0ctober 15, 2005
Volume I Issue 17
New Product Development
Recently, I’ve been asked a lot about new product development.
It’s certainly a good idea to develop new products, but that doesn’t save
many NPD efforts from ineffectiveness and frustration.
Let’s start with my favorite question: WHY? Why do you want new products?
In this case, the WHY question really asks about your strategy.
Some businesses thrive, and survive, thanks to new products. New products
can be commoditized or obsolete in as little as three years, and a steady
stream of new products is needed to replace those that mature and decline.
In some sectors, the conventional wisdom is that only 10% of new products
succeed. The investment is large, but the returns generated by a winner are
large enough to offset the losses if the game is played right.
If you play the NPD game, be sure to play it right.
So WHY do you want new product development? What are your objectives?
What is your strategy? What game are you playing, and are you prepared to
play it right?
Are you looking for that higher margin niche opportunity? Are you looking
for a REALLY BIG niche that everyone else has overlooked?
As ridiculous as this sounds, I think it’s what a lot of people are looking for.
They won’t find it.
This stuff isn’t easy. The easy stuff has already been done.
You can go after the new technology, like digital, or RFID, and establish
yourself as the leader and wait for it to develop (better yet, help it develop).
Or, you can go for those niches where you have an exploitable advantage
and work hard to capitalize on that advantage.
Either way, you have to do the really hard work that pays off consistently:
establish a process for continuous new product development, track your
performance, and develop a steady stream of new product ideas. Then you’ll
need to evaluate them quickly and thoroughly, successfully implement a
high percentage of these ideas, and generate a large number of new
products that have small volume, high margin, and high growth. You need a
lot of these new products because the magic wears off in 3 – 5 years. That’s
why, if you want to play this game, at least 33% of your business must come
from new products this year. And next year. And every year.
How do you do that? You need to know your market, and then you need to
do the research and make sure you really know your market: test what you
think you know, and then explore what you don’t know. Study your markets.
Study your manufacturing capabilities.
It’s hard work, requiring marketing know how combined with technical know
Market-Intell can help.
For more information about new product development, and how to bring
technology and marketing together, call Jack Miller at 203 925 0326, or email
Jack Miller at email@example.com
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