CHAPTER 12
New product development
SUSAN HART
Introduction
The need to create customer-relevant business
processes is a recurrent theme in marketing
evidenced in the underlying themes of pre-
vious chapters – particularly those dealing with
the nature of marketing, competitiveness and
strategies. Today’s successful firms learn and
re-learn how to deal with the dynamics of
consumers, competitors and technologies, all of
which require companies to review and recon-
stitute the products and services they offer to
the market. This, in turn, requires the develop-
ment of new products and services to replace
current ones, a notion inherent in the discus-
sion of Levitt’s (1960) ‘Marketing Myopia’. A
recent report into Best New Product Practice in
the UK showed that, across a broad range of
industry sectors, the average number of new
products launched in the previous 5 years was
22, accounting for an average 36 per cent of
sales and 37 per cent of profits (Tzokas, 2000).
The most recent PDMA Best Practice Survey
noted an average number of 38.5 new products
in the previous 5 years, contributing to 32.4 per
cent of sales and 30.6 per cent of profits (Griffin,
1997).
This chapter is concerned with what is
required to bring new products and services to
market, often encompassed by the framework
known as the new product development (NPD)
process.
Of the many factors associated with suc-
cessful NPD, processes and structures which
are customer-focused recur (Cooper, 1979;
Maidique and Zirger, 1984; Craig and Hart,
1992). A customer focus may be manifested in
NPD in numerous ways, spawning much
research into the nature of new product activ-
ities: their nature, their sequence and their
organization (Mahajan and Wind, 1992; Griffin,
1997). In this chapter, the activities, their
sequence and organization required to develop
new products are discussed in the light of an
extensive body of research into what distin-
guishes successful from unsuccessful new
products. The chapter starts with an overview
of the commonly used NPD process model
before going on to a general discussion of the
usefulness of models in the NPD context. It
then develops an integrating model of NPD
and, finally, issues identified in current research
regarding organizational structures for NPD
are considered.The process of developing new products
Considering some well-known successful inno-
vations of the past 20 years, one might be
tempted to think that they are all good ideas:
the Walkman, laser printers, Automatic Teller