Jeff is a Product Manager at a large company. He has profit-and-loss responsibility for a well-known consumer brand. Unfortunately, the last new product launch in the brand family was a disaster. The company is sitting on $3M inventory and nearly $1M in raw materials orders. Customers aren’t buying the product and Jeff is not sleeping well at night.
Though Jeff and his company are fictional, we have all seen new product launches fail. Some fail big and cost alot of money, effort, and reputation. Others are smaller failures, just not quite meeting sales volume goals or encountering unexpected delays to market profitability. These new product failures continue to plague organizations despite policies and procedure designed to minimize risk. What can be done? How can well-intentioned innovation managers, like Jeff, increase the odds of success?
First, new product development (NPD) programs are successful only when there is a direct focus on the customer. Innovation research demonstrates that the two key measures of successful NPD are (1) implementing a well-designed and consistent strategy, and (2) involving the customer in product design and development. I will refer you to other posts and papers for more information on innovation strategy.
Customer involvement in new product design does not mean he or she sits next to you with a hammer to help build the new product. Instead, customer involvement means understanding their needs, their challenges, and their likes and dislikes.
Any successful NPD program starts with talking to customers to understand their pain points with current product solutions. NPD teams follow the customer through his journey from identifying a problem, screening potential solutions, selecting a single product, and then purchasing and trusting that product. In Design Thinking, we call this the customer journey map.
Along the journey, we’ll ask the customer how she feels and what aspects of the existing product solutions are overly complex or missing altogether. Her feedback drives us tounderstand gaps in performance features and attributes.
However, identifying the product challenges is not enough. We need to constantly test and retest our assumptions with the target customers to ensure we are designing, developing, and delivering a solution to their problem that is easy-to use and provides the expected value.
This is where a product prototype comes into play. A prototype is defined by Dictionary.com as “the original or model on which something is based or formed.” In NPD prototypes are used throughout the process to test our understanding of customer needs. When translated into a functioning product, successful understanding of customer needs means brand recognition and profitability for the company, and delight and value delivery for the customer.
When to Use a Product Prototype
Protypes should be used throughout the NPD process. For our purposes, we are going to model a traditional staged-and-gated innovation flow as follows.
- Stage One – Opportunity Identification
- Stage Two – Concept Generation
- Stage Three – Concept Selection
- Stage Four – Technical Development
- Stage Five – Product Commercialization
- Post-Launch Review
During Stage One, when the firm is using design thinking tools like the customer journey map and innovation techniques like interviews and observation, the NPD team will deploy “idea prototypes”. The idea prototype is a less formal model of something to come and is centered on gathering ideas of problems that customers and potential customer have. We can test idea prototypes with secondary market research by investigating if the problem really exists or if others have tried to solve the problem in the same way in the past.
For example, Jeff’s innovation team can test the idea for their newproduct by interviewing people at a retail store. They can observe whether shoppers select and purchase their company’s products. They can also observe when consumers choose another brand. And, they can formulate ideas regarding these product choices and build on the ideas by interacting with these potential customers.
In Stage Two, the idea prototypes are documented in brainstorming sessions. The NPD project team and relevant stakeholders generate ideas about the customers’ problems. Both divergent and convergent thinking are deployed so that a broad perspective is obtained. Certain concepts will naturally fall into categories or themes that the NPD team can test with the potential customers.
Taking on a fresh project, Jeff’s team, for example, compared their products with competition and generated a list of over 100 ideas to improve the existing product. They then categorized these ideas into several theme areas.
- Keep up with competitor features
- New features
- Simplify product usage
- New product
In Stage Three, these concepts are tested as a simple prototype with customers. The simple prototype of the new product concept may be a paper prototype sketching the new features or attributes of the product. Or it may be a rough mock-up of a new product that is non-functional. What’s important for the concept testing is to present the simple prototype to a lot of potential customers to gain feedback.
This prototype is inexpensive to generate but is the most crucial validation of customer needs in the process. Successful innovations must meet customer needs and the simple prototype can readily demonstrate how the company plans to solve the consumer’s problem.
For Jeff’s team, the first concept they presented to potential customers was met with quiet and polite comments. So, they went back to the drawing board. The next concept went beyond just trying to match the features of competitive products and imagined a product that would operate form a customer’s cell phone. This prototype was met with customer excitement – they asked how much it would cost and when it would be available. Jeff knew then that the team was on the right track.
During a traditional NPD process, Stage Four is when the team finalizes the design and moves the product to formal production. This is the time when the prototype and manufacturing blueprints are completed, and the manufacturing process is pilot-tested.
At the formal development process stage of innovation, the NPD team demonstrates a viable business case for the new product. Jeff’s team, for instance has gathered the cost of raw materials for the new feature as well as schedule and budget estimates to design the new smart phone app. They build fully-functional product prototypes along with the app and again, test this final prototype with customers.
At the same time, operations is pilot-testing the best manufacturing methods. Different raw materials might be used for the new product features and purchasing helps the project team identify the least expensive options. Pilot tests confirm the sequence of manufacturing steps and in many cases involve testing the robustness of the distribution channels.
Pilots are different than prototypes in that they are process-oriented rather than product-oriented. Yet, the success of a new product depends on both the features and functionality of the tangible product and of the manufacturability and service offerings supporting maintenance of the product. The organization can continue to pilot test different aspects of the smart phone app even after the new product is launched.
Another important pilot test for the new product occurs as it is commercialized. Marketing messages are crucial to selling new products and must concisely explain to consumers how the new product solves their problems and is better than the competition. Different marketing campaigns can be pilot-tested with different segments of the target market.
For instance, Jeff’s team chooses to use A/B Testing in Stage Five. They have set up two different websites featuring the new product and drive half of their users to each. One of the landing pages has a prototype advertisement highlighting the product features and the other landing page has a prototype advertisement evoking an emotional reaction. Jeff’s team measures responses to the pilot messages to validate the product marketing campaign.
Success in NPD!
Jeff’s new product is received very well by the target market. Product orders are coming in at a faster pace than expected and there have been positive comments in the press about the brand. Early sales figures show a profit after three months of sales – an awesome result compared to the prior new product launch!
As Jeff learned, success in NPD relies on an intimate customer focus. Since it’s impossible to ask a customer what they want in the future, we use prototypes to test our assumptions of customer needs. Successful innovators start with an idea prototype to understandthe actual challenges faced by potential customers. Then the NPD team tests concept prototypes with consumers to validate the problem and suggested solutions. During these stages of innovation, an NPD team will recycle ideas and continuously gather feedback from customers to verify the correct problem and concept solutions.
Formal prototyping and process pilot tests occur only after a viable business case is created. Some customer problems cannot yet be solved with known technology and in other cases, the cost of a product will not deliver a valued solution to the customer. Formal prototypes are fully functional and mimic the final design characteristics of the product.
At the same time, marketing and operations pilot-test the marketing messages and the manufacturing processes. Pilot tests often reveal underlying issues of emotional appeal or scale of manufacturing. It is far more cost effective to address marketing and manufacturing challenges earlier rather than after the producthas launched.
Prototyping and pilot-testing are extremely valuable methods of gaining customer feedback. The interaction of the NPD team with the target market builds brand recognition and trust with the organization. Internally, the innovation team benefits from a customer focus and direct messaging.
If you want to improve your new product success rates and learn more about prototyping or pilot-testing, you won’t want to miss out on joining our Innovation Master Mind group. Membership includes full access to the NPDP self-study course (a $395 value). Let me know how I can help you on your innovation journey. Contact me at firstname.lastname@example.org or +1‑281-280-8717.
©2018 Global NP Solutions, LLC
Your Strategic Innovation Partn