Innovation Management PDF

3/9/2024 Innovation Management Chapter 6 Managing intellectual property Arsalan Safari Associate Professor 1 Learning Objectives - Introduction Type of IPs Patent Design Patenting Trademark Copyrights Trade Secret Summary 2 1 3/9/2024 Introduction Intellectual Property (IP) is any product of human i...

3/9/2024 Innovation Management Chapter 6 Managing intellectual property Arsalan Safari Associate Professor 1 Learning Objectives - Introduction Type of IPs Patent Design Patenting Trademark Copyrights Trade Secret Summary 2 1 3/9/2024 Introduction Intellectual Property (IP) is any product of human intellect that is intangible but has value in the marketplace. It is called “intellectual” property because it is the product of human imagination, creativity, and inventiveness. Traditionally, businesses have thought of their physical assets, such as land, buildings, and equipment as the most important. However, a company’s intellectual assets are more important these days. 3 Introduction The main idea from IP is to protect the assets and innovations we have developed from being used by others without our permission. This provides a core competency and competitive advantage by having something that is not available to others. Firms can also generate significant financial returns by licensing my IP to others. 4 2 3/9/2024 Need for a Lawyer If you have any type of IP, you need to seek a legal advice from a specialized lawyer to find the best course of action. In most cases, you can not undertake this kind of legal protection alone, as it is complicated and any mistakes could lead to serious financial loses. Having a good IP can enhance your position in market, as the sole owner of a specific asset. 5 Common Mistakes Common Mistakes in Protecting IP of Small Businesses Not properly identifying all of their IP Not fully recognizing the value of their IP Not legally protecting the IP that needs protecting Not using their IP as part of their overall plan for success 6 3 3/9/2024 Types of IP Forms Patents Trademarks Copyrights Trade Secrets 7 Patent A patent is contract between the government and an inventor It grants protection and prevent others from making, using, or selling the same idea/technology for the term of the patent Issued by the patent and trademark offices. For example, in US: www.uspto.gov They provide protection for a period of time (usually 20 years), after granted which becomes available to anyone. 8 4 3/9/2024 Patent Conditions To obtain a patent, the following conditions must be met: Novelty: something new. Non-obviousness: something unique, not obvious to find Industrial application (Usefulness): can be produced as a product or process in market. A patent is granted to the inventors or discoverers of novel devices, products, processes, equipment, materials, or those who substantially improve them. 9 Can we Patent this Product ? 10 5 3/9/2024 Filling a Patent Application The patent application must include: Evidence of being first to market Establish date of starting the invention Complete history and description of the invention Lists claims for the product’s usefulness(applications) Example: Fire alarm technology (airplane, ships, hotels, etc …. ) 11 Process of Patenting 12 6 3/9/2024 Strategic Motives for Patenting Access to new knowledge that no one has it Ability to open new markets, and control competition Establishing technological leadership Enhancing reputation Setting standards Blocking similar development (putting barriers) Converting competitors into defenders 13 Patenting Facts ▪ Same rights and protection for all contracting states PARIS Convention Provisions (for Worldwide Patenting) National Treatment ▪ Standardization ▪ Patent legislation Common Rules ▪ Country interactions for patenting ▪ Other common rules Right of Priority ▪ Priority for the first patent application (in all contracting states- for 12 months) ▪ Patenting family 14 7 3/9/2024 Design Patenting To protect the visual appearance of a product, not the product features It prevents others from using the same design Issued by the Patent and Trademark Offices (e.g., in USA: www.uspto.gov It provides protection for 20 years, after that it becomes available to anyone 15 Design Patenting (Examples) 16 8 3/9/2024 Design Patenting (Examples) 17 The Cost of Patent Infringement Example: RIM settles NTP patent fight with $612.5 M payment 18 9 3/9/2024 Trademarks A trademark is any word, name, symbol, or device used to identify the source or origin of products or services and to distinguish those product or services from others. Trademarks also provide consumers with useful information. Registering the trademark can be through: the Patent and Trademark Offices (for example: in US: www.uspto.gov) It must be selected carefully from the beginning, as it represents the successful story of the firm in customer minds Steps include: selecting→ searching→ Applying 19 Trademarks Coca-Cala Entel Starbacks Tony Any attempt to imitate a similar trademark will be rejected, as it constitutes an attempt to mislead customers. 20 10 3/9/2024 Trademarks Infringement Between 1978 and 2006 there were a number of legal disputes between Apple Corps and the computer manufacturer Apple Computer (now Apple Inc.) over competing trademark rights. The companies reached a final settlement, as revealed on 2007. 21 Trademark Change over Time 22 11 3/9/2024 Trademark Change over Time Main reasons: Rebranding Modernization Mergers and Acquisitions International Expansion Repositioning Crisis Management Legal Reasons 23 Copyrights A copyright is a form of IP protection that grants legal rights to the owner of a work of authorship It prevents others from printing, copying, or publishing any original works of authorship (e.g., adds, music, books, computer software, articles) Increasingly relevant due to growth in use of Internet Registered with Copyright Office www.copyright.gov Applicable for duration of ~ 70 years (in Qatar?) 24 12 3/9/2024 Copyrights General conditions of copyright: Original work and unpublished Recorded on a published physical tool It has some creativity compare to previous work Example: you can read 100 book on any topic and write a new book, by rephrasing ideas from all other books/add new ideas. You can redraw any figure by modifying it. Example: student exam paper is protected by copyright law, without any need to register the work. 25 Copyrights – What is Protected? Literary works Musical compositions Computer software Dramatic works Pantomimes and choreographic works Pictorial, graphic, and sculptural works 26 13 3/9/2024 Trade Secrets Protection against disclosing information that could be damaging to firm (if stolen by others) Applicable as long as the idea or process remains a secret (not placed in a common area) The secret idea must have economic value Example: Coca-Cola recipe, KFC spices, search engine algorithms, … 27 Trade Secrets – Measures to Protect! Restricting access Labeling documents Password protecting confidential computer files Maintaining logbooks for visitors Maintaining logbooks for access to sensitive material Maintaining adequate overall security measures 28 14 3/9/2024 Summary Firms need to protect their IPs to preserve their core competences and maintain competitive advantages These days, a company’s intellectual assets are often more important than their physical assets A firm should develop an inventory of its existing IPs (registration of patents, trademarks, copyrights, etc.). The firm should also identify works in progress to ensure that they are being documented and protected in a systematic, orderly manner. 29 Exercise 30 15 3/18/2024 Innovation Management Outlines Knowledge Definition Creating New Knowledge Organizational Structure and Knowledge Chapter 7 Types of Knowledge Managing organizational knowledge Tacit Knowledge Management Arsalan Safari Knowledge and Core Competencies Associate Professor Organizational Learning 1 2 Introduction Knowledge! Knowledge is facts, information, and skills acquired through experience, experiment or education. All innovations and discoveries are based on the new knowledge. New (more) knowledge is important for these reasons: Knowledge is power, meaning that we have to find ways to manage knowledge and increase its impact to generate more innovations. Allow our brains to function more smoothly and effectively Increase creativity → new ideas (more innovations) At the same time, we need to protect it to prevent any replication by competitors. Enhance skills → Finding problems and effective solutions (cost) Provide faster learning process and make better decisions Create competitive advantage in the market 3 4 The Tangibility of Knowledge Creating New Knowledge Knowledge can be created through: Practice: by doing work, Research and Development (R&D) Collaboration: with other organizations, universities Interaction: with customers, competitors, global markets, etc. Experimentation: Creating new knowledge through systematic testing and analysis. Education: by reading available knowledge and improving it Others..! Practical knowledge Once we generate new knowledge (with novelty), it can be protected by a patent, so it is our intellectual property for a long time !!! Product / service knowledge → know-how 5 6 1 3/18/2024 Organizational Structure and Knowledge Knowledge from Interaction Organizational structure significantly impacts knowledge sharing → Consider flexible policies and routines that encourage interaction, communication and knowledge sharing. Interaction with the external sources can produce effective information (e.g., customers, suppliers, complementors, competitors). Large firms with many departments face big challenges, as they have strict policy for communication More interactions → More learning Smaller firms are more dynamic and able to share knowledge. Explore social media / internet The following are examples of such interaction: Examples: Google encourage interaction during launch time! Apple tries to organize its enterprise like startups! Review newsletters/articles/books/podcasts Explain a concept to experts (lead users), ask effective questions The knowledge base of an org. Attend conferences / exhibitions Social interaction 7 8 Types of Knowledge Types of Knowledge Small part Explicit Knowledge: Knowledge that can be codified, that is, expressed in numerical, textual or graphical terms and therefore is more easily communicated. Example: the design of a product. Tacit (implicit) Knowledge: Knowledge gained from personal experience that is more difficult to express (or write down), usually stored inside person’s mind. Example: how to ride a bicycle. 9 Big part 10 Tacit Knowledge This knowledge is hard to write down, because it is complicated, which makes it very critical. Most of promising innovations come from this type of knowledge, therefore, we need to find ways to enhance and manage it. Tacit knowledge is a crucial asset for firms → We need to transfer it across the organization effectively, By using any possible strategy, otherwise the development process will be slow. Effective strategies to transfer (communicate) tacit knowledge: 11 Tacit Knowledge Management 1- Collaboration (sharing culture) Working in teams is a good way to share and transfer knowledge across members and exchange experiences. 2- Interaction by social networks Online interaction provides an opportunity to learn through shared conversations among members. Especially, if they are located in different departments or countries. 12 2 3/18/2024 Tacit Knowledge Management Tacit Knowledge Management 3. Show Your Work Presenting your work is a strategy that enables transferring the tacit knowledge. Example: a surgeon using video during surgery to show operations for medical students. 4. Storytelling Telling a story can take a form of open discussion and present many important information. Example: using interviews with senior members to explain their general experience and challenges, which can be recorded for everyone as part of a knowledge management system. 13 5. Tracking Lessons Learned We can record lessons learned from specific process, so others can benefit from experiences in which they did not participate. Example: recording of interview sessions at the end of a project to define the key challenges and the best lessons learned, so others can see them anytime. 6. Guided Experience It depends on deep mentoring approach to transfer all details. Example: Expert engineer showing technicians all the steps to perform machine service and calibration (good for newcomers). 14 Challenges in Knowledge Management Tacit Knowledge Management 7. Using Special Software Some firm develop a special software that can contain most of the previous strategies, with full recording and retrieval of information. Since knowledge is important for innovation process, there are challenges in managing each step of its development: They can record all communication activities and use artificial intelligence (AI) Identifying and codifying existing knowledge Generating and acquiring new knowledge Storing and retrieving knowledge Sharing and distributing knowledge across the organization Utilizing and embedding knowledge in products / services Using previous strategy effectively can help to overcome these challenges 15 16 Knowledge and Core Competencies Core Competencies refers to the capabilities, knowledge, skills and experiences that establish a firm’s "major strength” A firm’s core competency is distinctive, and cannot be easily replicated by other firms → Typically, it resides in people not in physical assets. In industries where technological innovation is important, firms need more than a set of core capabilities in R&D. → Thus, internal knowledge should be enhanced to sustain unique core competencies. Core Competencies Examples: Skills in manufacturing a high-quality product System to fill customer orders accurately and quickly Fast development process of new products Better after-sale service capability Superior know-how in selecting good retail locations Innovativeness in developing popular product features Marketing and product display skills Expertise in an important technology Expertise in integrating multiple technologies to create whole families of new products All come from knowledge → Org. learning is crucial. 17 18 3 3/18/2024 Organizational Learning Organizational learning is the process of creating, holding, and transferring knowledge within an organization. The whole can be viewed as more than the sum of the parts Organizational Learning In most organizations, individuals are afraid to share the knowledge they’ve obtained over many years (a source of power). → The internal culture should encourage knowledge sharing and exchanging ideas, by having a good reward system Developing new knowledge (creative ideas) is an effective factor in the innovation process. In Practice, each firm can adopt various strategies to achieve this goal. 19 20 Organizational Learning Example of Organizational Learning Organizational Learning Strategies OUTCOMES PROCESS Align your organizational learning strategy with your business strategy Integrate organizational learning into your corporate culture Facilitate experimenting Work on your knowledge management Promote collaboration Consider the remote/hybrid setup Measure the progress 21 22 Summary Exercise Knowledge is the most important factor in generate new ideas. Listen and discuss: https://hbr.org/video/2226587714001/the-importance-oflearning-in-organizations Knowledge sharing across the organization facilitates defining optimal solution in short time Tacit knowledge is hard to transfer across individuals, and critical to generate innovative ideas. A solid organizational learning strategy helps a company improve its competitiveness, productivity, and profitability through learning. Making it an integral part of your organization’s overall learning strategy brings you closer to reaching your organizational goals. 23 24 4 Innovation Management Chapter 8 Open Innovation and Collaboration Arsalan Safari Associate Professor Outlines Open Innovation Advantages of Open Innovation Strategies for Open Innovation & Collaboration Challenges of Open Innovation Technology Transfer Introduction External environment could contain many sources of new ideas. It is difficult to own all the required capabilities and knowledge in one firm. → Therefore, we need to be open to the outside world, and collaborate with others who have better knowledge. This will enhance the firm innovation capacity. Open Innovation vs. Closed Innovation Open Innovation Closed innovation is using the firm’s internal knowledge to develop products. Open innovation (OI) integrate external knowledge (with internal) to develop products, which can lead to better outcomes. In practice, this can be done through collaboration with other organizations using different strategies to reach common goals. Drop-out Rates of Ideas in R&D Projects How many Ideas Firms can Generate? The previous plot illustrates that firms constantly need large amount of creative ideas to introduce new products (or develop existing ones). In practice, it is impossible (and very expensive) to keep developing a high rate of good ideas, especially with global competition. Therefore, firms must open their doors for external ideas to help to improve its innovation process. Details of benefits?! Advantages of Open Innovation 1- Access talent Lack of talented employees can hinder innovation capability. → OI acts as a bridge between internal teams and outside organizations to bring new ideas and solutions. 2- Access the right infrastructure Inadequate facilities for developing new products can hinder innovation. → Building a relationship with others could allow you to bring your product to market quickly and efficiently. Advantages of Open Innovation 3- Improving old products and services Sometimes, you don’t need to create new products, BUT you need some ideas to reshape existing products (or add features). → OI can give access to endless ideas. 4- Create new revenue streams It is not only about getting ideas from outside. OI allows to take ideas or projects generated internally but can not be developed. → They have the potential to create new revenue streams if they can be develop externally. Advantages of Open Innovation 5- Reduce costs and time to market In large firms, routines might slow the innovation process. OI with smaller firms (known for flexibility) can help to reduce costs and speed up the development process. (e.g., Toyota is developing the flying car with Joby Aviation) 6- Increase competitive advantage By accessing new ideas, the firm can enter new markets by introducing new products. Furthermore, the internal knowledge of employees can be increased by constant interaction with external environment. Strategies for Open Innovation & Collaboration 1- Strategic Alliance: An alliance is a collaboration between two firms to achieve mutual goals (product development, market access, knowledge sharing, etc.). 2- Joint Venture: A joint venture is a collaboration between two firms by creating a new legal entity (new firm) to achieve mutual goals. (create a real-time system to improve healthcare quality) Strategies for Open Innovation & Collaboration 3- Outsourcing: Innovation outsourcing is a strategy whereby a firm delegates the idea generation to other firms with high expertise or low cost. (e.g., Software development from India / AI) 4- Co-creation: Using users to generate ideas and feedback. Usually, users provide great ideas to develop products that reflect their needs. (e.g., IKEA ask customers to help in proposing new furniture concepts) Strategies for Open Innovation & Collaboration 5- Incubators and Company Accelerators: Incubators and accelerators have the capacity to support the external ideas and transform them into small firms, by providing tools and space for establishing new ventures. Incubators focus on early-phase startups that are in the stage of developing business ideas. Accelerators focus on speeding up the market growth of existing businesses that already have a functioning product. Strategies for Open Innovation & Collaboration 6- Challenges / Camps: OI challenges (camps) are competitions designed by organizations where everyone around the world (or from a specific location) is invited to present creative ideas. It can be for a prize, free entry, or a promise of employment. Running an Open Innovation “Challenge” 1. Define your innovation goals Set clear innovation goals that connect to your business 2. Select the participants Identify the domain of participants (internal/external), and Set out what you expect from them. 3. Set the critical success factors Clearly define the success factors, including the number of participants, the number of ideas generated, how many words to describe the idea…. Running an Open Innovation “Challenge” 4. Choose a platform Choose how you are going to run the challenge. It can be a live competition (local challenge), using online platform, or by using innovation management software like “Idea Drop”. 5. Write the challenge details - Title: should be attractive - Description: why the challenge is being conducted and what you will achieve - Supporting documents/images: to give clear instructions about how to participate in the challenge (and the timelines) Open Innovation Issues/Challenges OI can bring many challenges and issues to the firm if it is not managed properly: 1. Unclear goals It is important to know what firms are looking for before they start an OI process, and whether it is compatible with their situation. 2. Wrong type of participants Finding the right type of participants may be hard and costly. It is important to understand what we wish to achieve, so we can define the relevant participants. (develop kitchen tool → women who like cooking) Open Innovation Issues/Challenges 3. Building an effective process Managing OI activities requires an effective process with clear goals and communications weak. 4. Developing and implementing ideas OI can be successful if ideas are implemented in practice well, but with a large number of ideas, it can be hard to define the most promising ones. → Thus, it is important to have a method for ranking ideas based on their importance before developing them. Innovation Funnel Open Innovation Issues/Challenges 5. Intellectual property rights With large number of participants, it is hard to know the origin of all ideas, or if they are stolen. → Thus, it is important that all participants give written consent of the idea’s originality. 6. Terms and conditions The OI agreement with external participants should be carefully crafted to define the idea’s ownership. Otherwise it may result in challenging situations. Ideas can be shared among parties. Challenges of Open Innovation 7. Lack of participation Engaging in OI requires high motivation, especially from talented participants. → Thus, rewarding and recognizing good ideas are crucial. Open innovation can facilitate technology transfer by providing a framework for firms to acquire external technologies and knowledge and integrate them into their own innovation processes. Technology Transfer Technology Transfer is the application of technology to a new use or user. It is the process by which technology developed for one purpose is employed either in a different application or by a new user. The activity principally involves the increased utilisation of the existing science/technology base in new areas of application as opposed to its expansion by means of further research and development. (Langrish et al., 1982). Technology Transfer The tangibility of knowledge (recall): Technology Transfer (Economic Prospective) Models of Technology Transfer Licensing Science park model Intermediary agency model Directory model Knowledge Transfer Partnership model Ferret model Hiring skilled employees Technology transfer units Research clubs European Space Agency (ESA) Consultancy Models of Technology Transfer This four-stage conceptual framework (4A) is used to explore the processes involved in inward technology transfer. Summary Open innovation is very useful for obtaining many ideas from the surrounding environment, and it can significantly speed up the innovation process. There are many effective strategies for open innovation and collaboration (discussed earlier). However, it can lead to some challenges if the process is not managed effectively. Open innovation can facilitate technology transfer. However, the management of technology transfer is not entirely straightforward. A wide variety of models of technology transfer have been used over the years, particularly in the past 20 years (discussed earlier). Exercise 4/20/2024 Innovation Management Chapter 9 New Product Development Arsalan Safari Associate Professor Outlines New Product Development (NPD) Sequence of Events During NPD NPD Four Stages Model Customer Roles in NPD A new product has different interpretations Educating Customers for New Product Product Failure Adopting Sustainable NPD (S-NPD) Strategy 1 4/20/2024 Introduction New product development (NPD) is a part of the innovation process, where innovative idea becomes real and tangible New products must generate profits to cover the initial cost NPD requires significant market research to introduce the right product to customers Some products good fail after lunching to market From Idea Generation to Entrepreneurship FINAL SOLUTION (Startup Phase) ANALYSIS/ RESEARCH 2 4/20/2024 From Idea Generation to Entrepreneurship Business Approach Generating/selecting an Idea This part is covered in innovation management section (i.e., needs assessment, concept development, detailed design,..) Developing successful business ideas Including completing feasibility Analysis and business plan Moving from an idea to a startup Implementing business plan; building the management team; obtaining seed funds, commercialization (sales & distribution)… FINANCIAL FEASIBILITY …. Expanding the firm’s activity; commercial maturity; market expansion & consolidation … If Yes for All ORGANIZATION FEASIBILITY  Purpose      Managing and growing the firm Objectives INDUSTRY/MARKET FEASSIBILTIY  Management Description of end state  Resource Early identifiedsufficiency risks and issues PRODUCT/SERVICE assumptions Industry attractiveness  …. Major and constraints FEASIBILITY  Old or new/growing rate  Product/service details  … Interdependent projects  … Life  cycle Product/service desirability  … Target market attractiveness  Manufacurability/durability/safety/…  … Detailed Business Plan - For implementation - For investors - For owners/partners  Fatal flaws  Product/service demand  Potential customers’ feedback Business development plan of an innovation can be started after Concept Development phase discussed earlier. Idea Generation (Opportunities) 3 4/20/2024 Sequence of Events During NPD linear NPD model Cost / Profit During NPD When sales start, we begin to cover the initial cost. The more we sale, the quicker we cover the development costs. Profit Cost Zero profit 4 4/20/2024 NPD Concepts Business opportunity: A possible idea that may be transformed into a revenue-generating product. Product concept: A physical form or a technology plus a clear description of benefit (features). Screening: A series of evaluations, including technical, commercial and business assessments of the concept. Prototype: A tentative version of a product including features and benefits. Ideas generation: identifying the business opportunities for new products. Idea screening and selection: choosing the best product concept that satisfy certain criteria (technical, commercial, financial, resources…) Product development: translating the selected idea into a physical product or a new feature. Product introduction: testing and launching the new product to markets. Customer Involvement is Important NPD Four Stages Model The process cycle is repeated to improve the product over time 5 4/20/2024 An activity-stage model Source: Adapted from Crawford, C.M. (1997) New Products Management, 5th edn. Concurrent engineering (example of tech-based products) 3. Technical development 1. Strategic planning marketing marketing production production engineering engineering 4. Commercialisation marketing production engineering marketing production engineering 2. Concept generation 6 4/20/2024 Product Life Cycle The demand for each product will decrease after sometime; unless it was replaced by a newer version “more attractive”, or more features are added to support it (by innovation). This is why NPD is a critical process for firms to stay in market. Customer Roles in NPD Since the new product are for markets/customers, they should be included in every stage to ensure that the product reflects their needs. Customer role NPD Stage Key issues Customers as resource for many ideas Ideas generation - Finding the right customer groups to collect reliable information. - Finding ways to motivate them to participate. - Tools to capture customer knowledge - Differential role of existing (current) and potential (future) customers Customer as co-creator Idea screening and selection - Ranking the ideas based on their importance to customers. - Choosing the best concept that creates more values 7 4/20/2024 Customer Roles in NPD Customer role NPD Stage Key issues Customer as co-creator Product development - Involving customers in a wide range of development tasks, to define the final product design. - Building a prototype - Defining the appropriate product features (size, design, taste) Customer as user Product Introduction - Verifying product features - Testing product performance - Building customer service centers What Kind of Customers Needed for NPD Customers involvement in the NPD process is critical, as they provide valuable information and ideas. However, I need to be careful in selecting these customers, to get reliable and useful information. Lead users are the best source of information for NPD: The first to buy products (loyal and passionate to improvement) Generate creative ideas to improve the product (new one) Contribute to identification of future opportunities (vision) Welling to participate in evaluating emerging concepts Can be used to develop and test new product features 8 4/20/2024 Examples of a Bad Products A new product has different interpretations The concept of new product varies across different industries. For example, in the detergent case, the following are considered a new products: 1- A minor change leads to a new product. For example, improve the strength of detergent 2- Adjusting the package leads to a new product 3- Introducing a new design leads to a new product 3- Introducing a new smell can produce a new product 9 4/20/2024 A new product has different interpretations Introducing the same product with a new size (change packaging), with the same features (taste)  Common in the food industry. A new product has different interpretations Introducing a new version of the product by adding new features. For phone industry, it usually happens annually. 10 4/20/2024 A new product has different interpretations Introducing a totally new product by creating new design. Require significant recourses and time to come to market Educating Customers for New Product Sometimes new products are initially rejected by customers, but later on they become successful (after realizing their benefits). Examples: Fax machines 1960s: Initially rejected by consumers who could not see any application for it. Microcomputers 1960s: Initially consumers could not predict all the potential uses for microcomputers. Dyson bagless vacuum cleaner 1990: Consumers did not want to see dirt collected in a transparent container. Later on, became very successful (seeing the amount of dirt!). Chryslers Cruiser 1990s: This product was not rejected, but expected to be good for a small market. Later on, it was widely accepted in the industry. 11 4/20/2024 Educating Customers for New Product It is important to introduce totally new products to market,  Creating a competitive position (controlling price) However, even if a product is developed with the help of some customers, others may not accept it (due to its complete novality). Therefore, firms should launch a robust marketing campaign to educate the mass market about the detailed value of the new product. Example: When I-pod was introduced, they gave a detailed explanation to its benefits: saving 500 songs, ability to change songs, no need to carry many CD/ cassette, save the songs that you like, easy to carry, it comes with different colors…. NPD Across Different Industries The level of technical activities is more intense in some industries, which experience more complicated processes. (Engineering) (Business) Fast Moving Consumer Goods (beverages, healthcare, household and personal care) 12 4/20/2024 Product Failure This can happen when customers refuse to buy it, because it is not attractive or reflect their needs, or not aware of its value. This is why it is very important to integrate them in each stage of NPD, and educate them Finding the right communication channel with customers is important to define their needs accurately. Sometimes, the new technology might be amazing, but it should be reformatted to fit customers needs. Product Failure 13 4/20/2024 Reasons for New Product Failure Adopting Sustainable NPD (S-NPD) Strategy Sustainability is becoming a component of business practices (Chpt. 5) S-NPD involves introducing a new product that considers sustainability criteria at each stage,  Focusing on minimizing negative impacts on society and environment. Example: 1- Reduce energy consumption 2- Reduce material consumption 3- Adopt recycling programs 4- … 14 4/20/2024 Adopting Sustainable NPD (S-NPD) Strategy Advantages: Reduce operation costs (energy and water costs) Attract new customers and increase sales (green products) Tax incentives (adopting Sust. strategy) Reduce negative impact on society and environment (enhancing public image) Boost workforce morale and innovations (caring for community) Example VW 3M 3M has over 60,000 products  saved $ billion by adopting S-NPD Volkswagen (VW) 2015 fraud in air pollution sensor  lost over $ 35 billion 15 4/20/2024 Summary NPD offers organic growth for firms. NPD has to go through multiple stages.  Necessitate effective project management The marketing and R&D interaction is a critical dimension of NPD. Customers can have pivotal roles in NPD, and educating them is crucial. A new product has various dimensions that can be changed. Adopting a sustainable NPD (S-NPD) strategy is crucial in minimizing the risk of new product failure. 16