fusion point research Marketing Research Reports

Marketing to New Product Development in Manufacturing

Understanding Their Role

New product development (NPD) is vital to the survival of manufacturing companies. The success of this process ties directly to an organization’s profitability, and managers are placing increasing importance on this function.1 2 As product lifecycles shorten, manufacturers are pressured to increase the speed and flexibility of their NPD processes.3 This is difficult, though, because developing new products is complex and highly collaborative. It is also expensive, and accounts for a significant portion of products’ cost.4 Success rates vary by industry, but are generally low with an average of around 60% across all manufacturing sectors.5

 

Most companies have established formal NPD processes. Developing new products is a cross-functional effort, requiring input from marketing, finance, production, engineering, sales and many other areas. It is often contentious, with high stakes for the future of the organization.6 NPD processes are heavily customized by company, but generally include stages such as7:

 

  • Idea generation and collection
  • Business assessment of the feasibility and viability of an idea
  • Allocation of investment dollars and resources
  • Engineering, prototyping and product testing
  • Launch process

 

Not all ideas reach the launch stage, of course, because unsuccessful concepts are filtered out at each step. Common activities included in these stages are8:

 

Collecting customer requirements

 

  • Nurturing a diverse array of sources for new ideas, both internally and outside of the company
  • Formal screening processes to decide which ideas proceed and which are eliminated
  • Analysis of market potential and competitive offerings
  • Test marketing to verify the business plan and marketing approach
  • Post-launch analysis to refine the product and add or remove features

“We've made the tough moves that we needed to do to shorten our time to market and get more…accurate with the products we choose to develop. But we have to continue to improve and dial in and keep our edge sharp in product development.”

- Matt Levatich, CEO of Harley-Davidson9

1 Markham, Stephen K., and Hyunjung Lee. “Product Development and Management Association’s 2012 Comparative Performance Assessment Study Product Development and Management Association’s 2012 Comparative Performance Assessment Study.” Journal of Product Innovation Management 30, no. 3 (2013): 408 – 429. EBSCOhost(87106736).

2 Salgado, Eduardo G., Valerio A. P. Salomon, and Carlos H. P. Mello. “Analytic Hierarchy Prioritisation of New Product Development Activities for Electronics Manufacturing.” International Journal of Production Research 50, no. 17 (2012): 4860 – 4866. EBSCOhost(79241975).

3 Kandemir, Destan, and Nuran Acur. “Examining Proactive Strategic Decision-Making Flexibility in New Product Development.” Journal of Product Innovation Management 29, no. 4 (2012): 608 – 622. EBSCOhost(76372988).

4 Suss, Samuel, and Vince Thomson. “Optimal Design Processes under Uncertainty and Reciprocal Dependency.” Journal of Engineering Design 23, no. 10 (2012): 829 – 851. EBSCOhost(84423670).

5 Markham, Stephen K., and Hyunjung Lee. “Product Development and Management Association’s….”

6 Bakliwal, V. K. Production and Operations Management. 1st. ed. MARK PUBLISHERS, C-390, Ist Floor, Amrapali Circle, Vaishali Nagar, Jaipur-302021, Ph.: 9413678649, E-mail: markpublishers@ymail.com: MARK PUBLISHERS, 2011.

7 MAGSALAY, LESLIE O. “Making the Product Development Process Work.” Industrial Management 54, no. 2 (2012): 21 – 26. EBSCOhost(93981918).

8 Millson, Murray R. “An Empirical Exploration of the New Product Process Proficiency-New Product Success Relationship.” International Journal of Business & Information 7, no. 1 (2012): 1 – 29. EBSCOhost(91653685).

9 Maidenberg, Micah. “What's next for Harley-Davidson.” Crain’s Chicago Business. September 2015. Accessed 11/29/15, available at: www.chicagobusiness.com/article/20150923/NEWS05/15...

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New product development (NPD) determines the future of a manufacturing company. Success in this function is essential, so manufacturers use formal processes to capture as many ideas as possible and fund the ones with the highest potential.
fusion point research Marketing Research Reports
New product development (NPD) determines the future of a manufacturing company. Success in this function is essential, so manufacturers use formal processes to capture as many ideas as possible and fund the ones with the highest potential.
  • Idea generation and collection
  • Business assessment of the feasibility and viability of an idea
  • Allocation of investment dollars and resources
  • Engineering, prototyping and product testing
  • Launch process
  • Nurturing a diverse array of sources for new ideas, both internally and outside of the company
  • Formal screening processes to decide which ideas proceed and which are eliminated
  • Analysis of market potential and competitive offerings
  • Test marketing to verify the business plan and marketing approach
  • Post-launch analysis to refine the product and add or remove features