NPD Glossary

A-F             G-L                 M-R            S-Z

Click on any term to learn more about the definition and links to related information.

A

Accommodating (Conflict Management Behavior)

Characterized by low assertiveness and high cooperativeness, accommodating involves foregoing one’s own concerns in order to satisfy the concerns of the other team members.

Affinity Diagram

Also called an affinity chart, the affinity diagram is a convergent innovation tool used to group together like ideas within new product development or problem-solving in project management processes.

Alpha Test

Pre-production product testing to find and eliminate the most obvious design defects or deficiencies, usually in a laboratory setting or in some part of the developing firm’s regular operations, although in some cases it may be done in controlled settings with lead customers. See also beta test and gamma test.

Analyzer  (Miles & Snow Strategy Type)

A firm that follows an imitative innovation strategy, where the goal is to get to market with an equivalent or slightly better product very quickly once someone else opens up the market, rather than to be first to market with new products or technologies. Sometimes called an imitator or a fast follower.

Autonomous Team

A completely self-sufficient project team with very little, if any, link to the funding organization. Frequently used as an organizational model to bring a radical innovation to the marketplace. Sometimes called a “tiger” team.

Avoiding (Conflict Management Behavior)

Characterized by low assertiveness and low cooperativeness, avoiding involves stalling on an issue or ignoring it. The individual does not satisfy her own concerns or those concerns of other team members.

B

Benefit

A product attribute expressed in terms of what the user gets from the product rather than its physical characteristics or features. Benefits are often paired with specific features, but they need not be.

Beta Test

An external test of pre-production products. The purpose is to test the product for all functions in a breadth of field situations to find those system faults that are more likely to show in actual use than in the firm’s more controlled in-house tests before sale to the general market.

Bottom-Up Budgeting

A budgeting methodology that focuses first on expenses (the bottom part of a financial statement) and other outflows of monies, then evalauate what income is needed to break even and/or make a profit.  In contrast to the top-down budgeting technique.

Brainstorming

A group method of creative problem-solving frequently used in product concept generation. There are many modifications in format, each variation with its own name. The basis of all of these methods uses a group of people to creatively generate a list of ideas related to a particular topic. As many ideas as possible are listed before any critical evaluation is performed.

Break-Even Analysis

Break-even analysis is a technique used in financial analysis to measure the point at which the profits from a new product balance the investment cost.  Any revenue received beyond the break-even point yields cash above and beyond the initial development expense.

Breakthrough

Highly significant or dramatic invention or improvement in performance, achieved through consistent, focused, and synergistic efforts.

Budget

A plan for the future expressed quantitatively (usually in amounts of money) that covers a specific period of time (normally one year).

Business Model

A business model is the strategic and operational plan entailing how a business will operate to make a profit.

Business Model Innovation

Discovery of a fundamentally different business model within an existing business or industry.  Sometimes called “strategic innovation.”

C

Capability

Often defined as resources in the context of capacity planning. Capabilities are the activities and functions performed by or acted upon by the organization’s resources. Also known as “competencies”.

Capability Strategy

Evaluating and analyzing the skill sets and effective resource capacity of an organization to manage new product development projects effectively. Resource planning for capacity is an expected outcome of Product Portfolio Management.

Certification (NPDP Certification)

A process for formally acknowledging that someone has mastered a body of knowledge on a subject. In new product development, the PDMA has created and manages a certification process to become a New Product Development Professional (NPDP).

Champion

A person who takes a passionate interest in seeing that a particular process or product in fully developed and marketed.

Co-Creation

A form of market or business strategy that emphasizes the generation and ongoing realization of mutual firm-customer value.  It views markets as forums for firms and active customers to share, combine and renew each other’s resources and capabilities to create value through new forms of interaction, service and learning mechanisms.  It differs from the traditional active firm – passive consumer market construct of the past.

Collaborating (Conflict Management Behavior)

Characterized by high assertiveness and high cooperativeness, collaborating involves attempting to find a solution to satisfy all team members’ concerns and fully satisfying both sides of an issue.  Learn more about collaborating as a conflict management behavior.

Competing (Conflict Management Behavior)

Characterized by high assertiveness and low cooperativeness, competing is a power-oriented approach to dealing with conflict. An individual will assert his or her position without considering opposing viewpoints.

You can learn more about conflict management behaviors at the Idea Incubator:  5 Types of Team Behavior or more about Competing in an Idea Incubator blog post series.

Commercialization

Typically the last stage in the development cycle of a new product.  The process of taking a new product from development to market. It generally includes production launch and ramp-up, marketing materials and program development, supply chain development, sales channel development, training development, training, and service and support development.haracterized by high assertiveness and low cooperativeness, competing is a power-oriented approach to dealing with conflict. An individual will assert his or her position without considering opposing viewpoints.

Competitive Intelligence

Methods and activities for transforming disaggregated public competitor information into relevant and strategic knowledge about competitors’ position, size, efforts and trends.  The term refers to the broad practice of collecting, analyzing, and communicating the best available information on competitive trends occurring outside one’s own company.

Compromising (Conflict Management Behavior)

Characterized by intermediate assertiveness and intermediate cooperativeness, compromising involves finding the middle ground and foregoing some of the individual’s concerns in order to satisfy some other concerns of the team.

Concept

A clearly written and possibly visual description of the new product idea that includes its primary features and consumer benefits, combined with a broad understanding of the technology needed.

Concept Generation

The processes by which new concepts, or product ideas, are generated.  Sometimes also called idea generation or ideation.

Concept Map

A concept map is a diagram showing the relationships among concepts. They are graphical tools for organizing and representing knowledge.

Concept Testing

The process by which a concept statement is presented to consumers for their reactions. These reactions can either be used to permit the developer to estimate the sales value of the concept or to make changes to the concept to enhance its potential sales value.

Conflict

A condition in which one team member perceives that another has frustrated, or is about to frustrate, a condition of his. Results due to miscommunication between people with regard to their needs, ideas, beliefs, goals, or values.

Conflict Management

Involves acquiring skills related to conflict resolution, self-awareness about conflict modes, communication skills, and establishing norms for managing conflict to increase productivity of the team.  Find detailed descriptions of the five types of team behaviors at the Idea Incubator blog.

Conjoint Analysis

A model of consumer behavior in which consumers are willing to sacrifice the degree of an attribute or benefit present in a product to increase the benefits of other attributes.

Contingency Plan

A plan to cope with events whose occurrence, timing and severity cannot be predicted.

Controlled Sale

A controlled sale is a type of market testing used by firms in which the distribution is controlled or restriced.  In some cases, the new product is distributed to outlets with little or no cost.  An alternative to the controlled sale is the pseudo-sale.

Convergent Thinking

A technique generally performed late in the initial phase of idea generation to help funnel the high volume of ideas created through divergent thinking into a small group or single idea on which more effort and analysis will be focused.

Core Capabilities

A set of differentiated skills, complementary assets, and business processes that provide the basis for a firm’s competitive capacities and sustainable advantage.  Also called the core competencies.

Cost Reduction Project

A type of new product project that does not introduce dramatic changes to the product, but can influence consumer behavior by implementing new pricing or other cost advantages.

Critical Chain Project Management

Critical Chain Project Management (CCPM) is a method of scheduling that utilizes the Theory of Constraints popularized by Eli Goldratt.  In CCPM, scheduling takes into account limited (critical) resources when creating the project schedule and includes explicit buffers of time to protect the project completion date.

Critical Path

The set of interrelated activities that must be completed for the project to be finished successfully can be mapped into a chart showing how long each task takes, and which tasks cannot be started before which other tasks are completed.  The critical path is the set of linkages through the chart that is the longest and determines how long a project will take.

Cross-Functional Team

A team consisting of representatives from the various functions involved in product development, usually including members from all key functions required to deliver a successful product, typically including marketing, engineering, manufacturing/operations, finance, purchasing, customer support, and quality.  The team is empowered by the departments to represent each function’s perspective in the development process.

Crowdsourcing

Crowdsourcing is a way of soliciting ideas, services, or other support from a group of people rather than traditional employees.  Open innovation is often implemented through crowdsourcing which is available through internet tools.

Customer

One who purchases or uses your firm’s products or services.

Customer-Centric Innovation

Customer-centric innovation revolves around customers and their needs.  The process starts with insights on customer needs with the goal of designing a new product or service that delivers on these needs in a way that is intuitive and accessible to customers.

Customers may be involved in various ways, for example, ideas generation, market research and at-home testing.

It is possible for a company to be customer-centric without surveying customers directly and explicitly as insights about needs may be obtained by simply observing customers in their natural environment.

Customer Need

Problems that a product, service, or program solves and the functions it performs.  See also Product Needs.

Customer Relationship Management (CRM) System

A widely-implemented strategy for managing a company’s interactions with customers, clients and sales prospects.  It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support.  The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service.  Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments.

Customer Site Visit

A qualitative market research technique for uncovering customer needs. The method involves going to a customer’s work site, watching as a person performs functions associated with the customer needs your firm wants to solve, and then debriefing that person about what they did, why they did those things, the problems encountered as they were trying to perform the function, and what worked well.

Cycle Time

The length of time for any operation to be completed from the start.  In the new product development sense, it is the length of time to develop a new product from an early initial idea for a new product to initial market sales.  Precise definitions of the start and end point vary from one company to another, and may vary from one project to another within the company.  Generally considered the time from idea selection to commercial launch.

D

Decision Tree

Method of representing alternative sequential decisions and the possible outcomes from these decisions.

Defender (Miles & Snow Strategy)

A firm that stakes out a product turf and protects it by whatever means, not necessarily through developing new products.

Deliverable

A deliverable is the result or output of a project or a requirement that must be met for a new product development (NPD) project to advance to the next stage of work in a structured NPD process.

Delphi Process

A technique that uses iterative rounds of consensus development across a group of experts to arrive at a forecast of the most probable outcome for some future state.

Derivative Product

A derivative product is a new product based upon changes to an existing product.  The changes may be simple in that the product features are adjusted, refined, or improved without impacting the basic core technology or architecture of the product.

Diffusion Model

The process of how new products get adopted as an interaction between users and potential users. The model is widely used in forecasting, especially product forecasting and technology forecasting.

Digital Strategy

A plan that utilizes digital technology to achieve goals, such as improved operational efficiency, enhanced customer engagement, or advanced product development and innovation. 

Digital Transformation

Incorporating digital technology solutions into a business that reshapes the organization and shifts its focus to external customer relationships rather than internal elements. 

Discontinuous Innovation

Previously unknown products that establish new consumption patterns and behavior changes.  Examples include microwave ovens and the cellular phones.  Learn more and earn one professional development hour (PDH) at Simple PDH.

Disruptive Innovation

A disruptive innovation is an innovation that disrupts an existing market.  The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically by lowering price or designing for a different set of consumers.  Learn more about disruptive innovaiton at Simple PDH.

Divergent Thinking

Technique performed early in the initial phase of idea generation that expands thinking processes to generate, record and recall a high volume of new or interesting ideas.

Dyad Team

A team of two people, normally from R&D and Marketing functions, that conducts customer visits to learn about potential consumer and product needs.

E

Elapsed Time

The time on a calendar that it takes to complete a project activity, from start to finish.  For example, the elapsed time for a normal work day may be 10 hours, including 8 hours of real time, plus commuting and lunch time.

See related definition of real (project) time, where in comparison to elapsed time, an actual work day is 8 hours.

Emotional Design

Typically used as a portion of the product design specification system to understand the importance of emotions and how individuals process information about the product.  Click on the term to learn more.

Enhancement (or Enhanced Product)

A product enhancement is a new product that offers features and benefits to customers that were not previously available.  See also derivative.

Enterprise Resource Planning (ERP)

Systems used to collect, organize, report, and distribute organizational data and transform that data into critical information and knowledge.  ERP Systems are used to help organize data, especially supply and demand data and sales forecasts, for New Product Development (NPD).

Ethnographic Studies

Ethnographic studies are a descriptive, qualitative market research methodology for observing the customer in relation to his or her environment. Researchers spend time in the field studying customers and their environment to acquire a deep understanding of the lifestyles or cultures as a basis for better understanding their needs and problems.

Expected Commercial Value (ECV)

A variation of decision-tree analysis which discounts future revenues by the probability of commercial and technical success, combined with the cost of commercialization and development for a new product project.

F

Fast Follower

A firm or organization that is adept at improving existing technologies through incremental innovation in both product and process technologies. Often offers a product or pricing advantage over the first-to-market competitor.

Feature(s)

The solution to a consumer need or problem. Features provide benefits to consumers.  The handle (feature) allows a suitcase or briefcase to be carried easily (benefit).  Usually any one of several different features will be chosen to meet a customer need.  For example, a carrying case with shoulder straps is another feature that allows a suitcase or briefcase to be carried easily.

Financial Statement

A formal record of the finances of a company or other entity.

First to Market

The first product to create a new product category or a substantial subdivision of a category.

Fixed Costs

Periodic expenses of a firm which remain unchanged regardless of the level of output or sales.

Float (or Slack) Time

In project management, float or slack is the amount of time that a task in a project network can be delayed without causing a delay to either subsequent tasks and activities or the final project completion date.

Focus Group

A qualitative market researchtechnique where 8 to 12 market participants are gathered in one room for a discussion under the leadership of a trained moderator.  The discussion focuses on a consumer problem, product, or potential solution to a problem. The results of these discussions cannot normally be projected to the general market.

Forecast

A prediction, over some defined time, of the success or failure of implementing a business plan’s decisions derived from an existing strategy.

Functional Team

A functional team, sometimes known as a functional work group or simply work group, is a type of team that works primarily on low risk, low uncertainty new product development projects with little interaction across functions or departments.

 Full Team

A full team, also known as a heavyweight team, is an innovation team that works cross-functionally to develop a complex new product with a high degree of technical uncertainty for new or emerging markets.

Full Sale

Full sale is a market testing method in which the marketing is complete and is issued in final form with the new product as in a final commercialization launch.  There are no restrictions on the product, the marketing materials, or distriubtion of the new product.

Fuzzy Front End

The messy “getting started” period of product development, when the product concept is still very fuzzy. Preceding the more formal product development process, it generally consists of three tasks: strategic planning, concept generation, and, especially, pre-technical evaluation. These activities are often chaotic, unpredictable, and unstructured. In comparison, the subsequent new product development process is typically structured, predictable, and formal, with prescribed sets of activities, questions to be answered, and decisions to be made.

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