This Is A Crazy Way To Screen New Product Ideas But It Works

the secret to NPD assessmentTo improve the speed and success rate for your New Product Development (NPD) and innovation activities, you need to:

  1. Start with a good idea (customer need)
  2. Successfully develop the solution
  3. Successfully implement the solution

Since there are no guarantees as to which ideas are the “good ones,” the challenge is to evaluate the various ideas and determine which ones we should resource.

You should create an Idea Generation Checklist to help with this assessment.

The secret isn’t filling out an idea generation checklist – it’s step #2: Write an ad

The checklist has four key areas:

1. Description of the Idea

Briefly describe the suggested idea and its benefits.

2. Write an Advertisement

Turn your product innovation into an ad to powerfully share your visionThis is a unique section and the secret to success. As soon as you have an idea, turn it into an ad. Every new idea should start with an ad or a picture.

An ad is the language of marketing. It literally paints a picture. You don’t have anything to talk about until you put your ideas into an ad.

In the act of writing the ad, you force yourself to start developing the idea. What is the main benefit of the product? You can’t write a headline without answering that question. What about name? Package? Main selling points?

This ad isn’t meant to be polished or a test of anyone’s creative or artistic ability. It can be a hand sketch, or a cut & paste from something, it doesn’t matter.

3. Assessment of our Technical and Commercialization Capabilities

This section is a checklist of items. The objective is to estimate of our “Probability of Success” both technical and commercialization, as well as how much effort it will require.

Here’s a way to create an overall evaluation for initial screening.

Commercial                        High       Medium      Low

Probability of Success

Amount of Effort

Cost to Implement

Technical                             High       Medium     Low

Probability of Success

Amount of Effort

Cost to Develop

4. Assessment of Financial Viability

At this early point, the analysis is simplistic: what’s the current market pricing for competitive products. Next determine the margin level need by your customers. Layer in your margin requirements and customer loads to quickly back into a cost target. If it passes the sniff test, there is still a green light at this initial stage.

Turn your innovation concept into an ad to powerfully share your vision

the secret to NPD assessment and, ultimately, commercialization successA picture is worth 1000 words. Nowhere is that more true than when you are trying to powerfully communicate a new product concept.

It articulates the vision of the idea clearly for everyone at the screening stage and sets the stage for a more compelling commercialization.

Good Selling!

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Are You Pricing with Your Customer’s Profitability in Mind?

Are You Pricing with Your Customer’s Profitability in Mind?How do you determine your pricing?  It’s probably a rigorous process, but is it science or art?

Do you start with your profitability and go from there? Or do you start with the market price and let your profitability fall wherever it may?

Neither approach alone will help you win in the marketplace. Because neither approach puts your customer‘s profitability into the picture.

Use a pricing strategy that considers your customer’s profitability

Use a pricing strategy that considers your customer’s profitabilityDelivering a market price to your customer will certainly be geared toward improving your top line. Here the logic is that your customer will be looking closely at a few high volume, highly competitively priced products to evaluate your overall pricing proposal.

If you price those product “footballs” correctly, everyone seems to wins. You get the business and they get the pricing they need to be competitive in the marketplace.

But that strategy embodies the whole point of pricing – that your customer is competitive in the market. If they are making the money they need to be successful, you will stand out.

But are you making the money you need to stay in business?

Take a P&L approach to pricing

Take a P&L approach to pricing

It’s no surprise that there’s no one sure way to approach pricing. It really is part science and part art.

But do you approach the science part with a fact-based strategy? To do that, you need to be able to answer a few simple questions:

  • What is the product’s market price?
  • What is the customer’s margin % expectations
  • What can we make?

As one senior leader recently commented to us about pricing: “If you manage pricing from only your profitability – you’re going to be dead.”

Which is why pricing is art as much as science.

Inside of a company, pricing is really a continuum

How do you determine your pricing?  It’s probably a rigorous process, but is it science or art?The sales team is, understandably, all about making the sale. They want a price that will help them achieve that goal.

On the other hand, the product marketing team is looking to get credit for the innovation they are bringing to the marketplace. They want to get paid a premium.

Straddling both sides of the fence is channel marketing (also called trade or customer marketing depending on the company). Channel marketing sees both sides of the fence, is grounded in reality, and keeps perspective throughout the process.

Having a group like channel marketing manage your pricing is the secret sauce. They have perspective, collect all the facts, and keep the customer’s profitability balanced with your own profitability.

For other Channel Instincts posts on pricing, see What Does “Your Price Is Too High” Really Mean?, Is Pricing Making You Go Bananas? and Are You Pricing for Volume or Profit?

Good Selling!

 

Are You Using This Simple Product Commercialization Checklist?

GeekThere’s been a lot of attention lately on innovation, agile development, NPD and product road mapping.  All are critical to developing new products but all fail dramatically in fully understanding the product commercialization process.

Miss out on successfully launching your product and not only will you miss your targets, but you’ll struggle to be credible with future product launches with your field sales team and customers.

With that in mind, here’s a comprehensive checklist to make sure you are considering the many facets of the commercialization process.                         

Market Analysis

Purpose

Why are we looking at this product / service?

What is in it for us?

What is in it for the Channel?

What is in it for the End User?

Objectives

What do we hope to do?

What is the timing to carry out the goal(s)?

Strategy

How do we envision accomplishing this objective?

What are the short and long-term strategies?

What is the timeline for each strategy?

How will the product be positioned?

Impact on other products (cannibalization)?

What plants and markets?

checklistOnGlass

Market Factors

What factors will help this product?

What factors prohibit us from meeting our goals?

What are the crucial market factors for this product?

Product

Requirements

What market research do we have to support product?

Define the channel and end-user(s) priorities

Define the market size and total opportunity for us

Feature/Benefits              

Define strengths and weaknesses of proposed product

Positioning

How will product be positioned (high/medium/low-end)?

Who are the key targets for placement?

Who are the pull through targets?

What is our pricing strategies by channel?

Packaging

What is the product called?

How will it be packaged?

Production Plan              

Clearly define production capabilities

Establish ordering procedures

Benchmarking  

Have we benchmarked other competitors in the industry?

Have we benchmarked other manufacturers outside the industry?

Measures of Success

How will we measure progress?

What will be considered a success?

Timeline

Key dates for all product elements?

Develop an implementation roll out strategy 60/90/120 day

Sales Plan                                                                                                                                           

checklistSales Forecast

What are the sales plan by Region/Nationally (in units and dollars)?

What are the seasonality/current trends?

Other Measures                 

Clear and tangible outcomes?

What is the total brand budget to support new product?

Selling Proposition

Sales                                       

What is the value proposition at each level?                       

Channel Customer                                                                                          

End User

Brand Support

Brand Plan

Define the communication plan for end-user/ customers/field sales?

Ensure product included in other programs

Social Media

Link our social media efforts

Website updates

You Tube, Facebook, Blog, Twitter, Pinterest

Literature

Define literature requirements

Develop technical facts to support new product

Samples

Produce product samples as required

Selling Tools

Determine tools required to support business proposition

Define product displays requirements

Develop plan-o-grams for retail customers

Photography

Will product availability delay photography (and literature)?

Packaging

Determine artwork

Timeline

Coordination of brand support programs

Define schedule and key dates

Field Implementation

new-bright-ideaImplementation Plan

Coordination of channel, product marketing, and brand efforts

Define processes and tools required for implementation

Determine channel programs (target accounts/promotions)

Develop time line for field sales communication

Provide advanced communication (90 days) to Sales

Training

Establish internal and external product training schedule

(Field Sales/Customer Service/Channel Customers)

Training Vehicle

Develop training modules

Scorecard

Clear Outcomes                

Follow-up review of business strategy after 90 days/6 months

Develop bail out strategy if not performing

What else would you add to this checklist?