NEW PRODUCT

DEVELOPMENT PROCESS
Stage Gate Process
Gate 1: Stage 1 :

• First decision to commit resources, • Quick review of project,

signaling tentative commitment; • Looking at technical and marketplace
merits
• Criteria tend to be qualitative and few in
number:
• strategic alignment,
• Technical feasibility,
• competitive advantage,
• opportunity attractiveness
Gate 2: Stage 2 :

More rigorous screen; Development of business case to

commitment of resources more substantial;
often a scoring model is used to measure
• synergies,
• market attractiveness,
• competitive situation,
• product advantage,
• profit potential
verify attractiveness ,
studies may include:
• User needs/wants;
• competitive analysis;
• concept testing;
• technical and manufacturing appraisal;
• legal, patent and regulatory assessment;
• Detailed financial analysis
Gate 3: Stage 3 :

• Last point to kill project before heavy spending;
• sign off product specification;
• pass criteria should be tough and rigorous
• Deliverable at end of this stage is a lab-tested
prototype;
• emphasis is on technical work,
• marketing and manufacturing activities run
parallel
 Stage 4:
Gate 4:
• Testing and validating:
• Recheck continued attractiveness of • The product itself,
project; production process,
• check against product specification and • customer acceptance,
performance expectations • economies;
• Activities may include:
• in-house product test checks (quality and performance);
• user field trials;
• pilot production;
• pre-test market;
• revised financial analysis
Gate 5: Stage 5:

• Criteria here are largely on quality of efforts to • Putting marketing launch plan and production or
date, appropriateness of the production and operations plan in motion
launch plans, financial viability
Technology Push Vs Need Pull Models

Consumer
Technology Push Vs Need Pull Models
Technology Push model
• The introduction of new technology aids the development of new
product. The firm conducts research and development, production
and sales to push the product to market without due consideration of
‘user needs’

• It is based on perceived market need

Need Pull model
• Inspiration for the products comes from consumer needs, and
research and development improves the existing products or
creates new products that satisfy an existing market need.

• It is based on identified market needs

 Challenges in new product development
• Ideation and product design
• Generation of workable ideas and need for diverse information for idea generation
• Screening and evaluation and selection of ideas leading to further concept development
and testing.
•
• Dynamic environment
• Product design and development cycle takes its own time.
• In this duration technologies and consumer needs evolve, economic environment shifts
and competitors may introduce similar products.

• Workflow management
• Inter-team and inter-departmental collaboration
• Synergy between collaborating teams affects the development speed and quality of the
final product.
 Challenges in new product development contd..

• Global competition
• Assessment of global market competition.
• Global strategic collaborations
• Product design and development with due consideration to host country
social and cultural factors.

• Technological changes
• Fast pace of technological changes
• Impacts the product design and functionality
• Technological changes impacting the related production processes
Activity: Benefits vs features
• Fruit Salad Example
• Features-Based
• Enjoy XYZ’s new fruit salad
• With an array of different fruits
• Fruits are cut into pieces
• And not cooked
• Served in a plastic container
• They are chilled for your
enjoyment
Benefits-Based
• Enjoy XYZ’s new fruit salad
• With an array of delightful tastes and
textures, that come in easy-to eat, bite-size
pieces
• And they are all natural and fresh
• Easy to eat anywhere
• And they are always cool and refreshing