According to a recent PDMA study, 76% of a new product launches do not achieve their intended ROI. Why? In today's challenging economic business environment and increased pressure on increasing revenue, gross margins, profitability and continued product innovation, how can enterprises improve their success rate for new products? We see "best of breed", innovative companies driving product managers towards quantifying their differentiated economic customer value earlier in a gate-driven new produ
Value modeling requires teamwork. Best practices show that this exercise demands the involvement of several functions in the organization: marketing, pricing, sales, finance, innovation, R&D, operations and others when needed. By working together, teams converge to reach consensus on value driver measurement models, the level of driver economic value and the value messages for every stakeholder. Convergence is critical for collaboration between functions and managing the complexity of value
In last week’s webinar “Incorporating Value in Your Stage Gate Process”, Dr. John Hogan of Value Management Advisors discussed his value-based framework for improving product development processes. Of course, no process can guarantee success, but the problem is stark: as seen in the chart below, based on evidence from PDMA’s new benchmark study, 76% of all new product launches fail to meet their revenue targets.
In our February 2013 webinar, "Incorporating Value in Your Stage Gate Process," Dr. John Hogan joined us to identify common value leaks, and using real customer examples, showed how to seal them by incorporating "value gates" into your development process. Click here watch the recording.
Q: Why are folks now more interested in thinking about value earlier in the product development process than before?
A: There are two fundamental changes in the marketplace going on. At the macro-level, coming
Nothing in business is static. Things change quickly, suddenly, and frequently. The same goes for value models. A value model will quickly be outdated, irrelevant, and obsolete. This is due to the dynamic nature of the critical elements used to model value. Value models need refreshing, need reworking, and need to reflect the dynamic change happening in the market place. I therefore conjecture that organizations using value-based pricing and building value models should do these activities dynam
How much ROI do you capture from your product innovations? Turns out that most companies have a poor track record of capturing their fair share of the differential economic value they provide to customers.
In this month’s webinar, “Maximizing ROI In Product Development”, Dr. Stephan Liozu shared best practices for integrating ROI into new product development (NPD) processes like Stage Gate. According to Dr. Liozu, it is absolutely essential to estimate the amount of economic value your new produ
In Part 2 of a two-part post, we address more questions from the webinar attendees based on the challenges they face during the New Product Development (NPD) process. Click here for Part 1.
Q: We are launching a new product in two years. The current next best alternatives have had difficulty getting traction after launch and have lowered prices significantly. Are there good ways to forecast future NBA prices when the market is dynamic?
A: Excellent question. Obviously depending on industry dyna
In our January 2013 webinar, "Maximizing ROI In Product Development", presented by Dr. Stephan Liozu, he shared his framework of integrating ROI in new product development (NPD) processes. Below is part 1 of a 2-part extended Q&A session with webinar participants. Click here to watch the recording and get a copy of the presentation slides. Click here to read Part 2 of the Q&A.
Q: What is the key stumbling block to maximizing ROI in new product development?
A: The biggest one that I've s
Assessing customer value is not an easy proposition. Difficulties in assessing customer value remain the number one barrier to successful value modeling and is often cited as the most difficult step of the process. However, there are customer research methods and techniques that exist and can help you in this difficult process. Each method has its strengths and limitations. In 1993, a group of researchers led by Anderson and Jain conducted a study to identify the use and familiarity of these met
New product development has been identified by industry leaders as the most important opportunity for capturing value and maximizing profit. The overall objective is to arrive at an appropriate launch price that truly reflects the fair share of the differential value created for the customer. Otherwise, the launch will fail to meet its financial targets. To accomplish this difficult task, product development must adopt an approach that incorporates a value-based strategy, taps into the enterpris