Challenges in the New Product Development

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Table of Contents

Challenges experienced by new product managers
How to deal with the above challenges
Advantages of testing at different stages in NPD process
Disadvantages of testing at various stages
Factors that influence the extent of testing and information required
Problems that occur in new product teams
Reference List

Challenges experienced by new product managers

Businesses in different economic sectors have over the past few decades experienced an increment in the number of challenges they are facing within the business environment. One of the major challenges relates to increment in the intensity of competition (Lamb, 2012, p.40). To cope with these challenges, firms’ management teams are integrating different competitive strategies.

One of the major competitive tools that are being utilized entails incorporation of New Product Development (NPD) (Krishnan & Prabhu, 1999, p.1). According to Krishnan and Prabhu (1999, p. 1), the process entails a number of stages from idea generation to the launch of the new product (Huang, 2010, p. 387).

Rainey (2005, p.105) asserts that new product development is a vital strategy in firms’ survival. However, there are challenges that new product development managers experience. Some of these challenges are evaluated below.

Poor linkage across the various functional structures

According to Tidd and Bessant (2011, p.34), one of the major challenges that firms experience in their effort to develop new products and services is associated with the fact that they are not effectively designed or structured for this purpose.

However, Tidd and Bessant (2011, p.34) are of the opinion that most organizations are designed to serve a particular operational need. As a result, NPD is an infrequent and unusual requirement. Additionally, most organizations have adopted hierarchical organizational structures which are considered to be rigid with regard to communication.

In an effort to ensure success in the new product development process, most organizations are adopting team-based approach by integrating various functional teams into the new product development project with each of the teams headed by its own leader.

Ensuring cooperation amongst members of the various functional structures is very important in the success of the NPD process (Huang, 2010, p. 387). This arises from the fact that it results in creation of synergy in the NPD process with increases the probability of success.

Despite this, product development managers face a challenge emanating from existence of poor relationship amongst the functional structure team members. Poor relationship and cooperation amongst the team members may culminate in poor coordination of the project.

According to Rainey (2005, p.105), it is very important for the product development manager to ensure that the new product development process is aligned with the firm’s organizational structure and management system.

Inadequate marketing information

Collecting reliable marketing information is very important in the success of a new product development. This arises from the fact that the product developed should reflect the customers’ needs and wants. One of the ways through which new product managers collect market information is by conducting a market research.

In their effort to ensure successful development of a new product, new product managers may face a challenge emanating from inadequate marketing information. One of the causes of this problem entails relaying on conventional methods of market research such as focus groups (Ogawa & Piller, 2006, p. 6).

These methods of data collection do not reflect the needs of the customers. The success of a firm in its NPD process is dependent on the effectiveness with which it collects reliable market information. Failure to conduct an effective market research may result in failure of the NPD (Brooke &Mills, 2002, p. 6).

Finite resources

A substantial amount of resources are required to ensure successful development of a new product. These resources may either be financial or human in nature. Considering the changes in the business environment for example as a result of economic crisis, new product managers may experience a challenge due to limited resources.

Additionally, other financial commitments may result in delays in the allocation of finances necessary for completion of the project. Such delays may hinder the effectiveness with which the new product generates the projected revenue.

How to deal with the above challenges

If I were in the position of a new product manager, I would ensure that an effective linkage between the functional structures is established. One of the ways through which the product development manager can achieve this is by ensuring participation of the various functional teams in the formulation of policies, procedures and the practices to be adopted in the new product development process.

Additionally, the product development manager should provide clear guidelines and directions to be used in the organization’s NPD process. This will play a significant role in establishing a link amongst the various functional teams.

To ensure that the organization has sufficient marketing information, I would ensure that a comprehensive market survey of the potential customers is conducted. Additionally, I would ensure that the market survey is conducted regularly during the NPD process so as to ensure that the market trends are captured in the new product. This will ensure that the product being developed is consistent with the customers’ needs and wants.

To ensure that the NPD process is not hindered, I would ensure that sufficient human and financial capital is allocated to the new product development. Additionally, I would also ensure that realistic milestones with clear timelines are incorporated in the NPD process so as to minimize the risk emanating from market changes.

Advantages of testing at different stages in NPD process

A number of tests are conducted during the new product development process (Pride & Ferrell, 2012, p. 350). There are a number of advantages that an organization can accrue by conducting these tests. For example, through concept testing, an organization’s management team is able to evaluate and gauge the reaction and opinion of the target market regarding the new product.

Additionally, concept testing can also help the new product development team in generating valuable ideas from the customers which may contribute towards success in the development of the new product.

For example, in its effort to introduce a new soft drink, The Coca Cola Company may select a focus group from the market which will be used in testing the new product. The focus group may give The Coca Cola Company insight on the customers’ health requirement. As a result, the firm will be health conscious in developing the new soft drink.

Conducting tests is also advantageous in that it may safe an organization from incurring substantial financial losses which might emanate from failure of the new product upon being launched. On the other hand, test marketing is also important in that it gives the marketer substantial insight regarding various marketing issues prior to full introduction of the product in the market.

According to Beamish & Ashford, (2005, p.252), test marketing is advantageous in that it contributes towards effective decision making regarding the new product. Some of the decisions that new product manager are able to make regarding the new product relate to pricing points and the market positioning strategy to adopt thus minimizing potential for failure (Beamish & Ashford, 2005, p. 252).

Disadvantages of testing at various stages

Despite the above advantages, there are a number of disadvantages associated with testing a new product. Considering the fact that it is not possible to test the entire target market, most organizations have adopted the concept of focus testing which entails testing a small group of customers from the target market.

However, the focus group used may mislead marketers. This arises from the fact that the focus group used may not represent the total target market. The resultant effect is that the tests may not be effective.

According to Ryan (2012, para. 1), conducting tests during the various stages of the NPD process can be very expensive. For example, in testing a new household consumer product, the management team of Proctor and Gamble may decide to offer free samples in order to determine the customers’ reaction.

However, this can result in a significant financial strain for the organization. In some situations, an organization may be forced to pay individuals so that they can participate in a particular survey.

Conducting numerous tests may also result in exposure of the trade secrets to the competitors. The competitor may react to the firm’s effort to introduce a new product by undertaking research and development to counter the firm’s move (Ryan, 2012, para. 4).

Factors that influence the extent of testing and information required

The extent of testing conducted on a new product and the information required is dependent on a number of factors. Some of these factors relate to the nature of the product. For example, few tests are conducted on capital products compared to consumer products.

On the other hand, an organization may conduct numerous tests on consumer goods such as a soft drink compared to a vehicle. One of the ways through which an organization may attain this may entail integration of free samples.

Another factor that is considered when testing the product is customer safety. In their new product development, it is paramount to ensure that the customers’ safety is taken into account. A sufficient amount of information on safety should be collected to ensure that the customers’ safety is guaranteed.

Problems that occur in new product teams

According to Huang (2010, p. 387), new product development is very challenging. This is well illustrated by the numerous product failures experienced by different companies in an effort to introduce new products in the market. To ensure success of the NPD process, companies are incorporating cross-functional teams. Huang (2010, p.387) asserts that the team members are drawn from different departments.

As a result, the team members may have different backgrounds, experiences, competencies and interests which may result into emergence of conflicts amongst the team members. Such conflicts may negatively impact the new product development process due to lack of the intended team cohesion.

Lack of cohesion within the product teams results in poor product team efficiency. This may limit the probability with which the product team exploits the intended market opportunity.

To improve product team performance, there are a number of issues that product team managers should take into account. One of these issues relates to integrating effective team dynamics (Lamb, 2012, p.32). For example, product team managers should integrate effective conflict management strategies.

This arises from the fact that it is difficult to avoid conflicts in a team. However, effective management of such conflicts can ensure that the team members work harmoniously. The resultant effect is that the team is able to attain the predetermined goal.

Additionally, it is also important to consider the human factor when constituting the NPD team. One of the ways through which this can be attained is by ensuring the project team members are conversant with the goals of the new product development. According to Huang (2010, p. 388), it is also important organizations management team to ensure that the team responsible for the new product development is well trained.

In their NPD process, most organizations depend on their employees as the core source of the competitive edge. As a result, organizations’ management teams should be committed towards development of their human resource.

To improve team performance, it is paramount for project team leaders to ensure that there is effective cooperation within the team. One of the ways through which this can be attained is by ensuring that effective communication is integrated within the team. According to Huang (2010, p.388), communication plays a very important role in the performance of a team.

This arises from the fact that it contributes towards effectiveness and efficiency in the transmission of information amongst the team members. Effective communication within an organization can be attained by integrating a flat organizational structure.

Reference List

Beamish, K., & Ashford, R. (2005). CIM coursebook 05/06 marketing planning. New York: Routledge.

Brooke, M., & Mills, W. (2002). New product development: Successful innovation in the marketplace. New York: Routledge.

Huang, G. (2010). Proceedings of the 6^th CIRP sponsored international conference on digital enterprise technology. Berlin: Heidelberg.

Krishnan, R., & Prabhu, G. (1999). Creating successful new products: Challenges for Indian industry. New Delhi: Prentice Hall.

Lamb, C. (2012). Marketing. Toronto: Nelson Education.

Ogawa, S., & Piller, F. (2006). Reducing the risks of new product development. Massachusetts: MIT.

Pride, W., & Ferrell, O. (2012). Marketing. Mason, Ohio: South-Western Cengage Learning.

Rainey, D. (2005). Product innovation: Leading change through integrated product development. Cambridge: Cambridge University Press.

Ryan, R. (2012). Key issues in new product development. Web.

Tidd, J., & Bessant, J. (2011). Managing innovation: Integrating technological, market and organizational change. New York: John & Wiley.

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