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Giacomo Balli
Innovation consultant specializing in mobile strategy
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New Product Development (Feb 2003)

New Product Development: This is the business process for developing new hardware, software and service products for the company.  It includes all activities from developing the idea or concept for the product, and the launch of the product into production and into the market place. New product introduction is used by some organizations synonymously with new product development. Product launch begins once a product has been developed and a decision is made to proceed with production and marketing.  It consists of all of the steps to plan and prepare for production of the product including ramp-up to full volume production or general availability; the steps to plan, promote, market and sell the product, and the steps to prepare for servicing and support of the product. More specific steps include:
  1. Understand customer needs and manage requirements
  2. Plan and manage product development
  3. Use product development teams
  4. Integrate process design
  5. Manage costs from the start
  6. Involve suppliers and subcontractors early
  7. Develop robust designs
  8. Integrate CAE, CAS, CAM and case tools
  9. Simulate product performance and manufacturing processes electronically
  10. Create an efficient development approach
  11. Improve the design process continually
Strategies: Time to market:  An orientation to get the product to the market fastest. Low product cost:  Focused on developing the lowest cost or highest value product Low development cost:  Focuses on minimizing development cost of developing products within a constrained budget.  Compatible with time to market but involves tradeoffs with product performance. Product Performance and technology innovation:  Focuses on having the highest level of product performance, the highest level of functionability or functions and features the latest technology or the highest level of product innovation. Quality, Reliability, Robustness:  Focuses on assuring high levels of product quality, reliability and robustness (where the cost to correct a problem outweighs everything such as physical health, safety, etc. Service responsiveness and flexibility:  Focuses on providing a high level of service being very responsive to customer requirements as part of development, and maintaining flexibility to respond to new customers, new markets and new opportunities. New Product Development Vanilla coke and Diet Vanilla coke: In the fall of 2002 the coca cola company introduced its newest product called Vanilla Coke.  They called it “the greatest innovation since diet coke in 1983”.  It was speculated that the launch of the new product was not for a financial need, but to remain in the public eye, presenting consumers with a new and exciting product.  This was to give them an edge over Pepsi.  Pepsi had been gaining popularity in recent years because its recipe is sweeter, and coke has a more bitter taste.  Blind taste tests had been giving Pepsi the advantage over the market.  So Coca Cola Company added vanilla to their product. Unfortunately, word of the new product made it to the public and Coca Cola had to launch Vanilla Coke sooner than it had planned.  The reason for this was to beat any competition Pepsi might pose.  They decided to focus their marketing efforts on 18-29 year olds.  “Chill out lounge trucks” were placed in public areas and were equipped with a lounge area and an unlimited supply of Vanilla Coke. To stir up even more talk and excitement for the new product Coke created a website, called the Vanilla Coke Lounge, but did not claim as their own.  Instead they created a fake story describing how coke had stolen the recipe and was trying to cover it up.  They also tried to create a nickname for the new product, urging people to call it V Coke. The success of Vanilla Coke was so great that people began to call, write and email the company asking when a diet version of the drink would be available.  So the following year Diet Vanilla Coke was out in stores. The creation of the product was simple.  A special team focused on combining the ideas and assets from both the diet coke and vanilla coke.  They required 24 hour turnaround on decisions and feedback to increase the speed of the project.  The name was chosen in the first week.  Then graphics were created and finally packaging and marketing. However, when it came to bringing the product to other countries, Coca Cola had other obstacles.  The consumption of sodas in Europe had been decreasing over the past years due to a rise in health and diet awareness.  Soda consumption is also lower in European countries because soda is considered more of a summertime drink.  For these reasons, Coca Cola Company decided to send its first European shipment to Stockholm and other Scandinavian countries.  The only problem that the company faced was the unfamiliarity of vanilla as a flavor for soda. Vanilla Coke became a popular product in the United States, but regular Coke and Pepsi are still the most popular sodas.  Since it was just released in Stockholm its hasn't quite reached the rest of Europe yet, but from what I have heard it hasn't made much of an impression on the Swedish.

Published: Fri, 09 Nov 2012 15:02:44 +0000