jump to navigation

New Product Development May 21, 2009

Posted by mariobarreiro in Marketing.
trackback

New products are original products, product improvements, product modifications and new brands that a company generates using its own research and development efforts (Brassington & Pettitt, 2003: 284). The development entails a process, and authors disagree in the number of steps included on it. For instance, Jobber & Fahy (2003: 146) define seven steps; Brassington & Pettitt (2003: 347) detail eight steps while Kotler et al (2002: 501) assign nine steps. However these authors agree in some points and this essay will focus on one of them: Idea generation.

Idea generation is one of the earlier steps of the process, and it can be defined as the systematic search for new product ideas. The sources of ideas are internal sources, customers, competitors and distributors/suppliers/others (Kotler et al, 2002: 503).

 

Internal sources:

Ideas are proposed by directors, employees and R&D departments. There are two possible ways of ideas flow: top-down, where ideas and new projects are created (and usually imposed) by owners, managers and directors; and bottom-up, with an opposite flow from employees to the top of the company (Morris, 2006). Examples of bottom-up innovator companies are Google, Amazon or Toyota.

Google allows its employees to spend 20% of working time to extend products, and 10% to do personal stuff. For instance, the Google News service has its roots in this policy (Weir, 2008). Amazon gives a price to encourage people to share ideas, furthermore, they think is important to do something with them. Moreover, Amazon says that those closest to the problem are in the best position to solve it. Finally, Toyota employees contribute with more than a hundred improvement ideas each year (Morris, 2006).

 

Customers:

Good new product ideas also come from watching and listening to customers.

In Amazon, developers has to spend some time with customer service, listening to customer service calls and answering e-mails to understand the impact of their jobs as technologists (Hoff, 2007).

In 1989 an employee from the United States Surgical met a surgeon who was using a jury-rigged clip to remove gallbladders laparoscopically. Then, she carried the word back to the U.S. Surgical Headquarters, and as a result, by early 90s the company had a basic laparoscopic stapler ready to go. In 1991 more than 60% of gallbladders were removed laparoscopically (Reese, 1992).


Competitors:

Companies can get good ideas from competitors, for instance, watching to ads and communications to get clues.

On the extreme, there is the case of new developments that were discarded by a company and lately used by other reaching a market success (Pang, 2002; Burke, 1999). In the early 80s Steve Jobs, CEO of Apple, visited Xerox’s Palo Alto Research Center (PARC). Xerox executives did not think that a “mouse” device could be useful, and they allowed Apple to see their researchers’ investigations. From that meeting, Apple took the mouse and the graphical user interface (GUI) ideas which they implemented into the Apple Lisa computer.

 

Distributors, suppliers and others:

Distributors are closer to the market than the manufacturer, thus they can pass along information about consumer problems and enquiries. On the other hand, suppliers have contact with many other similar companies, and it can drive to find new opportunities.

There are other sources of ideas in magazines, shows and seminars, and these have not to be necessary from the same industry. For instance, in 1993 Heineken needed a solution to beer contamination created by glass particles. They contact with PA Consulting, which developed a solution inspired by a method used in the pharmaceutical industry to inspect vials (Baxter, 2000).

 

Web Articles:

Films:

  • Pirates of Silicon Valley. 1999. Film. Directed by Martyn Burke.

Books:

  • F. Brassington and S.Pettitt. 2000. Principles of Marketing. 2nd ed. Prentice Hall 
  • D. Jobber and J.Fahy. 2003. Foundations of Marketing. McGraw-Hill Education
  • P. Kotler et al. 2002. Principles of Marketing. 3rd European Edition. Prentice Hall
Advertisements

Comments»

1. Anh - May 21, 2009

I love marketing as well and I am glad to see what you write in English then I can understand it.

2. tapeworm symptoms in cats - April 7, 2013

Everything posted made a bunch of sense. But, consider this, suppose
you composed a catchier title? I mean, I don’t wish to tell you how to run your blog, but suppose you added something that grabbed a person’s attention?
I mean New Product Development | Mario Barreiro is kinda plain.
You ought to peek at Yahoo’s home page and watch how they create article titles to get people to click. You might try adding a video or a picture or two to get people interested about what you’ve written.
In my opinion, it would make your website a little bit more interesting.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: