CHAPTER 1

Opportunity Identification
Company within a Company - new opportunities can come from many
- a group of people who lead the different sources: underutilized or new
development of a new product resources, mandates originating external to
the firm
New Strategy Inputs and Identifying
Opportunities Identifying the “Greenfield Markets’’
- Explicit consideration of the role of new 1. Find another location or venue
products in the organization is strongly 2. Leverage your firm’s strengths in a new
related to success activity center.
3. Identify a fast-growing need, and adapt
Product Platform Planning your products to that need.
- A product platform is defined as a set of 4. Find a “new to you” industry
systems and interfaces that form a
common structure. It is from this Recommendations for scouting for such
common structure that a family or a stream opportunities:
of products can be developed efficiently. 1. Recommendations for scouting for such
opportunities:
- a platform can be a technology, a design a 2. Find fringe markets that are becoming
subsystem, or anyone that can be shared by mainstream
one or more product families. 3. Find bottlenecks in the flow of trade,
and seek to eliminate them.
Bottom-up platform procedure 4. Look for “ripple effects” on business
- a strategic way to consolidate opportunities.
components within an existing family of
products to gain scale economies. Find Opportunities as Derived from Social
Trends
Trend 1: Just in Time Life Trend
Top-Down platform procedure 2: Sensing Consumers Trend 3:
- this platform was designed at the outset to The Transparent Self
become the basis for a family of Trend 4: In Search for ‘Enoughness’
products, possibly for years into the Trend 5: Virtual Made Real
future.- In other term, they started to design Trend 6: Co-Creation
a product that can
be in long-term use and can be the Non-Corporate Strategic Planning
basis of their product brand. - comes from the heads of the functions
in the firm—marketing, technical,
Brand platform manufacturing, and finance, and from
- a synthetic document designed to the planning of suppliers, customers,
compile all the elements that make up and others. Such groups frequently
the DNA of your brand, both visually and have the power to affect new product
ideologically work.

brand equity. Miscellaneous Sources

- the value of an established brand - some inputs can start at the lower level of
activity and influence upward, as when a
new product is so successful it drives
corporate strategy to change.
The Product Innovation Charter (PIC) ● Special Guidelines Section of
- It is a document prepared by senior the PIC - First to Market
management designed to guide the
business unit on the role of State-of-the-art-Breakthrough - most recent
innovation. stage in the development of a product,
incorporating the newest technology, ideas, and
Product Innovation Charter features.
1. Background - Key Ideas from the
situation analysis Leverage Creativity - It is a technique whereby
2. Focus - One clear technology a business investigates certain materials or
dimension or one clear market ingredients that are ideal for their product and
dimension then develops a new product to meet the demands
3. Goals-Objectives - What the project will of the target market
accomplish, either short-term as objectives,
or long-term as goals. Application Engineering - Where the
4. Guidelines - requirements imposed by technology may not be changed at all, but its
the situation or by upper management. use is new.

Sections of the Product Innovation Charter Adaptive Product - It is taking one's own or a
(PIC) competitive product and improving it in some
● Background Section - answers the way.
question: “Why did we develop this
strategy, anyway?” To the extent Imitation / Emulation - The enterprise is
necessary, it recaps the analysis behind it. enticed by multiple factors, especially the fact that
● The Arena (Area of Focus) Section pioneering innovators are profitable, then they
- In today’s competitive marketplaces, through learning, and imitation, take the
it takes focus to unlock the necessary pioneering experience, method of innovators,
power of innovation. and lesson.

Focus is generally achieved by the use of four types How to Prepare Product Innovation Charter
of strengths or leverage capabilities: ● Step 1: We are always looking for
- Technology opportunities, inside and outside the firm.
- product experience Each strategy can be traced to the strength
- customer franchise of the company involved. No one firm can
- end-use experience be strong in everything.
● Step 2: We have to evaluate, rate, and
● Goals and Objectives Section - the rank them.
standard definition is that goals are ● Step 3: We simply begin filling out the
longer-range, general directions of PIC from—focus, goals, and guidelines.
movement, whereas objectives are
short-term, specific measures of Product Portfolio Analysis
accomplishment. ● The New Product’s Strategic Fit
- As noted in Chapter 1, virtually all
Both goals and objectives are of three types: firms consider financial criteria
● Profit when selecting which products to
● Growth add to their portfolio. But the best-
● market status performing firms also include
strategic criteria in their
evaluations.
While by no means an exhaustive list, some common
strategic criteria might include:
● Strategic goals (defending the current
base of products versus extending the
base).
● Project types (balancing fundamental
research, process improvements, and
maintenance projects).
● Short-term versus long-term projects.
● High-risk versus low-risk projects.
● Market familiarity (existing markets,
extensions of current ones, or new
ones).
● Technology familiarity (existing
platforms, extensions of current ones, or
new ones).
● Geographical markets (balancing
sales or profits in North America,
Europe, and Asia).

Whatever criteria are used, the objectives of

developing the product portfolio remain the
same:
• Strategic alignment
• Assessing portfolio value
• Project Balance
• Number of projects
CHAPTER 2
Removal of Roadblocks
Finding the Right People When an idea comes up, listeners must first cite
innovative product programs and are also known for all its advantages. Then they can address the
being staffed with highly creative people—those negatives, but only in a positive mode.
that get original ideas with a high degree of
usefulness The Product Concept
When we launch a product in the market, it is still in
Genius Thinking Strategies: tentative form, because changes are quite apt
1. Geniuses find many different ways to to be necessary to make it successful.
look at a problem Therefore we say it is still a concept, an idea that
2. Geniuses make their thoughts visible still needs to be fulfilled.
3. Geniuses produce
4. Geniuses make novel combinations 3 Processes of Product Concept
5. Geniuses force relationships 1. Form: This is the physical thing created,
6. Geniuses think in opposites or in the case of a service, it is a sequence of
7. Geniuses think metaphorically steps by which the service will be created.
8. Geniuses prepare themselves for a 2. Technology: This is the source by
chance which the form was attained.
Technology is defined in product
Manager’s Role in Creativity innovation as the power to do work. In
Management has a role in getting the best out most cases, there is one clear technology
of its “ideas people.” Some firms truly embrace that is at the base of the innovation.
new ideas, treating them like corporate initiatives, 3. Need/Benefit: The product has value
organizing learning sessions, and importantly, only as it provides some benefit to the
sticking with them rather than moving on to the customer that the customer sees a need or
“next big thing.” desire for.

Obstacles to Idea Generation: The Concept Statement

● Group Think is a verbal and/or prototype expression that tells
● Targeting error what is going to be changed and how the
● Poor customer knowledge customer stands to gain (and lose). Early on, the
● Complexity information is quite incomplete, but when marketed
● Lack of empathy the concept is (hopefully) complete
● Too many cooks (internal competition)
Importance of Sources of Ready-made
Activities to encourage creativity Product Ideas
Today’s managers recognize that innovators are Experience in the field of product innovation has it
apt to be different and need special treatment. that 40 to 50 percent of new product ideas are
“Accommodative” is the word. Some firms ready-made, coming from a wide variety of
deliberately create competitive teams and have them sources.
race to a deadline.
User Toolkits
Special Rewards are a user-friendly set of design tools that
There is no question about the value of recognizing customers can use, together with their
creative achievement. But creative people are usually understanding of their own needs.
unimpressed by group rewards. But creatives do
like personal accolades preferably immediately.
Crowdsourcing
Many firms have recently gone online to obtain
product ideas from their customers efficiently:
this kind of open idea solicitation is known as
crowdsourcing.

Lead Users
Lead users are especially helpful in giving new
product ideas because their work is of the
problem-find-solve type

Open Innovation
has been defined as “the process a company
employs to externally search for. . . research,
innovation, new technologies, and products.”
The firm makes a strategic commitment to use the
knowledge in the external environment to improve
innovation performance.
CHAPTER 3 bulk of the sales potential in most
markets.
GATHERING THE PROBLEMS
● Step Three: Gather from these heavy
Internal Records users or participants a set of problems
most common source of needs and problems associated with the category. Study the
that comes from an organization’s routine entire system of product use or activity.
contact with customers and others in the This is the inventory phase mentioned
marketplace. earlier, but far more is involved than
just asking respondents to list their
Direct Inputs from Technical and Marketing problems. A good method of doing this is
Departments asking respondents to rate (1) the benefits
The only real problems with using in-house people they want from a set of products and (2) the
to report on customer problems are (1) each benefits they are getting. The differences
suggestion is usually someone’s perception of what indicate problems. Complaints are common
the customer problem is, and and often taken as requests for new
(2) there is usually a solution given with each products.
suggestion. In fact, sometimes we have to ask what
new product customers are asking for and then ask ● Step Four: Sort and rank the problems
why; the why is what we want to know at this time. according to their severity or
importance. Various methods can be
Problem Analysis used for this. (1) the extent of the
is much more than a simple compilation of user problem, and (2) the frequency of its
problems. Although the term problem inventory is occurrence.
sometimes used to describe this category of
techniques, taking the inventory is only the Methodologies to Use
beginning—analysis is the key The generalized structure of problem analysis
still contains the question of how to gather the
If you then observe their subsequent behavior, it list of customer problems. Many methods have
becomes clear their problem list is a far better been used, but the task is difficult. The customer
predictor than the want list. Users verbalize their or user often does not perceive problems well enough
wants in terms of current products, whereas to verbalize them
problems are not product specific.
Published Sources - are frequently useful—
Problem Analysis Procedure industry studies, the firm’s own past studies on
● Step One: Determine the appropriate allied subjects, government reports, investigations
product or activity category for exploration. by social critics, scientific studies in universities,
This has already been done and many others.
if the product innovation charter has a
use, user, or product category Stakeholder Contacts - The third, and most
dimension in the focus statement. productive, is to seek out the voice of the customer
(VOC)— that is, we will ask household or
● Step Two: Identify a group of heavy business/industry customers directly, via
product users or activity participants interviewing
within that category. Heavy users
are apt to have a better ● Interviewing - The most common
understanding of the problems, and method by far is direct, one-on-one
they represent the interviewing. Sometimes this is a
 full-scale, very formal, and scientific survey. communications medium such as online
social networking
● Focus Groups - The focus group is ● Discipline’s Panel - Their approach is
designed to yield the exploratory and to assemble experts from all relevant
depth-probing type of discussion disciplines and have them discuss the
required, and it can be easy and problem as a disciplines panel
inexpensive to set up and use.
Concept Generation Techniques in
● Observation - Observation methods are Action creativity-stimulating techniques that
rooted in sociological studies and involve can be used to generate concepts
watching customers (or noncustomers) using
products in their own environments. 1. Using Props
2. Role Playing
● Role Playing - Though role-playing has 3. Imitating Nature
long been used in psychology to enhance
creativity, there is little evidence of its
successful use in generating ideas for new
products.

Scenario Analysis

Scenarios take several different forms. First, we

distinguish between (1) extending the present to see
what it will look like in the future, and (2) leaping
into the future to pick a period that is then described.

Leap studies can be static or dynamic. In dynamic

leap studies, the focus is on what changes must be
made between now and then if the leap scenario
is to come about—the interim time period is the
meaningful focus

Solving the problems

Most problem-solving is probably done by
members of the new products group that has
been leading the concept generation work so
far. They do it instinctively, from the moment
they hear of a problem

● Group Creativity
● Brainstorming
● Online communities (or virtual
communities) have revolutionized customer
information gathering. An online
community can be defined as any group that
interacts using a
CHAPTER 4 identify. These phantom attributes don’t show up on
the lists, are not included as map dimensions, and by
Products are groups of attributes their absence distort the analysis.
A product is really nothing but attributes, and any
product (good or service) can be described by citing Comments on Gap Analysis
its attributes. All gap mapping is controversial, but perceptual
maps are especially so. The input data come entirely
Types of attributes: from responses to questions about how the choices
1. Features (what the product consists of), differ. Nuances and shadings are necessarily
2. Functions (what the product does and ignored, as are interrelationships and synergies.
how it works)
3. Benefits (how the product provides
satisfaction to the user)

Analyzing Product Attributes For Concept

Generation and Evaluation
Analytical attribute techniques allow us to create
new product concepts by changing one or more
of its current attributes, or by adding attributes,
and assessing the desirability of these concepts
if they were to be developed into products.

Gap Analysis
is a statistical technique with immense power under
certain circumstances. Its maps of the market are
used to determine how various products are
perceived by how they are positioned on the
market map.

Determinant Gap Map

Determinant gap maps are speedy and
cost-efficient but have the weakness of being driven
by only managerial judgment. Customer perceptions
may indeed be quite different. Plus, brand
perceptions might be more difficult for managers to
judge correctly.

Perceptual Gap Maps Based on Attribute

Ratings (AR)
Unlike the determinant gap map method, attribute
ratings (AR) perceptual gap mapping asks
market participants (buyers and users of the
product) to tell what attributes they believe
products have

Perceptual Gap Maps Based On Overall

Similarities (OS)
The problem was that users sometimes make
purchase decisions using attributes they cannot