New Product Development (npd) Process

New Product Development (NPD) Process

The NPD process is often disorderly, but it needs order to capture the best ideas and turn them into opportunities. Input into the process comes from a variety of sources and needs to be encouraged and recorded. A remark from a customer or a salesman's observation or the melting of a candy bar in a microwave research lab (which prompted the development of the microwave oven) may lead to a chain of events that result in a new product or service.

Consider this: Last March at a meeting of the DeVry-Houston Horizons Club, Jim McGinvale, the ever-present (he'll greet you at the door any day of the week) owner of Gallery Furniture, made a speech about how his business stays successful (McGinvale, 2010). He related a story about a customer coming in several years ago looking for a Tempur-Pedic mattress. Jim replied that he didn't carry that brand. Over the next six months, more and more customers came in and asked Jim the same question. He finally asked his merchandisers and himself, "Why aren't we carrying Tempur-Pedic?" Today, Gallery is purported to be the largest retailer of Tempur-Pedic mattresses in the Houston area.

The NPD process is not a one-size-fits-all proposition. For example, innovation in the FMCG industry relies primarily on packaging and promotion, while innovation in industrial goods and pharmaceuticals rests primarily on research and development. Consumer electronics lie somewhere in the middle, waiting for either a new need to be filled (e.g. SONY Walkman or iPod providing personal music entertainment as replacements for the boom box using more effective technologies) or a new want to be encouraged (iPhone, Blackberry, etc.). Problems are bound to arise when a firm tries to engage in the NPD process at both ends of the spectrum simultaneously. Industry context is an important facet of NPD. The NPD and management skills required for success depend heavily on the types of personnel and management systems in play for the industry. When Ford hired Alan Mullaly as its CEO in 2006, they went outside the automobile industry for a leader. Mullaly had a successful career at Boeing managing a succession of new products. Through Mullally's style of asking questions (such as, "Why do we need three different designs for the Ford Focus?"), he established the concept at Ford of building world cars. A world car has the same basic design no matter where it is sold. That concept shortened the NPD time and integrated Ford's worldwide knowledge base.