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New Product Development – 3 Critical Variables

In today’s WSJ, there is an article about new product development, written by a team of McKinsey and MIT professionals. The authors analyzed new product development activity in 28 companies in North America and Europe, and report these 3 things that those with the best product development records do differently than less successful companies.

Tellingly, out of the myriad of variables that might drive successful new product development, marketing research was one of the 3 they cited:

1. Keep the project requirements focused, consistent, and well-communicated.

2. Nurture a product development culture: have the right team, focused on the project, with responsibility and autonomy to get products developed.

3. Talk to the Customer! The top performers periodically tested and validated customer preferences during the process –including early phase research to determine customer needs.

This article cites the bottom line impact of following these reasonable practices. Particularly in such a dynamic, difficult economic environment, the temptation can be strong to take shortcuts in that “talk to the customer” aspect of product development. This article supports the value of customer input throughout the product development process, and demonstrates the downside of failure to do so effectively. It is crucial to have the right research done. Our clients benefit from our expertise throughout the new product development continuum. We work closely with our clients to understand the critical business issues around a particular new product development project, and because our work is custom designed, we leverage that research investment productively. The key is to determine at which phases of your process consumer input is most impactful, and how to get the knowledge as efficiently as possible.

Here are some of the phases where we work with clients – consider them as you look at your new product development process.

• Need gap identification – where is there “white space” in this category, needs that are important and not being met by current offerings? How extensive is this problem, how big is the market for this?

• Insight development and evaluation – what is the underlying problem or conflict that consumers experience, and that your product solves?

• Develop the product conceptually – use consumer input to design viable alternatives (product features, branding, pricing, etc.) prior to significant product development costs.

• Test prototypes and alternatives – we do this at many stages of development – testing names, packaging, pricing, formulations – all aspects of the product.

• Positioning – what are the most relevant benefits or RTB’s to communicate, and to whom?

• Putting it all together – testing product prototypes prior to introduction, advertising development and communication, in-market reads, in-store evaluation, and more.

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