2001, Basic Books © 2010 Dr. Jay Jootar Slides downloadable from www.vcthailand.com

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