Application: New Offers, Innovation, Revenue Sources, risk management

The Concept

Marketers need to create new products and new services to offer to their customers and must create the competence to commercialize or “monetize” (to use a dreadful jargon word) them. Unfortunately a large number of new products simply fail. One source estimates a failure rate of 40% across industrial and consumer markets, a staggering 95% failure of new consumer products in the United States; and that around 90% of all new European product introductions fail within the first two years (see “Managing new product development for strategic competitive advantage” by D. Jain in Iacobucci, D. (ed.), Kellogg on Marketing, 2001).

NPD (new product design) or NSD (new service design) is the managerial process intended to obviate this failure record and minimize lost investment. It is a method of turning ideas and insights into viable offers. One of the business world’s most extensively studied fields of work, it is essentially the mechanism by which companies harness creativity and innovation for commercial advantage. The thinking and activities involved in this have most often been represented by a process (represented in Figure N.1). Although, as with so many management concepts, the steps in this process ought not to be proscriptive; they are just a way to structure ...

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