| New
Product Development: Mistakes
Product
Pitfalls
It's hard enough
introducing a new product into the marketplace
because of the flood of manufactured goods
already available to consumers. What makes
the venture even more difficult, according
to TEC experts Mitch Goozé and
Nick Webb, are the mistakes companies
make again and again throughout the development
process.
"One of the
most common errors I see starts with the
company's basic attitude," Webb notes.
"I call it the 'not-invented-here'
mentality. Some businesses seem to feel
they're just not geared to come up with
new products. That's wrong! Most, if not
all companies, need to have a vibrant
new product development concept happening
today."
Other problems crop
up due to poor product definition, says
Goozé. These include:
- Product requirements
created with insufficient customer contribution
- Lack of defined
product strategy or plan
- Failure to
define simply and with reliability
- Inadequate
early funding
- Lack of required
equipment and facilities
- Marketing
requirements included too late, after
development is in progress
- "Project
creep" (constantly changing product
specifications requiring constant alterations
in design)
"We also find
that, in some new product ventures, activities
are completed for the sake of activity
itself," he adds. In these situations,
it's important to be seen doing
something -- but without a comprehensive
process for evaluating why a product is
being developed and who it's being developed
for, a business ends up with efforts going
off in all directions and resources wasted
on dead-end pursuits.
Other common new
product development pitfalls:
- Going
with what one customer demands. Although
the TEC experts stress the crucial need
for customer input in the new product
development process, dangers arise if
a company lets one customer -- however
important -- call the shots. "This
customer may want a new feature added
to your product line that meets his
or her needs alone, thus putting other
customers at a disadvantage," Webb
says. "When this happens, particularly
if the feature requires extensive re-tooling,
you place a great deal of time, money
and other resources at risk." Better
to balance this one customer's needs
with comprehensive market data that
covers the full range of your customers'
requirements.
- Making
promises your sales force can't keep.
A salesperson should always be included
in the cross-functional product development
team -- if for no other reason than
to ensure that scheduled rollouts are
timed with sales activities. You can't
afford to have the sales team promising
new, improved features on products if
they aren't ready to go.
- Approving
product ideas that are wrong from the
outset. "Too many organizations
spend time evaluating concepts they
shouldn't even be looking at,"
Webb says. He advocates creating "input
filters" -- a way of looking at
ideas that are genuinely synergistic
with the company's existing line and
its position in the marketplace; products
that match a rational developmental
timetable; and that genuinely meet a
market-researched customer need.
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Doing
the Homework
Many of the problems
connected to new product failure are linked
to poor up-front preparation, Goozé
notes.
"A surprising
number of new products move from idea
to development without doing the right
homework beforehand," he says. The
"right homework" includes:
- Comprehensive
market and competitive analyses.
Do you know if competitors are planning
a similar new product push? Are you
factoring in sufficient resources to
market, sell and promote the new product
once it's launched?
- Customer
research. Who are the customers
you see purchasing the new product?
How will it better meet their needs?
- Concept
testing. Do you have a cross-functional
project team in place? Is the team prepared
to collect and analyze data at each
stage of product development?
- Technical
and operations feasibility assessments.
Are your manufacturing capabilities
up to the task of generating sufficient
numbers of the new product? Are you
prepared to move from laboratory testing
to full-scale production?
Adds Webb: "Part
of the necessary preparatory work includes
product definition. You have to know what
your target audience is, a clear idea
of what benefits are going to be delivered
and a realistic view of performance requirements
and specifications."
Inevitably, some
new product ventures will fail during
the development process. Some studies
suggest that only one out of 20 ideas
survive to the launch phase. "It's
natural that problems will arise -- technical,
marketing, strategic problems -- that
doom the idea or simply make it impossible
to make at a profit," Webb says.
"But in many cases some preliminary
research can determine whether or not
it's feasible to move forward with a specific
idea."
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Additional
Resources
Below are links to
more best practices as defined by our
expert panel:
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