New product development - getting the product idea

New products need investment

Some of the best product ideas are not inspired by focus groups.

When it comes to new product development, engineers who turned to marketing hold a strong card, particularly in the technology and engineering industries. Today much of what is discussed about marketing is only marketing communications, but without new products and another overlooked area - intellectual property such as patents and trademarks - the scope of the marketing role is incomplete.

Typically the driving force behind new products is a product manager who champions the product from concept to launch and then manages it within a portfolio of products. The role of the product manager is unusual in that the people who carry out the work at key stages are not direct reports so enthusiasm, persuasion and good communication skills are necessary  characteristics of a successful product manager.

Often the concept for a new product is prompted by the need to replace ageing products, advances in technology, new manufacturing techniques and changing needs of customers.  The 'game-changing' products that Apple have created are a different matter, some creating new markets as the iPod and iTunes, or the iPhone turning the mobile phone market on its head. More often new products are more modestly pitched to give customers a better way of doing what they need the product to do.  Whether the product manager provides the vision for the new product, or someone else encapsulates the idea in a flash of inspiration, it is likely to be more viable than the output of a committee, or worse still a focus group of users.

Viewers of the Dragon's Den on television will be familiar with the procession of hopeful inventors and would be entrepreneurs who troop their new product ideas in front of potential investors. Amongst the crackpot, ill thought out ideas, every now and then a genuine and investable product pops up. Large companies I  have worked for get a constant stream of wild ideas proposed to them. One example comes to mind of an Australian would be inventor who claimed to have developed a high frequency electronic ballast the size of a matchbox for the control of fluorescent lamps . This of course when that product category was still new. A demonstration was set up in the board room with the product development committee at one end of the room and the inventor and his matchbox which we were not allowed to examine at the other. Or the American who in a first class piece of personal PR managed to be first to step off the inaugural Concorde flight from America to Heathrow. I  recently saw his interview re-run on the Discovery channel. He announced he was here to sign this great deal, in fact it was to try to sell us polarised diffusers for office lighting all backed up by weird science. Then there was the non-exec board member who had taken a tungsten halogen floodlight, mounted this on a length of conduit and stuck this into the centre of a car wheel as a base. I was summoned to the chairman's office to examine this great idea!

So getting a viable product concept is just the start. Getting backing for its development is just the first hurdle on the road to a product launch.

New product development

New products are at the heart of any integrated marketing strategy. Even the best executed marketing campaign will not compensate for poor products or products that the market does not want.

So the first stage of any new product programme is research. Initially there may be dozens, perhaps even hundreds of ideas to sift and evaluate, but new products will most likely arise from one of three key drivers:-
     Technology
     Market Need
     Price

Whilst market input is important, it’s not likely to result in any real progress in understanding what to develop. As one commentator remarked, ‘you don’t know, what you don’t know’.

The lack of imagination conditioned by the existing supply chain through to the end user, will deliver a verdict which can be summarised as ‘more of the same, plus a few ‘bells and whistles’ that the competitors offer on their product - and all delivered at a lower price’.

Technology, not surprisingly is a critical driver, either applied to the product itself or to the process of manufacture, or a combination of both. But basing new product development on a new technology platform can be a high-risk strategy unless relevant to the target audience. New technology for its own sake will not succeed unless it also fulfils a market need that the customers are willingly to pay for. But failure to recognise the value of new technology or adopt too late can be equally disastrous. Sometimes the technology is a good idea in search of a genuine user application. The key factor is an ability to bridge the gap between the possibilities afforded by adoption of the technology and the implementation and acceptance by the market.

Finally price can be the driver for a successful new product, but to achieve this will generally require having a lower cost-manufacturing base than any of your competitors. This may be achieved through entry barriers to the market such as high level of investment in plant, or patent controls that are beyond the reach of your competitors and will usually also need to be accompanied by high volumes and a dominant market share.

Should marketers have a good knowledge of the technology they use?

Marketing for many b-2-b enterprises is not just about presenting increasingly sophisticated products, but using communications channels that also are reliant on an underlying technology.

The Industrial Revolution in England not only changed the way things were made. It  had a profound impact on the way people lived and worked and in turn the fortunes of the nation itself. Visit industrial heritage sites or museums to see equipment of the era and you can watch and see how the machines work. You can witness the parts turning, see cotton being spun, shuttles weaving cloth or pumps raising water. Today the technology is largely hidden buried in silicon chips and embedded computer code. Many marketers promote products without an understanding of how they work, using Internet based systems and programs they are equally unqualified to master. They become reliant on the R&D guys on the one hand and the IT people on the other.

When I started my career in marketing, working for a leading manufacturer of electrical goods, the situation was rather different. The marketing department set the agenda. We wrote the new product development specifications, we worked closely with the design engineers, witnessed laboratory prototype testing, progressed tooling development and introduction on to the factory production lines, packaging, logistics and stocking. We wrote the operation manuals, set the prices and briefed graphic designers and advertising agencies. By living through the whole design to production cycle we had intimate knowledge of all aspects of the product and trained our sales team in how the product should be presented. The marketing team were engineers, most had served apprenticeships in all parts of the company before being appointed to a marketing role. We knew how everything worked including all the outsourced graphic design processes that produced the marketing collateral. In short we had control.

Today for many companies the marketing environment has more focus on communications than new product development. They are increasingly reliant on others to engineer the systems they rely on, they don't have experience of working in a development or manufacturing operation. The products ship in from China. In short they are not engineers. They have no apparent interest or curiosity as to how products work, the effort required to make things happen and little interest in what is involved - only how cheap and how quickly can they get things done. Not surprisingly without understanding or control of the processes things go wrong.

Innovate or die

New product development is the lifeblood of a business. Failure to innovate will result in stagnation and eventual decline. 


The rate of new product introduction in most markets is now relentless, so just to keep pace calls for a regular flow of new products. Few will be genuinely innovative, most will be evolutionary rather than revolutionary but the evolution will move forward the market’s expectations. 


So where to start? Having reviewed the focus for the new product and market positioning through preliminary research, it is time to start putting together a brief for the development team and a specification for the new product. Perhaps the most important consideration is the target market. What is the role of the product, who will buy it and use it and what does it compete with or replace? Developing a product without a clear understanding of users' needs  will raise marketing problems throughout the process. So it is vital to get this right from the start. 


Today many companies find themselves competing in the global market with all sorts of regional variations due to custom, culture and legislation working against their attempts to develop a single, universal product. One approach could be to develop a core product or technology, which can be adapted or customised to suit different market needs. Such decisions have to be taken before any other work starts and if they are wrong, the product may be loaded with unnecessary costs for any one market, or too bland for acceptance anywhere. The attempt to incorporate everything for everywhere is not only expensive to implement, but results in an unsuitable product for any country. Another outcome can be the ‘lowest common denominator’ solution where the product brief meets the minimum needs of its principle markets, but ends up being totally uninspiring and unexciting to everyone. 


Finally by designing with only one country’s needs in mind, may for want of some simple-to-do considerations at the briefing stage, enable far greater sales to be achieved in many more countries.