Innovations in New Product Development & Marketing

Brad Golden, Global VP for Kepner-Tregoe’s (KT) Consumer Packaged Goods Practice, and Drew Marshall, KT’s Chief Innovation Officer spent this past week at Frost & Sullivan’s MindXchange™ conference for senior business leaders in San Diego, California. The Conference was titled, “Innovations in New Product Development & Marketing.”

 

This two and a half day event covered the intersection between new product development and marketing and how the two areas are not only interdependent but unlock tremendous value when effectively integrated. Our focus was on the back-end of innovation or, “what do you do once the light bulb goes on?” This plays to KT’s long-standing strength in assisting our clients in executing their strategies through integrated thinking and action.

 

In an early session, the way in which a product’s design elements are gathered and considered for inclusion focused on the value of “designing for gross margin.” Sheila Mello and Wayne Mackey, co-authors of Value Innovation Portfolio Management: Achieving Double-digit Growth Through Customer Value, presented a method for driving cost out of product development by using a value assessment driven by customer requirements. (For those familiar with past posts to this blog, this is the second time in as many conferences that the effective use of customer requirements has been a key element. The VOC – voice of the customer – rules.)

 

From KT’s perspective, the decision objectives for that kind of assessment are critical. A MUST objective, or perhaps at a minimum a high-weighted WANT objective should be: Design solutions to meet requirements for which a customer is willing to pay a higher price. With this objective in mind, most organizations can develop ‘test’ mechanisms that could demonstrate and ‘fly’ the cost drivers of new products or business models to be able to clearly say how much true value exists. The key is to listen to what customers want and consider the environment in which they have unmet needs – unless you can do both you may mislead yourself into building something for which there is little perceived, or real, value.

 

“A negative return on investment is not a case for a strategic investment.” – Subra Narayan, Director, Venture Capital and External Alliances, Eastman Kodak

 

Another area of keen interest for participants was the impact of sustainable product development. The Environmental Marketing Manager from HP’s IPG (Imaging & Printing Group), Maggie Davis, provided a rapid overview of how that group is tackling this approach to their markets. In this space the key objectives for deciding whether or not to purchase a product or service have tended to fall into the following four areas: personal protection (how does this impact me and my immediate circumstances?); cost (does it fit within my price constraints?); status (how will this broadcast my environmental awareness?); altruism (how much good will it do?). A crucial point: if you do not meet these objectives from a base of credible engagement, your products or marketing efforts will have a negative on your brand. This is no market space to be two-faced.

 

In any case the answer to the question, “what innovations should we pursue?” comes down to considering those innovations that are sustainable, authentic (to the brand and customer experience), and create value. All of these must be perceived and measured in the eyes of your customer. Take care in what you choose to do…