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Learning Objectives
1. Examine the key activities of the NPD process
2. Explain that a product concept differs significantly from
a product idea or business opportunity
3. Recognize that screening is a continuous rather than a
single activity
4. Provide an understanding of the role of the knowledge
base on an organization in the new product
development process
5. Recognize that the technology intensity of the industry
considerably affects the NPD process
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NPD Terminology
The fuzzy front end
The messy getting started period of new product development
processes. It is the front end where the organization formulates a
concept of the product to be developed and decides whether or not
to invest resources in the future development of an idea
Business Opportunity
A possible technical or commercial idea that may be transformed
into a revenue generating product
Product Concept Screening
A physical form or a technology plus a clear statement of benefit
Specification
Precise details about the product, including features, characteristics
and standards
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NPD Terminology
Prototype/Pilot
A tentative physical product or system procedure, including features and
benefits
Production
The product produced by the scale up manufacturing process
Launch
The product actually marketed, in either market test or launch
Co-joint analysis
A method for deriving the utility values that consumers attach to varying
levels of a products attribute. E.g. Apple (i-Phone).
Commercialization
A more descriptive label would be market introduction, the phase when the
product is launched and hopefully begins to generate sales revenue
Commercial Success
The end product that meets the goals set for it, usually profit
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Technical Testing
Closely linked to the development of product
prototypes
An ongoing activity
E.g. Dummies and simulated crashed used in car on
the on going basis
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Pharmaceutical Industry
Electronics Industry
Marketing
Activities
Balance of Activities
Industrial Products
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Functional Company
Organization
Functional Company
Organization
Function 1
Product A
Senior
Management
Function 2
Product B
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Function 3
Functional Company
Organization
Diversification by
product with
centralized functions
Senior
Management
Product 1
Function 1
Function 2
Product 2
Function 1
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Product 3
Function 2
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Business
Team 1
Business
Team 2
Business
Team 3
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Tutorial
1. Explain why there is not one best organization structure
for new product development.
2. What are the way scientists view innovation and the
way marketing people view it?
3. New products are a necessary evil. From whose
viewpoint are they necessary and from whose
viewpoint are they evil?
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