Slide 8: The Product Innovation Charter Detailed document setting direction written by senior management As we know, PIC sets

s corporate direction of what senior management wants in the development of products 4 components background: explaining to employees rational for development of product Drypers needs to be competitive to increase revenue by a new product Focus Expand on customer base; utilize a SWOT analysis The company did survey, which help them realized that babies have rashes at least once a month and can be very irritating. So the focus is to create a new diaper with better absobency and skin care benefit.

Goals and objectives What the company wants to achieve and accomplish, has to be very specific Drypers goal is to produce a qualified new diaper which can meet the costumers needs Guidelines Conditions management puts

Dual Driver strategy: markets and technology Dual driver strategy: best new ideas come from customers saying they want something and technology develops it Smart-C

Slide 9: Concept Generation The second phase of NPD is Concept Generation

Managing by objectives: coming up with ideas and being creative, allow failure allocating resources and inducing a creative environment is important Hire creative people

Sources of new ideas: problem/opportunity based concept generation Analysis of problem through research and development (inside the company) concept of a new idea begins with a need,company should listen to the voice of the customer Research indicated that 2/3 of babies experience some form of diaper rash monthly and 1/3 of parents stated their babies suffered diaper rash frequently

management should go out and meet people and employees creating happy customers and better employees

Analytical Attributes Technique AAT addresses concept generation; allows to create a new product by adding/changing attributes Dryper added features which allow for certain functions to benefit the customer They added aloe vera in the material,which is a new feature. Function is to provide skincare. Benefit is that there will be less rashes and baby can have a softer skin. Perceptual Gap Analysis Look for perceived gaps (what customers see and believe) Based on attribute ratings, Dryper found a gap in the market: there is a need for a diaper that minimize the rashes and provide the skin care benefit

Slide 10:

Concept evaluation

The third phase of new product development is concept evaluation It is a continuous process and there is usually more than one concept at a time is being evaluated (compete for resources)

Cumulative expenditure curve Dryper has a late expenditures curve. Because the diaper is a consumer product, so the technical expenditure is small, but the company will spend a lot of money on continuous advertisement. The ATAR model Profit contribution = Market potential x Awareness x Trial x Availability x Repeat

purchase x Margin ATAR concept model allows us to forcast the sales and profitability Change a variable, you change an outcome Market potential is huge. There is about 10 million consumers, and most of them are babies born to 30 months. Each baby is worth $2000.

Every baby needs 5-10 diapers/day, so the repeat purchase is high. the awareness is a drawback, because Dryper is not a famous brand as Huggies and Pampers. So it is very important to do more advertisement to help increase the profit.

NOTES FOR PRESENTATION Slide 2: Background - The objective of marketing is to make more of a product in less time while staying within budget o Our examples will focus on Dryers diapers - The goal of marketing is to give customers a reason to spend money - Products that are low technology are usually faster because customers can understand product functioning better Slide 3: Reasons to make a new diaper - diapers can be considered a necessity among parents o it is a homogeneous product, which means that the product is the same for everyone that makes it causing profit margins to decline and potentially losing a competitive advantage - the products of different competitors are the same and since there are many brands, it will be hard for a company to enter the market if they are not an early starter o improving the product by adding an extra quality such as skin care or odor control will give Drypers a competitive advantage causing an increase in revenue through larger market share o the product can be repositioned to focus on decreasing baby rashes - Drypers wants to penetrate the market through advertising and utilizing various distribution channels instead of local grocery stores

Slide 4: How to avoid failure and ensure success - a saturated market is a market that has sales but not enough revenue potential to satisfy the economy causing revenue to decrease o there needs to be a new way to get revenue potentially though a new segment or a new product Drypers focuses on a niche market: parents concerned with skin care (buy diapers with aloe vera) A new product is created because it has an added feature that other brands do not - Procter and Gamble introduced the first diaper causing them to become a market pioneer o Drypers, a smaller competitor, pursued value-added strategies stating that their brand fit better and was more absorbent attempting to target more price-sensitive consumers o Smaller companies introduce most of the new products because they have faster and smaller niches compared to large companies that have many levels to go through Slide 5: Accelerated Product Development - new product development is all cost and no revenue, the goal of Drypers company is to manage costs - management has to become more efficient o Drypers executives held meetings to discuss various ways to increase revenue and curb competition - these ideas were set up by process management thinking: a series of activities and objectives were created to sell products - Drypers partnered with Associated Hygienic Products and maintained the name Drypers due to brand recognition and awareness, causing the company to increase in market revenue and become more competitive Slide 6: Phases of Development - these are the five phases we will go more in depth on each section dealing with Drypers brand - A quick overview: o This is a process and disciple and defines the way of doing things, by following each step you can eliminate inefficiency and redundancy and become more successful o OI: where does the idea come from, inside or outside the company o CG: translate idea into a product, is there a need for it o CE: get to a certain point and decide if to continue or stop Employees know what they have to do, its a unified plan with everyone working toward a common goal - define the opportunity or problem: want to minimize baby rashes

conduct primary (more expensive, time consuming) and secondary research (easy to receive, data can be outdated)

Slide 7: - strategy determines structure - MS/VS defines your bsiness and how you run it o 3 components: Product/service/industry : personal care products high end segmentation: babies/mothers how they will accomplish it: continuous improvement - Platforms provide a common shared basis o Design of the diapers are very similar, shared resources between companies doing business - line of business provides organization structure: defines business units and how product will be; direction of company o Drypers is in personal care products: odor control with baking soda, skin care with aloe vera Slide 8: PIC - PIC sets the tone for everyone, sets corporate direction of what senior management wants in the development of products - 4 components o background: explaining to employees rational for development of product Drypers: need to be competitive to increase revenue (using advertisements and added qualities) o Focus Expand on customer base; utilize a SWOT analysis Conducting research the company realized that babies have rashes at least once a month and can be very irritating, create a diaper that targets this need o Goals and objectives What the company wants to achieve and accomplish, has to be very specific o Guidelines Conditions management puts - Dual driver strategy: best new ideas come from customers saying they want something and technology develops it o There was a gap in the market: needed a diaper that minimized the rashes babies were receiving from diapers Slide 9: Concept Generation - allocating resources and inducing a creative environment is important for CG - management should go out and meet people and employees - creating happy customers and better employees

concept of a new idea begins with a need: need to input a lot of time and money to discuss the form of the product listening to the voice of the customer: research and statistics AAT addresses concept generation; allows to create a new product by adding attributes

Slide 10: CE - continuous process o usually more than one concept at a time is being evaluated (compete for resources) - ATAR concept model allows for understanding sales and profitability o Change a variable, you change an outcome

Slide 11: MIR - market worth: market potential and size of market (not concerned with demographics) o market is almost $4 billion dollar industry - Drypers firm worth is conducted based on the added value and how much mothers may be willing to pay extra for the feature - Firm worth: how quick the money is going to come in, whats it going to cost