JOURNAL
Chapter 10
The Full Screen
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Concept Selection Difficulties
- Among biggest product management challenges.
- Possible that every NPD project has passed all the hurdles so far.
- The firm needs a good concept selection procedure to reduce NPD concepts.
- Otherwise management must:
- Guess (and select the wrong project)
- Approve too many projects (and underfund everything).
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The Full Screen
- A necessary evil: very powerful with long-lasting effects.
- Forces pre-technical evaluation, and summarizes what must be done:
- Resources
- Processes
- Methods range from simple checklists to complex mathematical models.
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Screening Alternatives
- Judgment/Managerial Opinion
- Concept Test followed by Sales Forecast
- if only issue is whether consumers will like it
- Scoring Models
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A Simple Scoring Model
Answer: Go boating.
Figure 10.2
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Values
Factors:
4 Points
3 Points
2 Points
1 Point
Degree of Fun
Number of People
Affordability
Capability
Much
Over 5
Easily
Very
Some
4 to 5
Probably
Good
Little
2 to 3
Maybe
Some
None
Under 2
No
Little
Student's Scores:
Skiing
Boating
Hiking
Fun
4
3
4
People
4
4
2
Affordability
2
4
4
Capability
1
4
3
Totals
11
15
13
Source of Scoring Factor Models
Figure 10.3
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A Scoring Model for Full Screen
Note: this model only shows a few sample screening factors.
Factor Score (1-5) x Weight = Weighted Score
Technical Accomplishment:
Technical task difficulty
Research skills required
Rate of technological change
Design superiority assurance
Manufacturing equipment…
Commercial Accomplishment:
Market volatility
Probable market share
Sales force requirements
Competition to be faced
Degree of unmet need...
Figure 10.4
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The Scorers
- Scoring Team:
Major Functions (marketing, technical, operations, finance)
New Products Managers
Staff Specialists (IT, distribution, procurement, PR, HR)
- Scoring Problems:
May be always optimistic/pessimistic
May be "moody" (alternately optimistic and pessimistic)
May always score neutral
May be less reliable or accurate
May be easily swayed by the group
May be erratic
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Industrial Research Institute Scoring Model
Technical success factors:
- Proprietary Position
- Competencies/Skills
- Technical Complexity
- Access to and Effective Use of External Technology
- Manufacturing Capability
Commercial success factors:
- Customer/Market Need
- Market/Brand Recognition
- Channels to Market
- Customer Strength
- Raw Materials/Components Supply
- Safety, Health and Environmental Risks
Source: John Davis, Alan Fusfield, Eric Scriven, and Gary Tritle, “Determining a Project’s Probability of Success,” Research-Technology Management, May-June 2001, pp. 51-57.
Figure 10.5
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Alternatives to the Full Screen
- Profile Sheet
- Empirical Model
- Expert Systems
- Analytic Hierarchy Process
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A Profile Sheet
Figure 10.6
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NPD Project Screening Model
- Idea: analyze NPD variables on past successes and failures to predict a new early-stage product chances of success, and to identify weaknesses to be addressed before NPD project approval.
- Current practices split the screening model: must-meet and should-meet criteria.
- Must-meet are “yes-no” questions even one “no” screens the project out.
- Should-meet are scales, and high scores offset (compensate for) any low scores.
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Criteria Based on the NPD Studies
- Must-Meet Criteria (rated yes/no):
- Strategic alignment
- Existence of market need
- Likelihood of technical feasibility
- Product advantage
- Environmental health and safety policies
- Return versus risk
- Show stoppers (“killer” variables)
Figure 10.7
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Criteria Based on the NPD Studies
(continued)
- Should-Meet Criteria (rated on scales):
- Strategic (alignment and importance)
- Product advantage (unique benefits, meets customer needs, provides value for money)
- Market attractiveness (size, growth rate)
- Synergies (marketing, distribution, technical, manufacturing expertise)
- Technical feasibility (complexity, uncertainty)
- Risk vs. return (NPV, IRR, ROI, payback)
Figure 10.7 (cont’d.)
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Analytic Hierarchy Process (AHP)
- AHP gathers expert judgment and uses it to make optimal decisions.
- In AHP screening models, the respondent identifies the key criteria in the screening decision, assessing which are the most important. Each choice (project) is rated on each criterion.
- The AHP software calculates scores for each project and ranks them in terms of preferability.
- AHP analytical models such as Expert Choice are commercially available.
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Diagram for Analytic Hierarchy Process (AHP)
Figure 10.8
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Products 1, 2, 3, and 4
Goal: Select Best NPD Project
Market Fit
Tech. Fit
Dollar Risk
Uncertainty
Product Line
Channel
Logistics
Timing
Price
Sales Force
Design
Materials
Supply
Mfg. Tech.
Mfg. Timing
Differential Advantage
Payoffs
Losses
Unmitigated
Mitigated
Product Line
Abbreviated Output from AHP
Figure 10.9
Recommendation: P1 is preferred as it has the highest overall weight as calculated by AHP.
How did this happen? P1 was ranked by the managers as among the highest on all of the most important criteria.
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Ranking of Alternatives:
Project Overall Weight
P1 0.381 xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
P2 0.275 xxxxxxxxxxxxxxxxxxxxxxxxxxxx
P3 0.175 xxxxxxxxxxxxxxxxxx
P4 0.170 xxxxxxxxxxxxxxxxx
Values
Factors:
4 Points
3 Points
2 Points
1 Point
Degree of Fun
Number of People
Affordability
Capability
Much
Over 5
Easily
Very
Some
4 to 5
Probably
Good
Little
2 to 3
Maybe
Some
None
Under 2
No
Little
Student's Scores:
Skiing
Boating
Hiking
Fun
4
3
4
People
4
4
2
Affordability
2
4
4
Capability
1
4
3
Totals
11
15
13
Products 1, 2, 3, and 4
Goal: Select Best NPD Project
Market FitTech. FitDollar RiskUncertainty
Product Line
Channel
Logistics
Timing
Price
Sales Force
Design
Materials
Supply
Mfg. Tech.
Mfg. Timing
Differential
Advantage
Payoffs
Losses
Unmitigated
Mitigated
Product Line
Ranking of Alternatives:
Project
Overall Weight
P1
0.381
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
P2
0.275
xxxxxxxxxxxxxxxxxxxxxxxxxxxx
P3
0.175
xxxxxxxxxxxxxxxxxx
P4
0.170
xxxxxxxxxxxxxxxxx