New Products Management

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					New Products Management

            Chapter 15
  Special Issues in Development
                                                            Figure 15-2

    The Drive for Speed: Accelerating
         Product Development

Accelerating Product Development through
 Managing the Organization:
•   Use projectization: project matrix and venture teams.
•   Use small groups to thwart bureaucracy.
•   Empower, motivate, and protect the team.
•   Destroy turf and territory.
•   Make sure supporting departments are ready.
•   Clear the tracks in shared departments.
                                                               Figure 15-2
                                                               (cont’d.)




             The Drive for Speed
Other Techniques for Accelerating Product
 Development:
• Intensify resource commitments (integrate channel
  members; parallel or concurrent engineering)
• Design for speed (CAD design, common components,
  design for easy testing, design in qualities that lead to fast
  trial)
• Prepare for rapid manufacturing.
• Prepare for rapid marketing.
                                                     Figure 15-3




Functional Interface Management
Condition of
Marketing-R&D       Percent of   Project Outcome:
Interface           Projects   Success     Failure

Harmony              40.8%      52%        13%
Mild Disharmony      20.5%      32%        23%
Severe Disharmony    38.7%      11%        68%
               Why the Friction?
• Stereotypes of marketing, technical,
  manufacturing personnel
• Physical separation
   –   Co-location
   –   Digital co-location
• Inept top management
       Managing the Interfaces
• Top managers eliminate the interface problems.
• Interface management takes time, not skills.
• Get rid of participants who are a continual
  problem.
        Global Product Innovation
•   Export: make one product; no special arrangements made.
•   Global Strategy: make one product; same market conditions
    worldwide.
•   International Strategy: develop versions of the product to meet the
    needs of foreign markets.
•   Multinational Strategy: Projects directed by managers in each viable
    foreign market; apply technology available from home market
    (Nestle).
•   "Local Drive:" Assign basic responsibility to foreign market; some
    local R&D and manufacturing; mostly local marketing.
•   Mix of the above: firm develops and applies strategies appropriate to
    each foreign market.
          Must Weigh Several Risks
 • May not understand foreign preferences.
 • May not understand foreign culture.
 • Underestimate foreign regulations.
 • Lack of international managerial
   experience.
 • Foreign host may change the laws, devalue
   currency, expropriate foreign property or
   undergo a political revolution.
Berkowitz Chapter 14                           5
  Deciding which Markets to Enter
 •   A company must define its international objectives and policies.
 •   Few or many countries.
      – Few when
          • Market entry and market control costs are high.
          • Product and communication adaptation costs are high.
          • Population and income size and growth are high in the initial
            countries chosen.
          • Dominant foreign firms can establish high barriers to entry.
 •   Type of Countries
      – Country attractiveness is influenced by the product, geographical
        factors, income and population, political climate, and other
        industry specific factors.


Berkowitz Chapter 14                                                        6
          Deciding How to Enter the
                   Market
 •   Indirect Export - work through independent intermediaries to export
     products
 •   Direct Export - a company handles its own exports, through a domestic
     department, overseas sales branch, traveling reps, or foreign-based
     distributors/agents.
 •   Licensing - sell a foreign company the rights to your manufacturing
     process
 •   Joint Ventures - join with local investors to share ownership and
     control
 •   Direct Investment - direct ownership of foreign-based operations




Berkowitz Chapter 14                                                     7
   The internationalization Process
 • Johanson - Swedish firms move through
   four stages.
      –   No regular export activities
      –   Export via independent reps
      –   Establishment of one or more sales subsidiaries
      –   Establishment of production facilities abroad.



Berkowitz Chapter 14                                        8
          Deciding on the Marketing
                  Program
 • Product
    – straight extension
    – product adaptation
    – product invention
 • Promotion
    – communication (promotion) adaptation
    – dual (product and promotion) adaptation


Berkowitz Chapter 14                            9
          Deciding on the Marketing
                  Program
 • Price
    – uniform price
    – market-based price
    – cost-based price
 • Place (Distribution Channels)
    – links include seller’s international marketing
      headquarters
    – channels between nations
    – channels within nations

Berkowitz Chapter 14                                   10
          Deciding on the Marketing
                Organization
 • Export Department
    – firm ships goods to other countries.
 • International Division
    – firm becomes involved in several international markets
      and ventures
 • Global Organization
    – firm no longer thinks of itself as a national marketer.
      All management and staff are involved in worldwide
      pursuits.


Berkowitz Chapter 14                                        11
            Organizational Strategies
 • Bartlett and Ghosal suggest that there are three
   organizational strategies.
 • Global Strategy
    – Treats the world as a single market.
 • Multinational Strategy
    – Treats the world as a portfolio of national opportunities.
 • Glocal Strategy
    – Standardizes certain core elements and localizes other
      elements.

Berkowitz Chapter 14                                          12

				
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