New product development (NPD) is the art and science of converting nascent ideas into commercial products and services that deliver value to the consumer as well as the producer. We seek new technologies, new markets, and new applications through product development. In particular, we must ensure alignment between product benefits and features.
Typically, we identify product features by understanding customer needs, competition, and pricing strategies. (Read more about pricing strategies in The Innovation ANSWER Book available at Amazon.) For example, a phone used to be relatively inexpensive and included features, like a handset and keypad, that allowed us to conduct conversations with people in different locations. As technology has advanced, we rarely use phones for conversations and instead use them as cameras, appointment books, and file storage. In turn, the price of a smartphone is quite high compared to the landline device your parents had in the kitchen.
The big question we address in NPD is how to design a product that meets customer needs. To answer that, we use a set of market research tools. (Read about market research tools in The Innovation PROCESS Book available at Amazon.)
Interviews and Focus Groups
High touch communication gives us the most valuable and in-depth information to match product features with consumer needs. Interviews are an excellent market research tool to gain deep customer insights about problems they face, lifestyle, and satisfaction with competitive products. Interviews are simple – all you have to do is ask questions and record a person’s responses. However, to gather actionable data, the NPD team should use consistent questions across all interviews, investigate responses in different demographic and geographical arenas, and use a mix of closed and open questions. Interviews are especially useful in the front-end of innovation to gather opinions and feelings of potential customers (called qualitative market research).
Focus groups are another traditional market research tool. Whereas interviews gather individual responses, focus groups concentrate on collaborative and collective discussions. Focus groups are used throughout the NPD process. In the front-end of innovation, we use focus groups to test concepts and ideas, while in the back-end of innovation, we use focus groups to evaluate working models and prototypes.
Traditionally, interviews and focus groups are conducted in-person. We gather more information from people when we capture their body language in addition to spoken words. Further, in testing prototypes we can make a direct observation of their interaction with the product. However, we can simplify interviews and focus groups by using video conferencing, chat, and text messages. Note that a formal product launch should never occur without real customers giving face-to-face feedback on a product.
QFD
QFD stands for quality functional deployment. It is a sophisticated market research tool that matches customer needs and wants against a company’s engineering capabilities and market competitors. My friend, Carlos Rodriguez, has provided in-depth examples of applying QFD product development in his book Product Design and Innovation: Analytics for Decision Making.
A full deployment of QFD (pun intended) requires a practiced facilitator, loads of data, and in-depth statistical analysis. Most teams do not have these skill sets in-house and, moreover, most projects do not require a full-blown QFD exercise.
Instead, we use a simplified QFD to match customer needs and engineering results – or more simply – align “what” and “how”. Using a whiteboard and sticky notes (real or virtual), the cross-functional NPD team places features desired by customers (what) as row headings and engineering requirements (how) as column headings. An “X” in the intersecting cell indicates a relationship and a question mark indicates an unknown. (Quick tip: you can use different colored stickies for these items for even quicker visual reference.) In some cases, measurable targets are known, and that information should be recorded on the simplified QFD matrix. However, targets must be essential to the success of the product in the market and not just nice-to-have.
For example, in the QFD example above, an acceleration of 0 to 60 mph in 6 seconds is an actual feature target for the sports car. Buyers will not accept the car if it cannot accelerate from a stop to 60 mph in 6 seconds and this target is backed by consumer interview data.
Likewise, a 7-speed manual transmission is an engineering requirement that can deliver the customer “want” of “fun to drive”. We put a question mark in the cell for this engineering requirement, though as we need to do further research to validate the target and production capability. after all, not many Americans can actually drive a stick shift anymore.
Simple Market Research Tools
Market research is crucial to the success of new product development. We use various customer-centric tools to ensure that we are delivering the desired features and benefits to the market. In the front-end of innovation, we can use interviews to gather qualitative information about our customers and the problems they face. Thoughts, opinions, and feelings drive the complexity of the product design.
Throughout the NPD process, we use focus groups to collect data and information from groups of customers. In particular, focus groups are useful when testing prototypes of individual features or whole products. Interaction among members of such a group lead to additional product and feature insights.
Finally, quality function deployment (QFD) is an extremely thorough market research methodology. Most NPD teams instead are successful with a simplified QFD analysis that matches customer-desired features with engineering requirements. We simply match the “whats” with the “hows”, then identify further information necessary to design and develop the product. The simplified QFD serves as a risk assessment tool as well as defining the benefits for customers.
Please feel free to contact me at [email protected] if you’d like to discuss how to apply simplified market research tools in your new product development process.
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