Mkt Exam 2 10.3.12 Npd

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GO error

Back 1

false positive
Develop bad product and put it on market anyway

a failure at any stage (but especially at the screening stage) in the new product development process when a decision is made to proceed with a product which, in hindsight, should have been abandoned, see drop error, and new product development

Front 2

DROP error

Back 2

False negative
Drop great product

a mistake made by a company in deciding to abandon a new product idea that, in hindsight, might have been successful if developed, see go error, and new product development

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Open innovation

Back 3

open innovation is a term promoted by Henry Chesbrough, a professor and executive director at the Center for Open Innovation at the University of California, Berkeley, in his book Open Innovation: The new imperative for creating and profiting from technology.[1] The concept is related to user innovation, cumulative innovation, know-how trading, mass innovation and distributed innovation.
“Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology”[1] or "Innovating with partners by sharing risk and sharing reward.".[2] The boundaries between a firm and its environment have become more permeable; innovations can easily transfer inward and outward. The central idea behind open innovation is that in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license processes or inventions (i.e. patents) from other companies. In addition, internal inventions not being used in a firm's business should be taken outside the company (e.g. through licensing, joint ventures or spin-offs).[3]

less boundaries, newer approach, people outside of company play role, like consumer supplies or distributors

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Closed innovation

Back 4

Before being open, innovation happened in closed environments often performed by individuals, scientists or employees. However, the expression closed innovation was coined later and not before the paradigm of open innovation became popular by works of Henry Chesbrough[1] and Don Tapscott et Anthony D. Williams [2]
Closed Innovation was described in March 2003 by Henry Chesbrough, a professor and executive director at the Center for Open Innovation at UC Berkeley, in his book Open Innovation: The new imperative for creating and profiting from technology.[1] The concept is related to user innovation, Know-How Trading and mass innovation and subject of recent research projects [3]

The paradigm of closed innovation says that successful innovation requires control. A company should control (the generating of) their own ideas, as well as production, marketing, distribution, servicing, financing, and supporting. The main cause behind this idea is that, in the beginning of the twentieth century, universities and government were not involved in the commercial application of science. Some companies therefore decided to do it all on their own.

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3 things of consumer innovation

Back 5

Lead user

Innovation communities

Crowdsources

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Lead user (consumer innovation)

Back 6

Consumers who have 2 characteristics: 1. leading edge in trends
2. High benefit for solving need (consumers help with ideas)...snowboard backpack example

Also mountain bike example

IC: Ideastorm from Dell

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Innovation communities (consumer innovation)

Back 7

People gather (mostly online) and exchange ideas to further develop product-Nike Shoe and nutella

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Crowdsourcing-idea competition (consumer innovation)

Back 8

Companies ask for specific thing like product-new design for grocery bag

Website and t shirt design..weekly competition

Front 9

Common intuition..pro and con

customer innovation>

Back 9

Best sources of new product ideas (ask customer in like a focus group or brainstorm, think outside the box)

Problems: Flurry of brainstorming ideas often too far outside company's brand image or capabilities..customers usually only capable of thinking of minor changes...might be able to make product a little better, but chances aren't good to be truly innovative

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The challenge

Back 10

Hitting the innovation sweet spot

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Hitting the innovation sweet spot

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Develop products far enough from existing products to attract real interest..but close enough to fall within a company's existing positioning and capabilities (core competencies)

One commonly effective solution is systematic inventive thinking, which are creativity templates (from paper..disciplined brainstorming)

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Listening to the voice of the product (5)

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1. Basic idea behind the creativity templates (listen to voice of product, not consumer)

2. Begin by listing the essential elements of a product (physical components and attributes)

3. Also identify components and attributes of the product's environment (ambient temp, type of user)

4. Manipulate these elements in a structured way to come up with new potential products (draw ideas from existing products)

5. Drawing new product ideas out of current products (tap existing skills/technology to reduce the chance of coming up with impractical ideas) and (products that have survived contain info about what works; what people need)

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A conflicting perspective on product development (3 things)

Back 13

1. We've noted that we want to understand consumers so well that we create products that sell themselves

2. templates discussed here start with an existing product, not with customers and their unmet needs

3. Perspectives not necessarily inconsistent (can use templates to uncover products that meet needs)-templates still help uncover needs for users

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5 common creativity templates

Back 14

1. Subtraction
2. Multiplication
3. Division
4. Replacement
5. Attribute dependency change

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Subtraction (creativity template)

Back 15

Intuition is normally "more is better"-costly (more features add) and can result in feature creep (growing complexity of using product that can outweigh whatever new features it offers)

Subtraction is a particularly counterintuitive way to develop new products (take away what consumer want)
What happens if we remove components that seem desirable or indispensable

Examples: cassette player example..or taking sugar from Coke to make Diet

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Multiplication (creativity template)

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Make one or more copies of an existing product component (alter those copies in an important way)..like multiplying blades..adding more blades on razor with different angle

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Division (creativity template)

Back 17

Dividing an existing product into its component parts

Take 3 forms
1. Physical division (a product is cut along a physical line..taking radio from car)
2. Functional Division (product components with different functions are separated)-one product more than 1 function, split shampoo and conditioner
3. Preserving division (product divided in such a way that each part preserves the characteristics of the whole)-cut product into many pieces-like carpet for kids

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Take unification (creativity template)

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Assigning a new task to an existing element of the product or its environment (printing info in t shirt, or defrosting windshield with radio lines)

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Replacement (creativity template)

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Remove component and add something existing..like lamp on table..similar to subtraction

ASK ZAGLIA DIFFERENCE

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Attribute dependency (creativity template)

Back 20

Create dependent relationships between attributes of a product and attributes of its immediate environment (Pink and blue, boy and girl..diapers change color..visual aid for beer)

Some product characteristics naturally have a strong relationship with characteristics of the environment..transition glasses

Can innovate by creating these relationships where they don't ordinarily exist

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If product is high complex or if cost control is concern, which template should use?

Which is most difficult?

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subtraction

attribute dependency

Using great than 1 template is beneficial sometimes