Chapter 7: New Offerings
7.1 The New Offering Development Process
7.1.0 Definitions
A structured process followed by businesses to create, refine, and bring new products or services to market.
- Focuses on innovation and problem-solving for customers.
- Reduces risks by evaluating ideas at various stages.
7.1.1 Idea Generation
- Definition: The process of brainstorming and gathering new product ideas based on solving customer needs or exploring innovative opportunities.
- Sources of ideas: employees, customers, suppliers and competitors.
Examples of Idea Sources
- Employees: For example, a Motorola engineer invented a phone-charging product while rollerblading.
- Customers: JCPenney involves customers in developing new lingerie designs for practical feedback.
- Suppliers: DuPont worked on new materials that led to innovative golf balls in partnership with Titleist.
- Competitors: Huawei closely observes Apple's products and adapts learning in their Mate series.
7.1.2 Idea Screening
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Definition:
Filtering and evaluating ideas to eliminate those unlikely to succeed.
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Objective: Save time and resources by focusing only on viable concepts.
7.1.3 Feature Specification
To understand the balance between cost, competitive pricing, and customer value.
- Breaking down product features and deciding which benefits to include at varying price points.
- Uses tools like Quality Function Deployment (QFD).
7.1.4 Development
Create prototypes; consider manufacturing, timelines, and costs.
7.1.5 Testing
| Testing Method | Definition | Objective |
|---|---|---|
| Alpha Testing | Internal testing by employees/teams. | Identify bugs early in development. |
| Beta Testing | External testing by a small group of users. | Gather real-world feedback pre-launch. |
| Usability Testing | Evaluates how efficiently users interact with the product. | Enhance user experience (UX). |
| A/B Testing | Compares two product variations to identify better performance. | Optimize design, features, or engagement. |
| Stress Testing | Tests product performance under extreme conditions. | Ensure stability and scalability. |
| Crowd Testing | Testing by a diverse group of real-world testers ("crowd") globally. | Gain feedback from real-world scenarios. |
| Automated Testing | Uses automation tools to execute and analyze tests. | Speed up process and improve accuracy. |
| Exploratory Testing | Unscripted testing focusing on identifying unique or unexpected issues. | Expand test coverage creatively. |
| Agile Testing | Integration of testing in every stage of Agile development cycles. | Continuous feedback and faster iterations. |
| Mobile Testing with Real Devices | Testing mobile apps/websites on real devices to ensure real-world performance and compatibility. | Ensure functionality across devices/locations. |
7.1.6 Launch or Commercialization
- Definition: Introducing a product to the market with a targeted customer strategy.
- Types of Launch:
- Full Launch: Global rollout (e.g., Apple iPhone launch events).
- Rolling Launch: Gradual introduction by region or segment (e.g., Huawei's phased market launches for new MateBook laptops).
7.1.7 Evaluation
- Definition: Reviewing the success or performance of the product after launch.
- Metrics to Analyze: Customer satisfaction, sales volume, and key feedback in the first 90 days.
* 7.2 Managing New Products: The Product Life Cycle
- Introduction Stage: When a product is launched in the market with heavy advertising.
- Growth Stage: When sales grow rapidly, causing competitors to enter the market.
- Maturity Stage: When sales stabilize and companies focus on staying competitive.
- Decline Stage: When sales drop as interest fades or newer products replace the old ones.