Three Different Types Of New Product Processes Marketing Essay

Chapter 1

1.1 Introduction.

New-Product Development processes are highly complex, dynamic, iterative, and unique. They are complex because they involve multiple disciplines (Simon 1981; Subrahmanian et al. 1997; Reich et al. 1999) they contribute to the development of both simple, complex and multidisciplinary products, whose resources are limited, short span development time, and increased and regulatory demands accompanied with quality (Ulrich and Eppinger 2000; Kusiak 2002; Shane and Ulrich 2004). They evolve continually because they are vital due to various reasons including market, technology, and organizational changes (Fricke et al. 2000; Otto and Wood 2001). “They are inherently iterative due to the interdependencies between the design activities (Yassine and Braha 2003). They are unique, though they may share common features or elements (Smith and Morrow 1999).”

A product development process is flow of activities required to transform ideas to products of similar activities which have been converted to produce a new product and create opportunity for these products in the market. move from concepts through specific design to meet the objectives within the constraints required before being accepted as a new product. Some of the challenges to new product development include the increasing uncertain business environment, not so smooth markets from buyer and other investors, and different levels of organisational ability to develop when accompanied with a new product project. Therefore skills of leadership and management are needed to attack, guide and make product development process is highly essential. (R.J Thomas 1993).

1.2 Three Different Types of New Product Processes.

The following are the three different areas of product development processes which we shall be having to look into in these assignment. These processes shall be briefed more in subsequent chapters of this write up.

Product development processes in an Engineering Sector

The following steps and processes have been identified in an Engineering sector for which a new product is introduced into the market. These processes shall be expatiated more in following chapters (Kim B. Clark, Takahiro Fujimoto)

Product and Process Design (Idea Generation)

Product Planning/ Concept validation

Product Engineering

Process Engineering

Production.

Product development processes in a Pharmaceutical Sector

Also for the process of introducing a new product in a pharmaceutical sector, the following processes are been considered

Basic research

Applied research

Clinical development

Regulatory delay

Post marketing evaluation

(PDDM Module Note, Mairi Macintyre)

Product development processes in a Software environment.

Concept Development – Concept Refinement and Concept Screening

Concept Alignment

Concept Legitimization

Chapter 2

Three Different New Product Processes

Product Development processes in an Engineering Sector:

The following processes are been discussed because they form the basis to which a new product is been introduced in the engineering sector. There are a few more processes which new product has to undergo right from when the idea was made up to when the new product would be introduced into the market. But for the nature of this write up, it will be looking critically into three major aspects of new product processes which encapsulate all other processes and their difference in which a new product has to go through before introduction. These major processes are as follow below:

Fig 1: Stages of New product development processes. Adapted from Kim B. Clark, Takahiro Fujimoto

Product and process design ( Idea Generation):

From the diagram, this stage shall be looking at the following new product development processes, which are: Product concept, Product Plan, Product Design and Process Design

There are so many ideas put together when a new product is about to be formed, some of these ideas are considered and put to use. Ideas for these new products can be gotten from doing basic research by considering the opportunities and strength which they would posses or by the weakness and strength which they bring forth. Other way also includes using market trends, conducting surveys, looking at competition available, target customer etc.

At the idea/ concept generation stage information on what the market would be in the future, the possible technical actions and other conditions shall be fused together into what is called the product concept. Creating a defined concept or idea that would attract proposed customers is the challenge designers, researchers and planners are faced with. Delivering a detailed product concept is definitely more than just assuming or giving a specifications and dimension on how the product should be developed, it should be detailed such that it defines what the customer actually wants. The product concept is majorly a foreseen want, an important message passed by the new product with the hope of fulfilling the wants of the proposed customer. It’s mostly expressed at initial stage by either word of mouth, diagrams showing specifications. (Kim B. Clark, Takahiro Fujimoto).

Sources for new product ideas come from different aspect such as journals, competitors, employee’s business customers etc. Research based ideas could be limited to small scale businesses when it come to doing technical generation of ideas. This particular stage is very important as it lays the bases and foundation for all other stages involved in the process of product development, ideas generated at this stage gives the guideline to the whole success of the product development. At this stage also the several ideas generated do go through a screening process whereby the more successful and viable ideas are been separated from others. Views of impending customers, workers are been seeked to enable a proper screening process. Also the factors that could be affecting businesses externally such as competition, different changes in technology, legal issues are all criteria to be considered in making the decision. Ideas that are more appealing and feasible are what the firm sticks with from the large pool of ideas generated and put together. (smallbusiness.chron.com, 4th Nov 2012)

Concept Validation/ Product Planning:

The concept has gone through a process which has been able to stand different circumstances that could face an organisation varying from operations to market etc. The idea should then be taken to proposed customer and a few survey has to be made about this new idea that has been developed. Question like how practical and feasible is the product? Of what benefit is it to the target customer. At this stage also, it is a prototype that is been used to do this survey, no major production is done yet. (www.learnmarketing.net 6th Nov 2012).

After this survey is carried out to confirm if this concept is valid and acceptable by the target customer, a process in which the product has to be planned for is also carried out whereby the Business analysis and specific details whereby the design, style, different layout, what specification to be used etc. is put into consideration. Also questions like what the selling price of the new product would be? What volume should be produced based on market and an estimate of what the profitability what be like also would be considered. The strength, weakness, opportunities and threats of thee new product also is analysed. (http://smallbusiness.chron.com 6th Nov 2012)

Process Implementation and Manufacturing support:

This process deals with the implementation of the new product, while manufacturing talks about the measurement control system and production which provides a feedback on the new product after been introduced to the market. Product engineering at this stage changes all what product planning is all about into a more detailed product design and full scale production begins at this stage. Engineers at this stage do face problems whereby have to now work on the concept in real parts and making sure they satisfy the customer needs and making sure they meet up with the business angle of making a product suitable to make profit. The materials are then put together into prototypes, which show the first impression of what the design outcome would be. These prototypes are then tested to see they meet the attributes in which have been portrayed in the design. Sometimes modification and adjustment are made also when this is been carried out. All these processes are been followed till the product meets the requirement and its officially accepted.

Process engineering transforms a complete product design that has been accepted into process design which are then been put forward to the market. ” Process design information is subsequently converted into the actual production factors such as tools, equipments, numerical control tapes, and trained workers- that are deployed in volume production plants. The performance of these factors is tested at various tryouts and pilot runs”. (Kim B. Clark, Takahiro Fujimoto).

Product development processes in an engineering field is shown below in a more simplified manner, it outlines series of products that have been manufactured already. The model shows the different processes starting from the concept generation to planning of the product and as well product and process engineering.

Product development processes in a Pharmaceutical Sector

This stage refers to how innovation or product development processes are been followed in order for a new product to be developed. Steps highlighted earlier are been put into practise here and expatiated more. The structure and innovation processes may differ according to different companies

Basic Research:

At this stage a proposal for development, this describes what the basic looks and features of this product in terms of quality, market characteristics, quantity, proposed growth of product, price level etc are been put forward to the board organisation for review. Other departments in an organisation who also involved with the evaluation of this new research are the research and development group, marketing department and other managers who for the sake of technicality and viable options begin to check the feasibility. Should these factors which are in consideration be successful, the next stage which the product thus advance to is the applied research. (Ekonomicheskaia nauka sovremennoi Rossii, 2009, no. 2.)

Applied Research

Applied research is the next phase which these product thus advance to after fulfilling the basic research. This phase the simplest and efficient mode of solution are been looked for also at this stage. These product is been sent to laboratories for testing and more research on how effective the product would be to the end user which is the customer, competence of the technicians in the laboratory, work ethics are also been considered. These research hereby proposes what the product specification or design would. For example, if a drug is been produced, the research gives precise details on what the composition of each of the substance to be used would be, they test the compatibility of the drug with the human body and make sure there’s no detriment. Also the economic value of these product is been looked into, what the production and development cost would amount, detailed process of how the product would evolve also. A prototype is then delivered and test on efficiency of the new product is been carried as experiments. (Ekonomicheskaia nauka sovremennoi Rossii, 2009, no. 2.)

Clinical Development

Performing clinical and technical tests for the product are part of the process in which a new product follows in a pharmaceutical environment. A program is put in place for the promotion of the new product in the market. In this programme, documentation, different techniques and production are changed so as to get production technology to be used. Using alternate production techniques or special machines can be used in lowering the production cost during this development. When several test has been carried out during this clinical development and production process is certain, test are been carried out multiple times repeatedly and changes are been made in the documentation should there be need for them. Finally developments and documentations of product is then been approved so as allow roll out of products. (I.B. Gurkov, A.S. Gol’dber and O.A. Shibanova)

Regulatory Delay

In any country, before pharmaceutical products are released, they have to go through approved regulatory body which is responsible for the screening and checking quality of pharmaceutical products. These regulatory Bodies also carry out intensive test on the product, depending on work flow of the agency, specific dates might not be given for the approval of these produce which could delay or affect the production process of the organisation. If the product scales through the test which would be conducted by the regulatory agency, a license or authority for the product to be produced is given. But should there be glitches in the product been sent to the agency, it would be sent back to the organisation for further check which causes more delay in the production process. (I.B. Gurkov, A.S. Gol’dber and O.A. Shibanova)

Post Marketing Evaluation

This stage of production process is more of the marketing and reviews after product launch has been conducted. From reviews and feedback which are available to the organisation, the product can be subject to modification during further processing. In a case whereby the change needed cannot be carried out by the organisation due to regulatory conditions, th product can be taken out of product. In situations like this the firm plans ahead for situation like this and therefore do have substitutes for this product based on same solution. (I.B. Gurkov, A.S. Gol’dber and O.A. Shibanova)

Product development processes in a Software environment

Diagram showing a process for a front end development of a new product.

Fig 2: Adapted from California Management Review VOL.54, NO 4 Summer2012 CMR.BERKELEY.EDU

Research made in the digital environment has continually made interest in new product be on the increase. Example of such are youths who continually use the social networking environment to create relationship with the outside world which in a way provides researcher with more knowledge to develop more social networking sites there by creating new ideas and concepts. This enables firms to be informed about the opportunities’ available to them by this research. It identifies the opportunities’ available to the firm about this research on the product development, the company must be able to explore different technologies and market which makes an important aspect of new product development.

Prior to developing a new product in a software environment brief processes which are highly essential are mentioned below giving detailed steps.

Concept Development

A good idea/ concept must be introduced which literally means that “Set of transformation of input elements into output elements”. The input element is the idea showing an opportunity. This idea or concept is then changed into a product to be developed. The idea/ concept is then modified into 2 related activities which are idea refinement and idea screening, which are shown in the diagram above. From the fig above also “Concept development constitutes the core of the framework but must be complemented by its alignment and legitimization. Concept alignment expatiates on how the firm strategically aligns an idea with its internal and external environment. While the legitimization acknowledges the socio-political dimension and the need for creating organizational commitment in the front end” (VOL. 54 cmr.berkeley.edu)

“As detailed in Fig 2 Several preconditions must be fulfilled for a corroborated product definition to emerge. First, firms need high-quality development, characterized by adequate I/C refinement and I/C screening that allow them to develop an idea into a corroborated product definition. As implied by the sine curve, these two activities are interrelated and should not be performed in isolation. Rather, during the front end, development personnel need to iterate between idea and concept refinement and screening. In the front end, screening is not exclusive to the gate reviews. While most firms employ formal screening activities, screening also needs to be done more informally, in a continuous manner, and integrated with refinement activities” (CALIFORNIA MANAGEMENT REVIEW VOL. 54, NO. 4 SUMMER 2012 CMR.BERKELEY.EDU). Concept development can be further broken down into 2 phases.

2.3.1.1 Idea/ Concept Refinement

Concept refinement gives a new product development its direction, passion and technical specification that should be used to be characterized by imagination and experiments. The research and development team takes the idea and refines it into a product concept, which is then also refined into a prototype product. While the engineering of the product is very important, the whole process should show more quality, information and specific rather than just making loads of quantity to specification. “A new product idea is a mental picture of a possible and feasible solution to a problem” (Rice et al., op. cit.). “The quality of the idea is critical and can make or break the project” (Griffiths-Hemans and Grover, op. Cit).

The main reason for concept refinement is because out of so many ideas that would have been put together, a certain number of those ideas would be unsuccessful hence the need for refinement.( P.G. Smith and D.G. Reinertsen). Another important aspect of concept refinement is calculating the risk and making sure uncertainties are reduced. (Griffiths-Hemans and Grover, op. Cit, Dec 2004). With this, we can deduce that members of the research and development team need to be able to detect vital information from the concept and work on it quickly. For example if a software is been worked on and an application which it is going to be a platform in which it runs is upgraded, development team building the software needs to be know this change and implement quickly thereby reducing its uncertainties. However collecting reliable information is not only needed for concept refinement, the process also has to be proficient so that product process can move easily from ideas to concept that can be easily modified, to avoid time spent on irrelevant ideas. Furthermore poor execution of concept refinement can be more costly during the later stages of the new product development. (Florén, Henrik Frishammar, Aug 2012).

2.3.1.2 Idea Screening

While refinement of ideas literally concerns the development of a concept, Idea screening focuses more on the issues which the product is relating to for the customer. Furthermore idea screening can also be referred to as the series of activities which an idea has to go through after refinement, if the production of the idea should be further developed. (A.S.O. Yu, P.S. Figueiredo, and P. Tromboni se Souza Nascimento, March 2010) In some cases large firms do have some electronic system of selecting the best concept out of series of ideas. For example when a company called 3M introduced its pacing programs which was used to identify and sort between thousand of project which are in progress at any time within the 3M organisation (R.A. Burgelman, C.M. Christensen, and S.C. Wheelwright 2004). However, screening of products is sometimes not performed fairly, because they only tend to focus on getting rid of the obvious concepts that are not suitable. This pattern has been confirmed by a research, which shows that most organisations have policies to reduce false positives during the first stages of product development but the preparation are poor due to false negatives (H. Chesbrough, 2004).

Concept screening in a software environment also can be performed in both formal and informal areas and as well as internal and external factors. Therefore been able to terminate inferior product ideas can help in saving large cost of money. Example when General electric didn’t make use of the proper selection criteria during a screening process thereby causing loads of problem to them (Grönlund, Rönnberg-Sjödin, and Frishammar, op. Cit 2012).

Concept Alignment

Aligning a concept is one the key activities in product development process of a new product in a front end or software environment. Alignment is more confirming the merging of an idea and how the firm producing this product wants to carry out their operation in launching. In general, ideas and concepts must be organised in such a way that it would fit the company’s strategy and planning operations, both internally and externally. (Anokhin, Wincent, and Frishammar, op. 2012)

Relating internally to concept alignment, a new product concept has to relate to the companies operation and strategy for the new product to be executed thereby enabling its success (X.M. Song and M.E. Parry, Sept 1996). Example of this is Apple, who when they produce new products always align their products with the design element and product technology which the company stands for, and this can be seen in all of the product ranges which is available to them.

In general there are always mistakes when a new concept for development is not being aligned to the companies operation and strategy. Example of this also is when projects which are not been successful fail to capitalise on the core competence of the organisation whereas the successful projects key into the core competence. (California Management Review VOL. 54, NO. 4. pg 9 2012) So therefore it’s very important to get a balance between the idea and the strategic operation of an organisation. Some other usual mistakes that are made is when a product is been based on a particular project which its meant to fulfil rather than looking at the organisational fit, and also realising that the research and development department also funds projects based on the past project technology they have carried out, rather than what is required by an organisation products ( Khurana and Rosenthal (1997). The detail of the product planning is also one important aspect, which mean that an organisation has to develop a product definition which would subsequently give them a range of products to the customers. (Kim and Wilemon 2002). Therefore organisations should realise that new products which are been developed at the moment, do play a major role for the organisation in a case whereby the firm wants to have future products developed and thus require the present product as a foundation. Also concept alignment makes sure the product not only fits the strategy of the company but should also add value to the details of the new product itself. Example of this can be seen from Black and Decker when they launched a universal motor that was used to substitute the different brand of motors which have been produced in the past for different production field. This move made the company to be able to produce a lighter and more profitable drill, that was also launched at a lower price than its major competitors. This made Black and Decker a major player of the marker, despite the fact that other manufacturers from overseas are also present in the market.( M.H. Meyer and M.H. Zack, 1996). “Firms should also assure that the project portfolio fits with resource capacities of the firm so that maximum value from investment is gained” (C.H. Killen, R.A. Hunt, and E.J. Kleinschmidt 2007) This means that there should be a contribution of front end efforts to the development of existing products so that they can make use of their place in the product life cycle, also to be able to replace other products which are already getting to the end of their life cycle. So therefore aligning of concept or idea is very important also because it allows a firm to introduce a new product line with disturbing other production i.e. it allows a synchronisation between the new product development process and the existing development process.( C.H. Killen, R.A. Hunt, and E.J. Kleinschmidt, 2008).

Concept and ideas do have both internal and external alignment. Internal alignment deals with the factors which affect development of new products internally such as department verifying all necessary specification for the new product introduction etc. Where external alignment deals with the organisation dealing with factor that affect new product introduction externally, example of these factors are technology advancement and competition from other manufacturers. (K.G. Rivette and D. Kline, 2000)

2.3.3. Concept Legitimization

The third major process in new product development for a software environment is the legitimization of the new product. I.e. protecting this new product development from infringement. This legitimization can be discussed from 2 different ways, firstly is getting this product an approval from the governing council which this organisation operate from and secondly is protecting the copyright of these products by submitting it for copyright or patent protection. (Cooper 2008)

Ideas and concept generally need the input of other people apart from the founder of this product for it to materialise into the process of NPD. (Griffiths-Hemans and Grover 2004)

There are a few problems which companies do face when they fail to legitimize a concept. Two major problem of this nature are, 1. Solid ideas are mostly been ignored sometimes because they fail to be legitimize. Example of this is what happened to Hassleblad when they failed in their quest to legitimize the project involving the development of their digital camera. 2. Terrible ideas which should be quashed at the early stages of development can be push far ahead in organisation by the influence of top officials, thereby causing unwanted cost and large development in the line as the result. (Cooper (2008), S.K. Markham, July/August 2000, 429-447).

How the concept is developed is also an important aspect of concept legitimatization. Peradventure the concept is an idea that was achieved by the development of an individual, board management should take the legitimization of this concept very important, so that creating a commitment by the organisation to the idea would be higher. “concept legitimization is also contingent on the level of cross-functional integration, which is critical to (California Management Review VOL. 54, NO. 4 Summer2012 CMR.BERKELEY.EDU 11th Nov.2012) “keeping an idea alive and active” (H.A. Conway and N.W. McGuiness 1986). Basically this can be said that, an idea or concept has to be subjected to constructive criticism from individual who have knowledge about the new product to be developed in the department. If this is not done, there could be consequences for it not been reviewed.

Chapter 3

Differences between Types of New product Development Process

There are couple of similarities between different processes of new product development in different industry, which is mostly at the early stages of developing a new product. The difference between each process in different areas of this write up is to be looked upon. Three different stages in new product development shall be used to compare the differences. The stages to be considered are

Initial / Early Stage

Production Stage

End product/ Marketing stage.

The Table below shows the different processes and their stages and how they shall be compared.

Engineering Sector

Pharmaceutical Sector

Software Area

Initial / Early Stage

-Idea Generation

– Validation

– Research

– Applied Research

– Idea to develop a New product based on improvement

– Refinement and Screening

Production Stage

-Product Engineering

– Process Engineering

– Clinical Development

– Regulatory Delay

– Alignment i.e Meeting the strategy of the organisation

End product / Marketing stage

-New product Developed into the market

Evaluation and marketing to know effectiveness

-Can be withdrawn totally from market

-Goes for Legalization

From this table it can be seen that most of the processes do have similar production process but they get to happen at different stages, thereby making the production process different.

Some of the differences are mentioned below.

At the early stage of new product development in engineering sector, validation happens at that stage, but this same process which happens to be the legitimization stage at the new product development in a software environment happens to be at a later stage after production has been made. Also this difference can be noticed at the pharmaceutical sector also whereby it happens at the production stage after the product has been sent to responsible agency for regulatory approval.

There is delay in the pharmaceutical sector when developing new product. This is as a result of the product being sent for approval. This delay is usually not experienced in the engineering sector while processes in a software environment experience its own delay after the product has been produced.

In the case of processing in the software environment where new product is been developed, the new product has to align with the operations and strategy of the organisation as well as the budget and other factors which the organisation would be considering. Basically the engineering sector doesn’t need this alignment at that same stage in their new product development process, the product has already started full scale production. While at this same stage in the pharmaceutical sector, it is more of product testing that is been done.

At the end of manufacturing in the engineering sector, new product developed can only be subjected to repairs and maintenance, because of the series of processes it has gone through before becoming a finished product. New product developed in the pharmaceutical sector after been produced can still be totally withdrawn from market.

Chapter 4

Conclusion

After careful consideration, debate and analysis of the various types of new product development processes in different sectors of manufacturing industry, it can be generally concluded that, each production process in every sector from the Engineering/ Automobile industry, Pharmaceutical and Software Industry differ from each other.