Case Study 8 Case Study 8 New Product Development (NPD) Tony Gauvin, 1006
Dec 21, 2015
Case Study 8Case Study 8
New Product Development (NPD)Tony Gauvin, 1006
Company 8Company 8 Financial Services firm
Consumer retail banking 200 banks in 20 States 30% market share
Goal – New (High-tech) Product Development Improve image as a technologically advanced in
institution Online store providing consulting for customers
that wanted to start their own businesses Theme
“Marketing is a process for creating and delivering goods, services, and ideas to customers “
Company BackgroundCompany Background
NPD into the online environment failed Focused on e-commerce and CRM Failed to thoroughly understand BI
syndicated research issues Concern over technology-image decline Entrepreneurial customer base
product to start own business bank would leverage intra and extranet
technologies
OverviewOverview
Marketing department reports gradually declining customers satisfaction compare to major competitors Company’s technology image Overall customer satisfaction Willingness to recommend
Award winning intranet and extranet technology
Goal- increase in key indicators in relation to competitors
Goal and strategiesGoal and strategies Create a new, high-tech retail banking
product Process >> new product development Data
Syndicated research study Employee interviews
Marketing, IS and Advertising company Idea generation Idea screening
Result Electronics store infrastructure Market-driven (need) Technology driven (been there –done that)
New Product Development New Product Development (NPD)(NPD)
Six types of new products (review) New-to-the-world products New product lines Additions to existing product lines Improvements and revisions of
existing products Repositioning(s) or restaging(s) Cost reductions
Managing the New Product Managing the New Product ProcessProcess
Idea generationIdea screening
Concept development and testingMarket strategy development
Business analysisProduct development
Market testingCommercialization
New Product Failure RateNew Product Failure Rate
98-99%
80%
98-99%
80%
Depending on the studyDepending on the study
NPD MethodNPD Method
Organizational improvisation (Moorman 2001) Simultaneous planning and
implementation Requires
High levels of internal knowledge Real time communications among product
team members Outside-looking-in information source
NPD methodNPD method
Technology Map (Capou and Glazer, 1987) Conduct technology resources
inventory Address resource gaps Determine “what to sell” Evaluation of new Product
The productThe product Online Stores
Maintained and handled by Company 8 $1000/month
Promotions Free hosting for 90 days
$150 savings In branch merchandising Direct sales
Result – Sales far below expectations Regroup (focus groups) and reintroduce Results 75 stores in 2 years (expected 300)
Withdrew product
General Reasons for New General Reasons for New Product FailureProduct Failure
CEO ego Market size overestimated Poor design Incorrect positioning Incorrect advertising Overpriced High development costs Competitor reaction
Why Did It Fail?Why Did It Fail?
Further into NPD before simultaneously implement?
Step 3 in the organizational improvisational plan outside looking in information source
Issues range of technological sophistication and product
support services out-of-core competency
Surprise Key indicators all improved
StakeholdersStakeholders
Customers Serving current
Shareholders Negative impact
E-Biz ComponentsE-Biz Components
eCommerce Online store front
Business Intelligence Surveys (Advertising & employees) Did not survey customer till after deployment
Customer Relationship Management Goal of the project
Supply Chain Management N/A Enterprise Resource Planning N/A
Value Bubble AnalysisValue Bubble Analysis
Not initially included in promotion and communications Assumed that off-line and on-lien
customers behaved the same Technology savvy customers ignored
the traditional marketing since it was ALL place-bound in the physical banks
Used ATMS and online banking Value Bubble analysis is based on
what should have been done
AttractAttract
Did not do much Should have
Off-line and online traffic building Press releases SEO Reciprocal links
Technologies Site design ASP CSS JavaScript JSP
EngageEngage
Did implement Password for eSupport Community section Helpful hints
Technologies Java calculators HTML forms Did not use DOM
RetainRetain
Intended to provide Updates and enhancements Send e-mails Redo “helpful hints”
Technologies Account and password “caching” Should have
Cookies (greetings) Database
Learn Learn
Good implementation Pop-up surveys for customer
satisfaction Customer registration Profiling
Technology ASP JSP Database Clicksteam??
RelatingRelating
Customizable navigation based on usage
36 hour turn around on tech support Technologies
ASP PHP CSS JavaScript
Success or FailureSuccess or Failure
FAILURE with this product SUCCESS with the objectives Problems
Bad BI Not customer concentric Product did not match customer wants and
expectations Moved away from core-competency Organizational improvisation for small “fleet-
of-foot” technology companies not BANKS Future success likely if they have “learned
their lesson”
SummarySummary
Good example of a dot.com failure More learning is available by analyzing
failure than success Questions??