Performance Assessment of the Lead User Idea-Generation Process for New Product Development

2002 ◽  
Vol 48 (8) ◽  
pp. 1042-1059 ◽  
Author(s):  
Gary L. Lilien ◽  
Pamela D. Morrison ◽  
Kathleen Searls ◽  
Mary Sonnack ◽  
Eric von Hippel
Keyword(s):  
New Product Development ◽  
Idea Generation ◽  
New Product ◽  
Major Product ◽  
Product Line ◽  
Direct Result ◽  
Target Market ◽  
Generation Process ◽  
The Past ◽  
Lead User

Traditional idea generation techniques based on customer input usually collect information on new product needs from a random or typical set of customers. The “lead user process” takes a different approach. It collects information about both needs and solutions from users at the leading edges of the target market, as well as from users in other markets that face similar problems in a more extreme form. This paper reports on a natural experiment conducted within the 3M Company on the effect of the lead user (LU) idea-generation process relative to more traditional methods. 3M is known for its innovation capabilities— and we find that the LU process appears to improve upon those capabilities. Annual sales of LU product ideas generated by the average LU project at 3M are conservatively projected to be $146 million after five years—more than eight times higher than forecast sales for the average contemporaneously conducted “traditional” project. Each funded LU project is projected to create a new major product line for a 3M division. As a direct result, divisions funding LU project ideas are projecting their highest rate of major product line generation in the past 50 years.

Introducing the new product line of regulated distribution transformer cooperation of Siemens AG and A. Eberle GmBH & CO. KG

2017 ◽  
Vol 2017 (1) ◽  
pp. 264-267
Author(s):  
Stefan Hoppert ◽  
László Kelemen ◽  
Zoltán Nádudvari ◽  
Gábor Vörös
Keyword(s):  
New Product ◽  
Product Line ◽  
Distribution Transformer

A Metric for Evaluating Design Commonality in Product Families

1998 ◽  
Vol 122 (4) ◽  
pp. 403-410 ◽  
Author(s):  
Sridhar Kota ◽  
Kannan Sethuraman ◽  
Raymond Miller
Keyword(s):  
Product Family ◽  
Objective Measure ◽  
Value Added ◽  
New Product ◽  
Product Line ◽  
Product Complexity ◽  
Product Families ◽  
Market Strategy ◽  
Customer Base ◽  
Market Needs

Many companies develop a market strategy built around a family of products. These companies regularly add new product variations to the family in order to meet changing market needs or to attract a broader customer base. Although the core functionality remains essentially unchanged across the products within a family, new functions, feature combinations and technologies are incorporated into each new product. If allowed to grow unchecked, these component variations, commonly referred to as “complexity”, can result in a loss of productivity or quality. The challenge lies in an effective management of product variations in the design studio and on the manufacturing floor. The key is to minimize non-value added variations across models within a product family without limiting customer choices. In this paper we discuss the factors that contribute to product complexity in general, and present an objective measure, called the Product Line Commonality Index, to capture the level of component commonality in a product family. Through our Walkman case study, we present a simple yet powerful method of benchmarking product families1. This method gauges the family’s ability to share parts effectively (modularity) and to reduce the total number of parts (multi-functionality). [S1050-0472(00)02704-5]

Red Bull (Abridged)

2017 ◽  
pp. 1-8
Author(s):  
Paul W. Farris ◽  
Ervin R. Shames ◽  
Richard R. Johnson ◽  
Jordan Mitchell
Keyword(s):  
United States ◽  
Word Of Mouth ◽  
Product Category ◽  
New Product ◽  
The United States ◽  
Product Line ◽  
Brand Building ◽  
History Of ◽  
Brand Product ◽  
Red Bull

This case (an abridged version of UVA-M-0663) describes the history of the Red Bull brand and how the company stimulated and harnessed word of mouth to build a new product category (functional energy drinks) and brand franchise. The case concludes by asking the reader to consider where Red Bull will take its brand, product line, and marketing next, in light of many competitive challenges in the United States. The case was written to foster discussion of nontraditional brand-building strategies and the growing globalization of brands and products targeted toward younger consumers.

Measuring Price Thresholds by Psychophysics and Latitudes of Acceptance

1971 ◽  
Vol 8 (4) ◽  
pp. 460-464 ◽  
Author(s):  
Kent B. Monroe
Keyword(s):  
Experimental Technique ◽  
New Product ◽  
Demand Estimation ◽  
Product Line ◽  
Experimental Results ◽  
Price Limit ◽  
Response Scales ◽  
Product Pricing ◽  
Price Thresholds

This article reports the adaptation of an experimental technique for establishing response scales for product classes. Experimental results further validate the price-limit hypothesis first confirmed in Europe. Implications for demand estimation, new product pricing, and product line pricing are discussed.

Microeconomic Theory of Spinoff Decisions

2013 ◽  
Vol 2 (4) ◽  
pp. 36-51
Author(s):  
T. V. S. Ramamohan Rao
Keyword(s):  
Bargaining Power ◽  
New Product ◽  
Product Line ◽  
Market Potential ◽  
Organizational Capabilities ◽  
Elasticity Of Substitution ◽  
Microeconomic Theory ◽  
Strategic Bargaining ◽  
High Elasticity ◽  
Coordination Requirements

The present study demonstrates that the product line choice of a firm depends on the elasticity of substitution between products (and the organizational and coordination requirements that it implies), the bargaining power of managers of different product divisions, and marketing prospects of each of the products. A new product idea, put forward by an employee, will be integrated if a combination of these features obtains. A spinoff will result if any one, or more, of these conditions is not satisfied. In general, it is shown that a new product, which has a high elasticity of substitution with the existing products, will experience a spinoff due to lack of organizational capabilities to integrate it while a product with a low elasticity will spinoff only due to the incumbent management’s perception of low market potential and/or the strategic bargaining power of the incumbent management with respect to the existing product line.

Call to Action

2011 ◽  
pp. 406-417
Author(s):  
William S. Lightfoot
Keyword(s):  
New Product ◽  
Current Situation ◽  
Technical Support ◽  
Product Line ◽  
Management Team ◽  
Product Management ◽  
Comprehensive Review ◽  
Call To Action

This case study is about a call to action for a product management team to rapidly improve the technical support for a new product line. The CEO has expressed serious concerns about the teams ability to perform. A comprehensive review of the current situation, and the development of a new support process is described.

Intertemporal Product Management with Strategic Consumers: The Value of Defective Product Returns

2021 ◽  
Author(s):  
Narendra Singh ◽  
Karthik Ramachandran ◽  
Ravi Subramanian
Keyword(s):  
New Product ◽  
Perceived Quality ◽  
Product Line ◽  
Problem Definition ◽  
Theoretic Model ◽  
Product Returns ◽  
Strategic Consumers ◽  
Defect Rate ◽  
The Future

Problem definition: An increased incidence of quality issues, resulting in defective product returns (DPRs), is a concern for firms bringing innovative products to market. Although a firm can recover value from DPRs through refurbishing, consumers are known to act strategically in anticipation of the future availability of refurbished units. We study a firm’s strategy for offering a new product and refurbished DPRs to strategic consumers across time. Academic/practical relevance: Aided by emerging shopping tools, an increasing number of consumers consider buying refurbished versions of products rather than their new counterparts. A novel contribution of our work is the recognition of the refurbishing of DPRs as a possible solution to the time inconsistency problem that arises when a firm offers products to strategic consumers across time. We characterize how the product line decisions and profit of the firm are influenced by the defect rate, the perceived quality of refurbished DPRs, and consumers’ hassle cost of returns. Methodology: We develop a two-period game-theoretic model to characterize the firm offering the new product and refurbished DPRs to strategic consumers across time. Results: The refurbishing of DPRs helps the firm implicitly commit to limiting the quantity of the new product offered in the future, allowing the firm to charge a premium for the new product today. As a result, firm profit may even increase with the defect rate. These results persist across various model extensions. Managerial implications: Whereas the firm’s profit is the highest when there are no defects, opportunities to achieve marginal reductions in defect rates may not be worth the investment and may even be counterproductive. Also, efforts toward enhancing the perceived quality of the refurbished product or decreasing the hassle cost for consumers may better serve the firm than efforts toward marginally improving defect rates.

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