New Product Development

(NPD)
New Product Development Process
• Market Analysis
• Product Strategy
• Product Idea Generation & Screening
• Concept Development & Testing
• Business Analysis
• Market Strategy Development
• Product Development
• Product Testing (In-house)
• Product Testing (Consumer)
• Test Marketing
• Commercial Launch
 NPD Models
• Waterfall Model/Step-By-Step Sequential Model
(Linear Model)
• Modified Waterfall Model
• Stage Gate (Phase Gate) Model
• Multiple Convergence Model
• Iterative or Spiral Model
• Incremental Model
• Iterative + Incremental Model
• Agile Scrum Model
 Predictive NPD Models
• Waterfall Model/ Step-By-Step Sequential
Model (Linear Model)
• Modified Waterfall Model
• Stage Gate (Phase Gate) Model
• Multiple Convergence Model
 Adaptive NPD Models
• Iterative or Spiral Model
• Incremental Model
• Iterative + Incremental Model
• Agile Model
Step-By-Step Sequential Model (Linear
Model)
• Market Analysis
• Product Strategy
• Product Idea Generation & Screening
• Concept Development & Testing
• Business Analysis
• Market Strategy Development
• Product Development
• Product Testing (In-house)
• Product Testing (Consumer)
• Test Marketing
• Commercial Launch
Step-By-Step Sequential Model

• The starting point of NPD Process is

questionable
• The Evaluations for each stage give decision of
“Go or “No Go” but there is no clear action
defined.
• Steps are sequential in nature and hence built
rigidity to the process.(No Feedback loop)
• NPD is inter-function activity but Technical,
Finance, Production are involved in the process
at a late stage.
Waterfall Model
• Market Requirements
• Feasibility Analysis
• Product Planning
• Product Design
• Product Development
• Product Testing
• Market Testing
• Commercial Launch
Stage Gate (Phase Gate) Model
Development stages
Idea generation
(Search for innovative ideas)
Concept development
(include people, technology,
material, more holistic)
Build business case
(market, technical, financial ,
project analysis)
Build prototypes
Evaluation stages
Idea screening
Concept testing
(whether it is right for the
target market)
Business analysis
(once technologically
feasible, analyze market
potential, revenue
contribution, profitability)
Functional testing (QC)
Stage Gate (Phase Gate) Model
Development stages Evaluation stages

Pilot study
(internal, control group)
Pilot screening
Test marketing
(restricted market, model
customer group, may be
unconventional distribution)
Analyze test market result
from market feedback
Soft launch
(bigger territory, diversified
customer, normal distribution
channel)
Post launch evaluation
through different online
and offline channels,
Hard launch
forums
 Product Strategy
&
Development Stages
New Product Development Process
• Market Requirements (Market Analysis)
• Product Strategy
• Product Idea Generation & Screening
• Concept Development & Testing
• Business Case Development & Analysis
• Market Strategy Development
• Product Development
• Product Testing (In-house)
• Product Testing (Consumer)
• Test Marketing
• Commercial Launch
Product development
• Goods versus services
• B2B versus B2C
• Customer Segment 1 versus Customer
segment 2
• Product Development Process 1 versus
PDP2
• Technology 1 versus Technology 2
 Product strategy
• Static /Stable Environment versus Dynamic/
Unstable Environment
• Predictable Environment versus Unpredictable
Environment
• Defined products (defined outcomes) versus
undefined products (undefined outcomes)
• High PD cost versus low PD cost
• High correction cost versus low correction cost
(Error cost)

Too many uncertainties ? Decisions ? Risk ?

Uncertainties ?
1. Customer need Uncertainty
▪ Long term stability of needs?
▪ Strong/week needs?
2. Market uncertainty
▪ Big enough market?
▪ Distribution access?
▪ Past experience in the same market?
3. Competitive uncertainty
▪ Reaction from competition?
▪ New competitive products?
▪ Price competition?
4. Technological uncertainty
▪ Right technology to deliver the benefits?
▪ Cost of technology?
▪ Skill set on new technologies?
▪ In-house/outsource?
▪ Coordination and bonding with partners?
Uncertainties ?
5. Resource uncertainty
▪ Right resource to complete project in time?
▪ Right resource to market?
▪ Resource stability?
6. Product strategy uncertainty
▪ Right product strategy?
▪ Cannibalization?
▪ Chance of win our competition?
7. Organizational uncertainty
▪ Support of top management?
▪ Sharing of scarce resources?
▪ Interdepartmental conflicts?
8. Supplier/Partner uncertainty
▪ Suppliers ability
▪ Suppliers stability
Ansoff Matrix Product Portfolio Strategy
 NPD Option with risk associated
Current New
Technology
Existing New product Existing New product
Market product line product line line
approach line
strategy
Current Existing OPD NPD+ OPD+ NPD++
strategy customer
segment
New OPD+ NPD++ OPD++ NPD+++
customer
segment
New Existing OPD+ NPD++ OPD++ NPD+++
strategy customer
segment

New OPD++ NPD+++ OPD+++ NPD++++

customer
segment

+ = less risk, ++ moderate risk, +++ high risk, ++++ very high risk
NPD – Innovation/penetration matrix
Exixting Improved New
Technology
technology technology technology
Market

Same Reformulation Replacement

market Improve quality at Better feature
same/lower cost of using different
existing products technology

Same market Remerchandise Improved product Product wise

With More market extension New technology to
different penetration Provide improved same product for
expectation product attribute to same customer
(market existing customer
expectation)
New market New use Market extension Diversification
New class Modify present New technology
customers products to reach new for new class of
customers customers
 Business Analysis /Feasibility Analysis
Qualitative Assessment
• Product/Market Feseability
• Technical Feseability
• Project Feseability

Quantitative Measurement
• Financial analysis (ROI, BES, BEP, NPV)
• Risk Analysis (Decision tree-Expected value, PD)
Thank You