Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e

10. Product Management
    and New−Product
    Development

Text © The McGraw−Hill

Companies, 2002

Product Management and New-Product Development 297

In addition, rather than leaving new-product development to someone in engi-

neering, R&D, or sales who happens to be interested in taking the initiative,

successful companies put someone in charge. It may be a person, department, or

team. But it’s not a casual thing. It’s a major responsibility of the job.

A new-product development department or team (committee) from different

departments may help ensure that new ideas are carefully evaluated and profitable

ones quickly brought to market. It’s important to choose the right people for the

job. Overly conservative managers may kill too many, or even all, new ideas. Or

committees may create bureaucratic delays leading to late introduction and giving

competitors a head start. A delay of even a few months can make the difference

between a product’s success or failure.

Many new-product ideas come from scientific discoveries and new technologies.

That is why firms often assign specialists to study the technological environment in

search of new ways to meet customers’ needs. Many firms have their own R&D

group that works on developing new products and new-product ideas. Even service

firms have technical specialists who help in development work. For example, a bank

thinking about offering customers a new set of investment alternatives must be cer-

tain that it can deliver on its promises. We’ve touched on this earlier, but the

relationship between marketing and R&D warrants special emphasis.

The R&D effort is usually handled by scientists, engineers, and other specialists

who have technical training and skills. Their work can make an important contri-

bution to a firm’s competitive advantage—especially if it competes in high-tech

markets. However, technical creativity by itself is not enough. The R&D effort must

be guided by the type of market-oriented new-product development process we’ve

been discussing.

From the idea generation stage to the commercialization stage, the R&D spe-

cialists, the operations people, and the marketing people must work together to

evaluate the feasibility of new ideas. They may meet in person, or communicate

To p

management

support

Cross-

functional

team

Clear

understanding

of customer

needs

Complete

marketing

plan

Effective

transition to

regular

operations

A basis for

superior

customer

value

New

product

success

Product

champion with

authority

Timely

development

cycle

Cost

management

(costs add

value)

Effective

design

Organized New-Product

Development Process

Exhibit 10-6 New-Product Development Success Factors

Put someone in charge

Market needs guide

R&D effort