New products are necessary for a company’s success.
Keeping your new product pipeline full is important to any company, but especially so for technology organizations. Consider the Product Life Cycle model as a model for determining a product’s lifespan. Companies need to continually launch new products and product improvements if the product line (and perhaps the company) is to survive. Fail to update your product lines and a competitor will move in and take your customers. To be successful, a company needs to reduce the costs and risks associated with getting new products to market.
Keep it Simple
Many excellent models for evaluating the value of a potential new product to you and your customers are available. Most are comprehensive and effective. The challenge is often encountered in the implementation of extensive, integrated NPD systems. They often require strong senior management oversight to ensure implementation at the grassroots level. The commitment needs to be fully in place, otherwise the NPD process is sometimes put on a back-burner.
Alternative: For many new products, establishing a simple, market-oriented approach to New Product Development can be effective. We provide you with a straight-forward, customer-oriented, cost-effective method for your marketing and product managers.
Benefits of improving your new product development game:
- First-to-Market can mean millions! Launch successful products, while your competitors continue hit-or-miss R&D.
- Dramatically increase your NPD success rate. Get new products out the door faster than your competitors.
- Reduce or eliminate non-productive internal discussions about which products to develop, and when. Create a customer-driven R&D process.
- Improve your company’s teamwork, communications, and management by creating a customer-driven R&D process.
New Product Development Issues
Developing new products is important to any firm, but it is especially true for technology-driven industries such as biotechnology and life sciences. Some of the obvious questions that often get overlooked or incorrectly estimated:
Customer and market need—Is there a need for the product?
Market share—How much of the market can we capture, and is the volume attractive enough for us?
Market size—Is the market big enough to be worth the investment?
Pricing—How should we price this product to ensure we can reach our revenue goals?
Where are the customers—Who are the customers for this new product, and how many are there?
Profitable market—Can we make a reasonable profit from this new product?
Decision-maker profile—Who are the decision-makers for this purchase?
New product development—Could we spend our New Product Development resources on a better product?
Competing technologies—Are competing technologies being developed that could leapfrog my product?
Market adoption rate—If I launch this product, will the market adopt it fast enough for me to turn a profit this year?
Reduce the Risk in New Product Development
BioPlan Associates can help you reduce these risks:
- Risks in new product development—A good product concept may not be a good investment. Evaluate the statistical probabilities of success.
- Risks in the new product development process itself—If a good process is in place, the risks can be controlled and managed.
- Internal risks involved in coordinating many departments—This process requires total organizational support. Without it, the NPD chain will be broken and the risk of failure will increase dramatically.
- Risks of incorrectly evaluating market acceptance—Your research might show that there is a need for the product, but is that information reliable, accurate, and valid?
Why New Products Fail
No NPD Process In Place: A primary reason new products fail is lack of a rigorous new product development process. One that requires accurate assessment of:
- Overall market demand
- Estimates of development costs
- Estimates of production costs
- Competitor reaction
“Over-Championing”: Another common reason new products fail. This happens when an executive or a product manager pushes a favorite idea. If a rigorous NPD process is not in place, there may be no checks or balances to validate the worthiness of a product. No questions will be asked about whether it should be invested. Over-Championing increases the risk of product failure because it moves the project outside a normal NPD process.
Poor Marketing: Another failure point is poor marketing execution of a good product. If a product is not well marketed, or if the product does not meet the technical specifications that the market demands, it can fail. Market analysis of acceptance of a new product can be challenging. Pre-market testing can be inaccurate. Further, since you may be estimating first-time sales for an entirely novel product concept, it is difficult to predict with certainty that your forecasts will be valid.
Try the BioPlan Associates 8-Step Process for New Product Development.