NEW PRODUCTS

MANAGEMENT
Merle Crawford
Anthony Di Benedetto
10th Edition

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter 10

The Full Screen

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Difficulties in Concept Selection
• One of the biggest challenges of product
management.
• What if every project under consideration has
passed all the hurdles so far?
• Lacking enough financial and human resources,
the firm needs a good concept selection
procedure, otherwise management must:
– Guess (and select the wrong project)
– Approve too many projects (and underfund everything).

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 The Full Screen
• A step often seen as a necessary evil, yet
very powerful and with long-lasting effects.
• Forces pre-technical evaluation, and
summarizes what must be done.
• Methods range from simple checklists to
complex mathematical models.

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 Purposes of the Full Screen
• To decide whether technical resources should be devoted
to the project.
– Feasibility of technical accomplishment — can we do it?
– Feasibility of commercial accomplishment — do we want to do
it?
• To help manage the process.
– Recycle and rework concepts
– Rank order good concepts
– Track appraisals of failed concepts
• To encourage cross-functional communication.

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 Screening Alternatives

• Judgment/Managerial Opinion
• Concept Test followed by Sales
Forecast
(if only issue is whether consumers will like it)
• Scoring Models

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 A Simple Scoring Model
Values
Factors: 4 Points 3 Points 2 Points 1 Point
Degree of Fun Much Some Little None
Number of People Over 5 4 to 5 2 to 3 Under 2
Affordability Easily Probably Maybe No
Capability Very Good Some Little
Student's Scores: Skiing Boating Hiking
Fun 4 3 4
People 4 4 2
Affordability 2 4 4
Capability 1 4 3
Totals 11 15 13

Answer: Go boating.

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Source of Scoring Factor Models

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 A Scoring Model for Full Screen
Note: this model only shows a few sample screening factors.

Factor Score (1-5) Weight Weighted Score

Technical Accomplishment:
Technical task difficulty
Research skills required
Rate of technological change
Design superiority assurance
Manufacturing equipment...

Commercial Accomplishment:
Market volatility
Probable market share
Sales force requirements
Competition to be faced
Degree of unmet need...

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 The Scorers
• Scoring Team:
Major Functions (marketing, technical, operations, finance)
New Products Managers
Staff Specialists (IT, distribution, procurement, PR, HR)

• Problems with Scorers:

May be always optimistic/pessimistic
May be "moody" (alternately optimistic and pessimistic)
May always score neutral
May be less reliable or accurate
May be easily swayed by the group
May be erratic

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 Industrial Research Institute
Scoring Model
Technical success factors: Commercial success factors:

• Proprietary Position • Customer/Market Need

• Competencies/Skills • Market/Brand Recognition
• Technical Complexity • Channels to Market
• Access to and Effective Use of • Customer Strength
External Technology • Raw Materials/Components
• Manufacturing Capability Supply
• Safety, Health and
Environmental Risks

Source: John Davis, Alan Fusfield, Eric Scriven, and Gary Tritle, “Determining a
Project’s Probability of Success,” Research-Technology Management, May-June 2001,
pp. 51-57.
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 Alternatives to the Full Screen
• Profile Sheet
• Empirical Model
• Expert Systems
• Analytic Hierarchy Process

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A Profile Sheet

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 Project NewProd Screening
Model
• The idea is that by examining dozens of variables on real
product successes and failures, one would be able to
predict the likelihood of success of a new product at this
early stage, and to identify weak spots that can be
addressed before new product project approval.
• Current practices splits the screening model into two
groups: must-meet and should-meet criteria.
• Must-meet are “yes-no” questions even one “no” screens
the project out.
• Should-meet are scales, and high scores offset
(compensate for) any low scores.

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Criteria Based on the NewProd Studies

• Must-Meet Criteria (rated yes/no):

– Strategic alignment
– Existence of market need
– Likelihood of technical feasibility
– Product advantage
– Environmental health and safety policies
– Return versus risk
– Show stoppers (“killer” variables)

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Criteria Based on the NewProd Studies
(continued)
• Should-Meet Criteria (rated on scales):
– Strategic (alignment and importance)
– Product advantage (unique benefits, meets
customer needs, provides value for money)
– Market attractiveness (size, growth rate)
– Synergies (marketing, distribution, technical,
manufacturing expertise)
– Technical feasibility (complexity, uncertainty)
– Risk vs. return (NPV, IRR, ROI, payback)
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 Analytic Hierarchy Process (AHP)
• An analytical technique that gathers expert
judgment and uses it to make optimal decisions.
• In AHP screening models, the respondent
identifies the key criteria in the screening decision,
assessing which are the most important. Each
choice (project) is rated on each criterion.
• The AHP software calculates scores for each
project and ranks them in terms of preferability.
• AHP analytical models such as Expert Choice are
commercially available.

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Diagram for Analytic Hierarchy Process (AHP)

Goal: Select Best NPD Project

Market Fit Tech. Fit Dollar Risk Uncertainty

Product Line
Product Line Design Payoffs Unmitigated

Channel Materials Losses Mitigated

Logistics Supply

Timing Mfg. Tech.

Price Mfg. Timing

Sales Force Differential

Advantage

Products 1, 2, 3, and 4

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Abbreviated Output from AHP

Ranking of Alternatives:
Project Overall Weight
P1 0.381 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
P2 0.275 xxxxxxxxxxxxxxxxxxxxxxxxxxxx
P3 0.175 xxxxxxxxxxxxxxxxxx
P4 0.170 xxxxxxxxxxxxxxxxx

Recommendation: P1 is preferred as it has the highest overall

weight as calculated by AHP.
How did this happen? P1 was ranked by the managers as
among the highest on all of the most important criteria.

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