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Idea development
This document provides an overview of the new product development process, including key phases and considerations. It discusses defining problems from the customer perspective by understanding customer jobs, pains, and gains. Various screening and testing methods are presented for evaluating new product concepts, such as focus groups, prototyping, and market testing. Business planning elements like financial forecasts, target setting, and launch checklists are also reviewed. Finally, common causes of new product failures are summarized, emphasizing the importance of understanding customers, markets, and competitors to develop successful new offerings.
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Idea development
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- 2. Who are theyand what did they create?
- 3. “That’s an amazinginvention, but who would ever want to use one of them?” (US President Rutherford B. Hayes, after participating in a trial telephone conversation between Washington and Philadelphia in 1876). “Television won’t be able to hold onto any market it captures after the first six months. People will soon get tired of staring into a box every night (Darryl F. Zanuck, Head of 20th Century Fox, 1946) Don’t believe the experts
- 4. “The horse ishere to stay, but the automobile is only a novelty, a fad” (President of Michigan Savings Bank, 1903, advising Henry Ford’s lawyer not to invest in the Ford Motor Company – disregarding the advice, he invested $ 5,000 in stock, which he sold several years later for $ 12,5 million). “I think there is a world market for about five computers (Thomas J. Watson Sr., Chairman of IBM, 1943) Don’t believe the experts
- 5. Definition Development of original products,product improvements, product modifications, and new brands through the firm’s own R & D efforts
- 6. The lean mindset Learn Measure Build •Continuous improvement is the key principle • Question every assumption • Get out of the office. Go out an learn in the real world – meet and talk with potential customers
- 7. The lean mindset •Push hard as long as you can but know when to pivot or stop
- 8. The lean mindset •Fail fast and learn fast −Lean is not a linear process – it’s a fluid one −If you need to its always possible to go back stages −Make sure you make decisions quickly though
- 9. New product developmentphases Empathise Define the problem Ideate Idea screening Concept development and testing Marketing strategy development Business case Product development Test Marketing Commercialisation
- 10. Design thinking andidea development
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- 12. Customers (potential customers) CustomerJobs – (activities) Jobs describe the things your potential customers are trying to get done. These could be tasks they are trying to perform, problems they are trying to solve or needs they are trying to satisfy It is important to acknowledge that not all jobs / activities have the same importance Angle Tip When carrying out potential customer research its important to first identify who your potential customers might be. Don’t waste your time asking people their views on products or services that they will not buy. •For example, mowing the lawn, playing a sport Functional Jobs •When a customer wants to look good or gain power status •For example – brand aspiration – Ferrari, Hugo Boss Social Jobs •When customers seek a specific emotional state such as peace of mind or feeling secure •For example – private healthcare Personal jobs Supporting Jobs • Buyer of value – physically choosing and purchasing • Cocreator of value – those that leave feedback • Transferrer of value – reselling a product, upcycling a product
- 13. Customer pains • Anythingthat annoys customers before, during or after trying to get a job (activity done). • Pains also describe risks – potential bad outcomes related to getting a job (activity) done badly • Function – this does not work properly • Social – I look bad in this • Ancillary – its annoying Undesired outcomes, problems and characteristics • These are things that prevent customers from starting their activity – I can’t afford it, I don’t have the time Obstacles
- 14. • Example triggerquestions: −How do your customers define too costly? Too much time, money or effort? −What makes your customers feel bad? What are the frustrations or annoyances? −How are current products / services underperforming? What features are missing? Are there performance issues? −What are the main difficulties and challenges your customers encounter? −What risks do your customers fear? −What’s keeping your customers awake at night? −What are the barriers your potential customers face when adopting your product?
- 15. • Customer gains −Gains describe the outcomes and benefits your customers want. Some gains are required, expected and some are desired and some would even surprise them. •These are gains without which the solution would not work •For example, a smartphone making a phone call Required gains •Relatively basic gains that we expect •For example – an iphone being well designed and looking good Expected gains •These are gains that go beyond what we expect •For example – our smartphone to sync with other areas of our life – e.g. email Desired gains Unexpected gains • These are gains that go beyond customer expectation and desire
- 16. The value map Listall products and services Outline pain relievers Outline gain creators
- 17. Products and ServicesGain Creators Pain Relievers • Products and services − This is simply a list of what you offer − Physical (products) − Intangible (services) − Digital − Financial • Gain creators −Describe how your products and services create customer gains −Focus on the most relevant and important gains where you can make a difference −Typically saving time, money, effort • Pain relievers −Describe how your products or services alleviate customer pains −Again focus on the most relevant ones −Typically −Underperformance −Cost, time, effort
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- 19. Screening the Idea •Once all viable ideas are gathered and managed, they must be further developed, examined, prioritized and evaluated so that a single product idea is selected for further development into a product concept. This whole process is called screening and is the main problem to solve in this level using different tools and techniques.
- 20. Screening the Idea •Two potential risks in screening • Dropping ideas too early means missed opportunities! • Developing the "wrong" ideas means wasted resources in terms of time, financial investments and may risk your activities with your current portfolio
- 21. Early stage productdevelopment
- 23. Tools and Solutions AssessingNew Product Feasibility Is there a need? Is it real? Will the customers buy? Will it satisfy the market? Is the product real? Can it be made? Differentiation? Can we win? Low cost position? Industry structure? Company competitive? Organizational effectiveness? Is the return adequate? Is it worth it? Is the risk acceptable? Supports company's objectives?Satisfy other needs? Other factors?
- 24. Market Research tohelp screening Wider world Industry Competition Customers
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- 26. How can conceptsbe tested? • Focus Groups • One-on-One Personal Interviews • Phone Interviews • Postal Surveys • Internet Surveys • Hybrids (e.g., phone-mail-phone) • Prototyping & Rapid prototyping • Alpha, Beta & Gama Tests
- 27. The “Mom” test •Avoid asking customers questions that if they asked their own mum she would lie to them. • Instead only ask questions that would mean she would tell the truth −Stop fishing for compliments – avoid questions like “do you like it”? −Focus on the customer needs not your product −Stop pitching – don’t describe the features of your solution as if you are on a sales call. −Listen and learn about your customers and their challenges −Don’t ask questions about the future – questions such as “would you buy this product” and “how much would you pay” are not very useful. −Its better to run experiments to test their willingness to pay.
- 28. What tests couldyou carry out? • Pick some tests which would check: −Whether its feasible −Whether its desirable −Whether its viable
- 29. Product development • Whathave we learnt from our customer discovery and validation testing? • How do we improve the product to make it more appealable? • Are we addressing the right pains and creating the most important gains?
- 30. Pivot, Persevere, Stop Seventypes of pivot possibility 1. Customer segment pivot – changing your customer focus 2. Customer need pivot – changing the way you potentially market 3. Zoom in pivot – focusing on one specific part of the business 4. Zoom out pivot – creating a wider focus 5. Value chapter pivot – this is a change in the revenue model 6. Channel pivot – a change in how you reach or distribute to your customers 7. Technology pivot – utilising different technology to deliver the idea
- 31. Launch Strategy Customer has neverheard of me Customer has heard of me Customer starts to listen Customer makes decision Customer buys
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- 33. Where are you now? Wheredo you want to go? How are you going to get there The business plan
- 34. The business plan Doyou know? Who What WhyHow When
- 35. Business planning -contents 1. Executive Summary 2. Market Research 3. Products and services 4. Marketing and Sales 5. Operational Plan 6. Management 7. Financial Plan / Forecasts
- 36. YR3 £K £k ? ? £k £k ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Curre nt year YR1 YR2 ? ? ? ? ? ? ? ? 3 0 ? ? ? ?? ? ? ? ? ? Gross Margin Net Profit Business Value Personal Income Turnover Set 3 year targets for them. Business case – vision orbit
- 37. Business case • Roadmapping EU Launch UK Launch Soft Launch TestingR&D Month 1 Month 6 Month 12 Month 18 Month 36
- 38. Product launch checklist 1.Have I analysed the competition and understood the market size? 2. Do you understand who you are targeting and why they would buy it? 3. Have you built a landing page / social media business page? 4. Have you created a journey with your marketing that leads your customers along a specific path to a sale? 5. Have you set specific and achievable goals for the short term, medium term and maybe even long term? 6. Have you planned a big launch date and is this related to anything else that’s going on in the outside world?
- 39. Causes of NewProduct Failures • Overestimation of Market Size • Product Design Problems • Product Incorrectly Positioned, Priced or Advertised • Costs of Product Development • Competitive Actions • To create successful new products, the company must: − understand it’s customers, markets and competitors − develop products that deliver superior value to customers.
- 40. Summary • New ProductDevelopment can be a costly, timely and ultimately unsuccessful process • Plan each stage of the process and do not underestimate the time the whole process will take • Listen to customer / potential feedback. Remember customers should be at the heart of everything you do • Do you need to do NPD? Can you innovate existing products or reach new markets?