Strategic new product development

Table of Contents

1. Introduction
   1. Objectives
   2. Learning goals
   3. Teacher page
2. Company strategy
   1. Corporate mission
   2. Business example: Mission
   3. Corporate strategy
   4. Strategic planning process within business units
   5. Business example: strategy
   6. Four examples of new strategies
   7. Exercise: What is your company's strategy?
   8. Summary
3. Introducing the NPD process
   1. Innovation and innovativeness
4. Idea stage: discovery
   1. About ideas and creativity
   2. Sources for new ideas
   3. Four examples of idea generation
   4. Stimulating ideas
   5. Summary
5. Gate 1: Idea screening
6. Stage 1: Scoping
7. Gate 2: Second screening
8. Stage 2: Build the business case
   1. Concept development
   2. Concept testing
   3. Four examples of concepts
9. Gate 3: Go-no go development
10. Stage 3: Development
11. Gate 4: Go-no go testing
12. Stage 4: Testing and validation
13. Gate 5: Go-no go launch
14. Stage 5: Launch
15. Gate 6: Post-launch review
16. Completion
    1. Comments
    2. Self-assessment
    3. Key messages
    4. Further reading
    5. Evaluation

Innovation and innovativeness

Innovation is a quite broad concept that many people have tried to define in various terms over time. One is given by Trott (2008), who defines it as the management of all the activities involved in the process of idea generation, technology development, manufacturing and marketing of a new (or improved) product or manufacturing process or equipment (Trott, 2008, p.15).

A first distinction can be made between incremental and radical (really new) innovations. Incremental innovations represent an embodiment of new features, benefits, or improvements to the existing technology in the existing market. An incremental new product involves the adaptation, refinement, and enhancement of existing products and/or production and delivery systems. Many consumer goods provide added value in terms of their incremental innovative character.

Radical innovations have a much stronger effect on their environment and represent the embodiment of a new technology that results in a new market infrastructure (Song & Montoya-Weiss, 1998). Furthermore, radical innovations may also be introduced in terms of function, design, performance, novelty, or other characteristics which separate them from everything that exists.

A classification of six different product types, or degrees of product innovativeness, is given by Booz et al. (1982; in Crawford & Di Benedetto, 2008; Rudder et al., 2001):

• new-to-the-world products (really new products)
• new-to-the-firm products (new product lines)
• additions to existing product lines (line extensions)
• improvements and revisions to existing products
• repositionings (mainly based on strategic marketing activities)
• cost reductions.

With specific focus on the food sector, Linnemann et al. (2006) suggest the following classification for 'new' food products:

• 'me-too' products (imitations of existing products)
• line extensions
• repositioned existing products (mainly a marketing task)
• new forms of existing products (alterations)
• reformulation of existing products (new formula to improve sensory characteristics, reduce costs or substitute ingredients with irregular supply etc.)
• new packaging of existing products
• innovative products (products change for added value other than described above)
• creative products (truly new products that were never seen before).

Definition: Innovation