New Product Development Overview

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Questions and Answers

What is the definition of a product?

Something sold by an organization to customers. It can be a "Product" or "Service."

What is the core meaning of Product Development?

A set of activities that bring a product to market, starting with a market opportunity and ending with a product launch.

Which of the following are success criteria for new product development? (Select all that apply)

  • Product Cost (correct)
  • Profit (correct)
  • Development Capability (correct)
  • Development Time (correct)
  • Development Cost (correct)
  • Product Quality (correct)

What does "Product revenue exceeds product cost" mean?

<p>Profit</p> Signup and view all the answers

Development Cost includes the cost of machinery and tooling.

<p>True (A)</p> Signup and view all the answers

Which of the following is not a key function of new product development?

<p>Human Resources (B)</p> Signup and view all the answers

Development Time is irrelevant to the success of a product.

<p>False (B)</p> Signup and view all the answers

What are "Development Capabilities?"

<p>New skills and knowledge acquired during product development. They can offer potential competitive advantages for future products.</p> Signup and view all the answers

Which of these are challenges faced during the New Product Development Process? (Select all that apply)

<p>Trade-Offs (A), Economics (B), Time Pressure (C), Details (D), Market Dynamics (E)</p> Signup and view all the answers

What's an example of a trade-off frequently faced in product development?

<p>Balancing cost vs. performance. For example, a Tesla electric car might use expensive lithium-ion batteries for higher performance, unlike a Toyota Prius which employs less costly NiMH batteries.</p> Signup and view all the answers

Market Dynamics are primarily influenced by competitors' products and customer preferences.

<p>True (A)</p> Signup and view all the answers

What are some examples of details that need to be resolved during product development?

<p>For example, ensuring tool-less access for battery replacements, deciding if a particular feature justifies additional development time, and understanding how many details are needed to finalize the product are all crucial considerations.</p> Signup and view all the answers

Additional development time is typically a positive factor in a product's success.

<p>False (B)</p> Signup and view all the answers

What are the economic considerations in new product development?

<p>Significant investment is required to develop and market new products. Products must be profitable to provide a return on investment (ROI).</p> Signup and view all the answers

The "Act of Creation" in new product development is a highly collaborative process that involves multiple teams and diverse perspectives.

<p>True (A)</p> Signup and view all the answers

New products are often developed to meet societal needs, potentially improving lives or addressing critical needs.

<p>True (A)</p> Signup and view all the answers

Which of the following is NOT a personal appeal of new product development?

<p>Financial rewards (E)</p> Signup and view all the answers

Team energy is crucial for successful product development, as a committed, energized team can drive innovation and creativity.

<p>True (A)</p> Signup and view all the answers

Excessive involvement from upper management can hinder a team's creativity and decision-making autonomy, leading to a lack of autonomy.

<p>True (A)</p> Signup and view all the answers

Organizational Conflict can arise when project members are pulled to other tasks, leading to a lack of focus and dedication to the current project.

<p>True (A)</p> Signup and view all the answers

What are potential pitfalls of new product development? (Select all that apply)

<p>No autonomy (A), No Collaboration (B), Low Resources (C), Organizational Conflict (E)</p> Signup and view all the answers

Low resources can include a lack of staff, skills, money, or equipment.

<p>True (A)</p> Signup and view all the answers

Collaboration among various departments is crucial for successful product development. However, it's important to avoid overwhelming one function, like engineering, with input from other departments, leading to inefficiencies.

<p>True (A)</p> Signup and view all the answers

Flashcards

Product

Something sold by an organization to customers. Can be a product or a service.

Product Development

The set of activities to bring a product to market, starting with a market opportunity and ending with a product launch.

Product Quality

Performance, finish, reliability, durability, serviceability, and style of the product are key aspects.

Product Cost

Includes capital costs (machinery, tooling) and unit costs (cost to produce each additional unit).

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Development Cost

The cost of labor and prototyping to create a product.

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Development Time

How quickly the product team delivers the product, reflecting responsiveness to market demand.

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Development Capability

New skills gained to improve development of future products.

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Profit

Product revenue exceeding product cost. The primary measurement for for-profit organizations.

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Marketing (in NPD)

Identifies market opportunities, defines market segments, and identifies customer needs.

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Engineering/Dev (in NPD)

Defines the physical form, does technical design, and does industrial design.

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Manufacturing (in NPD)

Designs production systems, makes products, and purchases parts.

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Sales (in NPD)

Part of the NPD process to sell the product.

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Finance (in NPD)

Financial support of the NPD process.

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Legal (in NPD)

Legal requirements for the product and development.

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Time Pressure (in NPD)

Additional development time can mean lost market share or missed opportunities.

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Market Dynamics (in NPD)

New technologies, competitor products, and changing customer preferences.

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Trade-offs (in NPD)

Balancing different aspects of a product, such as cost versus quality.

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Details (in NPD)

The numerous decisions required in designing and developing a new product.

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Organizational Conflict (in NPD)

Conflicts between departments in an organization during product development.

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Low Resources (in NPD)

A lack of staffing, skills, money, or equipment during the product development process.

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No Collaboration (in NPD)

When different departments don't work together, hindering product development.

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Act of Creation (in NPD)

The satisfaction of creating something new from an idea to a successful product.

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Societal Needs (in NPD)

The possibility of satisfying unmet needs within society through new product development.

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Team Diversity (in NPD)

Differences in perspectives from diverse team members in product development.

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Team Energy (in NPD)

The enthusiasm and focus of a team during a new product development effort.

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No Autonomy (in NPD)

Lack of control or freedom in the development process due to external influences, like management interference.

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Study Notes

New Product Development: Definitions

  • A product is anything offered by an organization to customers. It can be a tangible good or a service.
  • Product development is a set of activities designed to bring a product to market. This includes activities from market opportunity identification to product launch.

New Product Development: Success Criteria

  • Profit: Product revenue exceeding product costs. Profit is a key measure for for-profit organizations.
  • Product Quality: The product's ability to perform its intended functions, emphasizing features like finish, reliability, and durability.
  • Product Cost: Refers to the costs associated with creating the product, including capital costs (machinery, tools) and unit costs (labor, materials).
  • Development Cost: This includes the cost of creating the prototype and manufacturing the initial production units. It assesses the efficiency of the development process.
  • Development Time: The time taken by the team to deliver the product; measures how quickly the team reacts to market needs.
  • Development Capability: New skills gained during development, potentially creating future competitive advantages.

New Product Development: Key Functions

  • Marketing: Identifying market opportunities, defining segments, and identifying customer needs.
  • Engineering/Development: Defining the product's physical form, conducting technical design, and carrying out industrial design.
  • Manufacturing: Designing the production system, manufacturing the product, and procuring parts.
  • Other Functions: Including sales, finance, and legal.

New Product Development: Duration & Cost

  • Metric examples: Annual volume, sales price, product life cycle, part count, team size, development time, development cost, and production investment.
  • Data provided for screwdriver, printer, and airplane products shows variations across these metrics.

Challenges in New Product Development Process

  • Trade-offs: Balancing cost, weight, and performance (e.g., Tesla vs. Prius).
  • Market Dynamics: New technologies, competitor products, and changing customer preferences.
  • Details: Addressing the numerous details involved in product design and functionality.
  • Time Pressure: The limited time available for development, which can impact market share.
  • Economics: Significant investment in product development, demanding profitability to create return on investment.

Personal Appeals of New Product Development

  • Act of Creation: Creativity in bringing an idea from prototype to success.
  • Societal Needs: Satisfying societal needs and potentially saving lives.
  • Team Diversity: Diverse perspectives lead to broader opportunities and solutions.
  • Team Energy: Positive energy and commitment within a focused team that creates something innovative.

Personal Pitfalls of New Product Development

  • No Autonomy: Upper management meddling in the development process.
  • Organizational Conflict: Conflicts between project and functional organizational structures.
  • Low Resources: Lack of staff, skills, money, or equipment.
  • No Collaboration: Over-emphasis on engineering with limited input from other areas like marketing and production.

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