Downloaded 13 times
![8-17
BENETTON’S
STRATEGY TO REVIVE
APPAREL IDEA
GENERATION“We didn’t take advantage of the [industry’s] quick
transformation,” says Silvana Cassano, the ex-Fiat
manager who assumed the post of chief executive of
Benetton Group on May 5.
The transformation saw the best retailers turn
into cutting-edge users of digital technology.
Benetton’s competitors-notably Spain’s Zara and
Sweden’s H&M Hennes & Mauritz-have raised the bar
for the entire industry. These retailers can beam new
styles from the catwalk to the shop floor in less than a
month-and at bargain prices. Both deploy
sophisticated technology to track which items are
selling and which aren’t, so winners can be speedily
restocked and slow movers yanked down from the
racks. They’ve got the look down, too-cool and minimal
for the working women who love Zara, and over-the-
top trendy for H&M’s teen fans. And Benetton’s look?
Blan. “The Benetton brand is out of fashion,” says
Sagra Maceira de Rosen, retail analyst at J.P. Morgan
Chase & Co. in London.](https://image.slidesharecdn.com/jespi64yqrqkbrn78ggn-signature-d525cf9ee88ce6421158ca19680fb09999b0427ec7b5d8b75bdec04a5e0260e9-poli-160113104317/85/Chap008-17-320.jpg)
Uploaded byZaka Ul Hassan
Chap008
This document provides an overview of planning for new products. It discusses the importance of new products, outlines a typical customer-driven new product planning process with steps such as idea generation, screening, development and commercialization. It also notes there can be variations in the planning process depending on the type of new product. Key aspects of planning covered include developing an innovative culture, selecting an innovation strategy, and achieving cross-functional coordination.
More Related Content
Chap008
- 1. 8-1 Chapter Eight Planning for NewProducts McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc., All Rights Reserved.
- 2. 8-2 Planning for New Products TheInnovation Mandate
- 3. 8-3 PLANNING FOR NEW PRODUCTS Importance of New Products Customer Driven Process Steps in New Product Planning – Idea Generation – Screening/Evaluating/and Business Analysis – Product and Process Development – Marketing Strategy and Market Testing – Commercialization Variation in the Generic Planning Process
- 4. 8-4 Importance of New Products Innovation at top of potential value drivers (Ernst & Young) Innovation initiatives extend beyond new goods and services to include ideas, processes, and business practices Organizations must build a culture of innovation
- 5. 8-5 New Product Planning asa Customer Driven Process New product classifications: 1. Newness to market 2. Newness to company New product types: – Transformational innovations – New product category – Product line extensions – Incremental improvements
- 6. 8-6 High Low New product lines 20% Improvements/ revisions to existing products 26% Additions toexisting product lines 26% Repositionings 7% Cost reduction s 11% New-to-world products 10% High Newness to market Newnesstocompany Size of circle denotes number of introductions relative to total. Source: New Product Management for the 1980s, Booz Allen & Hamilton Inc. 1982.
- 7. 8-7 Customer value analysis Objectiveis to identify needs for: 1. New products 2. Improvements to existing products 3. Improvements in production processes 4. Improvements in supporting services Finding Customer Value Opportunities
- 8. 8-8 Matching Capabilities to CustomerValue Opportunities – Fit between capabilities and product offering Transformational Innovations – “new-to-the-world” ideas – Customers not always the best guides
- 9. 8-9 Customer Expectations Customer Satisfaction Gap Actual Product Performance OPPORTUNITIES (1) New Products (2)Improvements (3) New and Improved Processes
- 10. 8-10 Characteristics of Successful Innovations STRATEGIC INITIATIVES Creating an Innovative Culture Leveraging Capabilities Selectingthe Right Innovation Strategy Developing and Implementing Effective New Product Processes Making Resource Commitments
- 11. 8-11 Developing an Innovation Culture Innovation Workshop for top executives to develop an innovation plan. Innovation Statement highlighting objectives and senior management’s role and responsibilities. Training programs for employees and managers. Communicate the priority of innovation. Speakers to expose employees to innovation authorities. Source: Thomas D. Kuczmarski et al., “The Breakthrough Mindset,” Marketing Management, March/April 2003, 43.
- 12. 8-12 The Innovation Strategy SpellsOut Management’s Priorities for New Product Opportunities1. Set specific New Product Objectives. 2. Communicate the role of New Products throughout the organization. 3. Define the areas of strategic focus: Product Scope Markets Technologies 4. Include longer term discontinuous projects in the portfolio along with incremental projects. Source: Robert Cooper, “Benchmarking New Product Performance,” European Management Journal, Feb. 1998, 1-7.
- 13.
- 14. 8-14 Achieving Cross- Functional Interaction andCoordination R & D Operation s Marketing Finance
- 15. 8-15 Coordination ofnew product activities by a high-level general manager Inter-functional coordination by a team of new product planning representatives Creation of a project task force responsible for new product planning Designation of a new products manager to coordinate planning between departments Formation of matrix structure for integration new product planning with business functions Creation of a permanent design center Responsibility for New Product Planning
- 16. 8-16 Idea search:targeted or open- ended? How extensive and aggressive? What specific sources are best for generating a regular flow of new product ideas? How can new ideas be obtained from customers? Where will responsibility for the new product ideas search be placed? What are potential threats from alternative (or disruptive) technologies? IDEA GENERATION
- 17. 8-17 BENETTON’S STRATEGY TO REVIVE APPARELIDEA GENERATION“We didn’t take advantage of the [industry’s] quick transformation,” says Silvana Cassano, the ex-Fiat manager who assumed the post of chief executive of Benetton Group on May 5. The transformation saw the best retailers turn into cutting-edge users of digital technology. Benetton’s competitors-notably Spain’s Zara and Sweden’s H&M Hennes & Mauritz-have raised the bar for the entire industry. These retailers can beam new styles from the catwalk to the shop floor in less than a month-and at bargain prices. Both deploy sophisticated technology to track which items are selling and which aren’t, so winners can be speedily restocked and slow movers yanked down from the racks. They’ve got the look down, too-cool and minimal for the working women who love Zara, and over-the- top trendy for H&M’s teen fans. And Benetton’s look? Blan. “The Benetton brand is out of fashion,” says Sagra Maceira de Rosen, retail analyst at J.P. Morgan Chase & Co. in London.
- 18. 8-18 Cassano is outto change that. The message he delivered in his first encounter with shareholders was short and powerful: Benetton is going to refocus on the apparel business, which encompasses the Sisley and Benetton brands. It’s no secret that Benetton’s core casual wear business has suffered neglect. In 1994, founder Luciano Benetton launched an ill-fated diversification into sports equipment, snapping up trophy brands such as Prince (tennis rackets), Rollerblade (in-line skates), and Killer Loop (snowboards). But the strategy foundered and last year, Benetton sold the entire equipment division, booking $190 million in write-offs. The company posted its first annual loss-$10.5 million, on revenues of $2.3 million. Benetton’s Strategy (continued) Source: “Has Benetton Stopped Unraveling?” Business Week, June 30, 2003, 76.
- 19.
- 20. 8-20 IDEA GENERATION SCREENING (fit/feasibility) CONCEPT EVALUATION BUSINESSANALYSIS SCREENING, EVALUATING, AND BUSINESS ANALYSIS
- 21. 8-21 Business Analysis Revenue Forecasts Preliminary Marketing Plan Cost Estimation Profit Projections Other Considerations
- 22.
- 23. 8-23 Development ofthe new product includes: – Product design – Packaging design – Decisions to make or purchase product components Product Development Process: – Product Specifications – Industrial Design – Prototype – Use Tests – Process Development Collaborative Development Product and Process Development
- 24. 8-24 PURPOSE OF USE TESTS Does ithave the required attributes? Verify claims Ideas for improvements Identify use situations
- 25. 8-25 MARKETING STRATEGY AND MARKET TESTING Marketing Strategy Decisions – Market Targeting – Positioning Strategy Market Testing Options – Simulated Test Marketing – Scanner – Based Test Marketing – Conventional Test Marketing – Testing Industrial Products – Selecting Test Sites – Length of the Test – External Influences
- 26. 8-26 Less artificial thansimulated testing Costs less than full-scale market test Test is controlled by using IRI’s 2300 panel members in each test city Cable TV enables use of controlled ad testing Tests take about 12 months Costs are $250,000+ Scanner-based Test Marketing
- 27. 8-27 COMMERCIALIZATI ON The Marketing Plan –Complete marketing strategy – Responsibilities for execution – Cross – functional approach Monitoring and Control – Real – time tracking – Role of the Internet – Include product performance metrics with performance targets
- 28.
- 29. 8-29 Technology Push Processes Platform Products Process – Intensive Products Customized Products VARIATIONS IN THE GENERIC NEW PRODUCT PLANNING