New Product Development

Ganesh N Prabhu
 04.
Identifying New Product
Opportunities
 Identifying Product Opportunities
• Identify changes in user lifestyles, demography.
• Regularly study competitor products in detail.
• Regularly gather suggestions of existing users.
• Identify frustrations with the existing product.
• Maintain high quality documentation of ideas.
• Identify innovations of lead users of product.
• Track status of relevant emerging technologies.
• Identify blank spaces in the buyer utility map.
 Buyer Utility Map
Stage Purchase Delivery Use Supplements Maintenance Disposal
Utility
Customer
productivity
Simplicity
Convenience

Risk
Fun & Image

Environment
friendliness
 Buyer Utility Map
Horizontal Axis - Stages Vertical Axis – Utility
of customer experience derived by the customer
- Purchase - Customer productivity
- Delivery - Simplicity
- Use - Convenience
- Supplements - Risk
- Maintenance - Fun and Image
- Disposal - Environment Impact
36 squares to fill Opportunities open up
Generating Ideas from Product Frustrations
• Target user does not know how to use product.
• Target user knows how to use the product but
is unable to actually use the product.
• Target user is able to actually use the product
but finds it quite difficult to use the product.
• It is irritating for customer to use the product.
• User is unable to use the product as designed.
• Product is inadequate to meet the users need.
Generating Ideas from Product Frustrations
• Product has inappropriate design for the user.
• Product does not last as long as is expected.
• Product affects other products when it is used.
• Product affects associated products when used.
• The associated products given are inadequate.
• Product is of an inappropriate size or shape.
• Product does not suit customer’s application.
• Product does not cater to users special needs.
 Generating Ideas from Lead Users
Lead user experience needs ahead of the market.
Lead users can experiment to meet these needs.
Types of Lead Users
1. Lead users in the target application area –
they actual experiment on the target product.
2. Lead users in analogous markets with very
similar applications as the target product.
3. Lead users that specialise in problem areas of
the target product.
 Generating Ideas from Lead Users
Example – Identify lead users for pair of scissors
1. Lead users in the target application area –
Barbers and Tailors – improve ergonomics
2. Lead users in analogous markets with very
similar applications as the target product –
Hedge cutters – use of a notch to cut stems
3. Lead users that specialise in problem areas of
the target product – Problem area sharpness –
Book cutting blade – how is it kept sharp?
 Generating Ideas from Lead Users
Identifying Lead Users
• Identifying lead users is difficult – it needs a
more expansive search process.
• Lead users in the target application area may
become early adopters of the new product.
• Lead users in analogous markets are not
likely to early adopters of the new product.
• Lead user research should be complemented
by traditional large sample market research.
Building Superior User Experience
Peter Morville’s Honeycomb
 Building Superior User Experience
• Useful. Are products and systems useful?
• Usable. Is it usable? Ease of use is necessary.
• Desirable. Value of image, identity, brand?
• Findable. Can users find what they need?
• Accessible to people with disabilities?
• Credible. Do users trust and believe us?
• Valuable. Does all the above deliver value to
users and all other stakeholders involved?
 05.
Market Research for New
Product Development
 User Research for New Product Ideas
• Lead user research is used if experience is rich.
• Observe users works where the user experience
is low and cannot be articulated (users are kids)
• Quality function deployment covers more users
– works with moderate user experience levels.
• Idea competitions covers even more users – it
works well with lower levels of user experience.
• Crowdsourcing of ideas covers most users – it
works when user experience is far more varied.
 Market Research for New Products
• Customer surveys are typically very expensive –
hence we have to optimize on customer contact
• Such research is different from market research
on the marketing and sales of existing products.
• Large sample customer surveys are not required
as the focus of the market research is to identify
what’s missing in current products & is desired.
• So a careful choice of a few users and non-users
can help identify the missing and latent needs.
 Market Research for New Products
• Research indicates that limited numbers as low
as 30 are enough to identify 90%-95% of needs.
• Interviews will typically reach saturation once
all major needs are identified by the researcher.
• Questions are only on typical uses of product,
what they like/dislike about it and suggestions.
• Go back to the interested ones with prototype.
• Interactions between users in focus groups may
reveal insights that interviews may not reveal.
 Kano’s Model of User Preferences
• All identified user needs are all not the same.
• Kano classified preferences into five types to
show what matters to users and in what way?
1. Must-Haves (it is essential to include them)
2. Attractive (unexpected and can be premium)
3. One-Dimensional (will pay more if required)
4. Indifferent (no impact - users will not pay)
5. Reverse (negative impact -users will reject)
 Using Kano’s Model of User Preferences
Using Kano’s Model makes the feature prioritizing
clearer. Here is how you make product decisions:
1. You have to meet the minimum requirements
for all of the must have attributes identified
2. Add value with the one-dimensional attributes
3. Infuse a few attractive attributes to really
enhance the experience and to charge premium
4. Do not invest in indifferent or reverse ones.
 Product Variety Matrix
One D’nl Minimum Satisfier Satisfier
Attractive Satisfier Level 1 Level 2
No Must Have Upgrade A Upgrade B
Delighter Configuration
Delighter 1 Basic + Upgrade A+ Upgrade B+
(premium) Delighter 1 Delighter 1 Delighter 1

Delighter 2 Basic + Upgrade A+ Upgrade B+

(premium) Delighter 2 Delighter 2 Delighter 2
The House of Quality
Technical Correlations
Customer
Needs and Technical
Benefits Response
Planning
Matrix

Competitive
Relationships Technical
Technical Targets Benchmarks
QFD & Changes in the Design Process

Number Conventional
of Wisdom
Design (No QFD)
changes
With QFD

Time in Months
Late design changes cost money
 What are the benefits of QFD?
• Increased customer satisfaction
- enhanced quality of the new product
- new product is less costly to make
- new product is delivered on schedule
- new product is what the user wanted
• Improved development cycles
- shorter development cycle times
- earlier resolution of design changes
- minimized start-up difficulties
 What are the benefits of QFD?
Better internal knowledge transfer
- knowledge is preserved in a compact form
- tradeoffs on key product features is clear.
- reworking on any product feature is easier.
- visual thinking is encouraged in the team.
- the QFD gives teams a common language.
- cross-function team building will happen.
QFD is very appropriate for complex products
but may be an overkill for very simple products
 Let Users Design their Own Products
• Tool-kits enable users to experiment with
product features in relation to their specific
needs and to customize their own product.
• User tool kits are an effective response to the
difficulty in assessing user needs accurately.
• Highly heterogeneous demand in the product
category is very difficult to meet directly.
• Higher customization is desired by users and
can be provided by company with tool-kits.
Let Users Design their Own Products
• Tool-kits can enable users to customize their
product as per their tastes and preferences.
• Tool-kits encourage users to experiment and
discover new configurations ignore by firm.
• Once users design a tool-kit based prototype
for themselves the firm can then deliver it.
• The tool-kit approach has been found to
have scope in a wide range of industries.
 Examples of User Tool Kits Applications
• Airlines allow users to search an itinerary
within the customer’s time line and budget.
• Insurance firms provide spreadsheets to users
to help them craft their own insurance product.
• Integrated Circuit designs - buyers can built a
simulated circuits for the developers to design.
• Fashion designers have provided a tool-kit of
accessory patterns for users to combine in use.
• Jewellers provide a video wall for women to try
a range of jewellery on their image on the screen.
 Examples of User Tool Kits Applications
• Hair stylists allow customers to experiment on
their screen image to find styles that they like.
• Fast food restaurants allow customers to save
by combining multiple items by using a code.
• Websites allows users to customize the news
topics and the advertisements that they prefer.
• Companies provide processed ingredients for
chefs to experiment for creating new dishes.
• Tool-kit ideas save costs and improve choices.
Requirements of Effective User Tool Kits
1. Enables users to make complete cycles of
trial-and-error learning within the tool-kit.
2. Provides adequate solutions space within the
tool-kit to cover all the high potential designs
3. Tool-kits are user-friendly- users can use their
own design language and simple design skills.
4. Tool-kits must contain an adequate library of
common use modules for its users (calendar)
5. Tool-kits are such that user designs are easily
translated without making minor revisions.
 Value of Effective User Tool Kits
• Effective tool kits can create a distinctive
competitive advantage that is harder to copy.
• The trial and error cycles done by the user and
not by developer cuts down development time.
• Tool kits can also revolutionize an industry by
drastic cost reductions while offering variety.
• Being first in using tool-kits helps companies
remain ahead of competition through learning.
• It is also a good way to learn about user trends
 Evaluation of Innovations
• Scoring and screening of product concepts.
• Concept testing trials and market research.
• Evaluation of risk/payoff matrix in stages.
• Evaluation of early prototypes by real users.
• Evaluation of real options in each pathway.
• Check on cost/benefit of delaying decisions.
• Awareness-Trial-Availability-Repeat Model.
 Awareness-Trial-Availability-Repeat Model
• Awareness – based on advertising of product.
• Trial – based on purchased trials (not free trial)
• Availability – in target market by distribution.
• Repeat – makes a second purchase after trial or
in big ticket cases recommends to any friend.
• Adoption of New Product = A * T * A * R
• All are assumptions and may be way off mark!
• Revised and repeated for the next time period.