This document is a well-summarized version of the relevant book for course 1ZV50, Fundamentals of Product Innovation. The summary was done by reading every inch of the book to create a document that a student could read easily and get a high score on the exam
Chapter 1
Radical innovation: innovation that displaces or makes obsolete current products and/or
creates totally new product categories.
Due to increased globalization product development has become more challenging.
companies try to get advantages by setting up global new product teams that exist of R&D
personal from supply, manufacturers, and the company.
global innovation culture has the most effective global new product programs
Top challenges faced by technology leaders:
Accelerating innovation
Business growth through innovation
Competitors do the most damage when:
1- There is so little product differentiation that price-cutting takes everyone’s margins
away
2- Competitors have desirable new item that we don’t
Most important reasons why products fail:
Firm’s don’t understand the customer
Underfunds required R&D
Firm doesn’t do the required homework before beginning development
Lacks senior management support
Many firms look overseas not for only cheaper labor costs but to access talent residing in
these markets.
Serendipitous: When the product process is accidental.
True failure: when the product doesn’t add any value to the customer.
,Specific jobs in the field of new products:
Functional representative(marketing researcher or a production planner)
Project manager or team leader
New products process manager(responsible for helping project managers develop
and use good new product processes)
New product processes: the procedure that takes the new product idea through concept
evaluation, product development, launch and postlaunch.
Product portfolio management: helps the firm assess which new products would be the
best additions to the existing product line, given both strategic and financial objectives.
The reality is activities are not sequential, but overlapping. It
is not implied that one phase must be completed before work
can begin on the next phase. In fact overlapping is
encouraged.
Goal of new product processes: manage down the amount of risk and uncertainty as one
passes from idea generation to launch.
Product development is multifunctional where all functions work together on a cross-
functional team to accomplish the required tasks.
An evaluation task that includes conditional Go is sometimes called the fuzzy gate.
Breakthrough products: it fulfills the customer’s need to a greater degree than existing
products do while being more technologically advanced and innovative.
Incremental new products: An incremental product is the result of on-going improvement
and development, via a series of small upgrades or improvements.
The characteristics: overlapping phases, fuzzy gates, and flexibility are features of third-
generation new products process.
The Objective is to create value for customers by leveraging internal learning and
knowledge in order to have marketing and economic success.
,Chapter 2
Phases in New Products Processes:
There are three types of innovation:
Adjusted innovation:
o Continuous improvement of existing product categories.
Reconfigured innovation:
o Creating new and better value-providing solutions
Redefined innovation:
o Never before-seen solutions that provide new strategic directions for the
future.
Phase 1 : Opportunity identification and selection:
Three main streams of activity feed strategic planning for new products:
Ongoing market planning: understanding causality and good marketing plan
execution
Ongoing corporate planning: process that is used by businesses to map out a
course of action to grow, increase profits, gain exposure, or strengthen brand
identity.
Special opportunity analysis: One or more persons are assigned to take an
inventory of the firm’s resources. Analyze them to allocate them better
Categories of the opportunities identified :
An underutilized resource: a bottling operation, a strong franchise with dealers, or
that manufacturing process engineering department.
A new resource: a chemical company discovers a new compound with hundreds of
potentially commercial uses and applications
An external mandate: The markets may be stagnant, the competition may be
threatening, or customer needs may be evolving. Challenges like this will lead the
company to evolve.
An internal mandate: Long range planning often establishes a five-year-out dollar
sales target, new products people often must fill part of the gap between current
sales and the target. This gap is called product innovation gap.
Phase 2: Concept Generation:
Problem find-solve approach: study people and find what problems they have.
Creating new product ideas, usually called product concepts by new product people is
hard and sometimes frustrating work.
, Phase 3: Concept/Project Evaluation:
1. Before development begins on new ideas, they need to be evaluated, screened,
sorted out. This activity is sometimes called screening or pre-technical evaluation.
2. A concept test is used to discover what potential consumers think the product has.
a. Concept testing: what potential consumers think about the product.
b. Full screen: all concept testing’s combined to see a result using a scoring
model.
3. If the decision is to go ahead the evaluation turns into project evaluation, where we
no longer evaluate the idea but rather the plan we propose for capitalizing on that
idea. This involves preparing a statement (concept statement) of what is wanted
from the product.
4. A QFD is then written(a list of customer needs, product description, product
definition), this is now called a product protocol.
Phase 4: Development:
It is the phase where marketing plan is sketched and gradually fleshed out.
The product stream involves: industrial design and benchwork, or system design, prototypes,
product specifications, and so on.
Resource preparation is done.
Comprehensive business analysis: Some companies make this to let some customers
review the product and the company eventually approve or not approve the product.
Phase 5: Launch:
The critical step is market testing, a dress rehearsal for the launch, and managers hope
any problems discovered are fixable between dress rehearsal and opening night.
Agile Product development:
Complimentary process to the phased new product process
The objective: provide customer satisfaction by continuous software improvement
and delivery.
Scrum: agile product development requiring some changes in product team
organization to build in the required amount of flexibility. Team engages in a series of
sprints to continuously develop and deliver software
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