The development and manufacture of new products are some of the most heralded activities in business. It is often approached with much-justified optimism since these new items get to jump on the competition. Therefore, research and development departments need to be thorough in new product development processes to ensure that new products achieve relatively easy market penetration. Checking on product functionality and appeal will be significant throughout the process.
West White has a new innovative idea of manufacturing two appliances in one. As Tom suggests, the research and development department did generate the idea. They then did concept testing involving four groups: young males, old males, old females, and young females, and they found out that the product could be more appealing to young males than other groups. The company then went ahead to do a quick product development where they produced a prototype of the Moat, a product that combines a Microwave Oven And Toaster in a single appliance. Finally, they developed a production line while they started marketing through trade promotion marking commercialization.
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While West White picked up an innovative idea that was already growing fast in Europe, its product development process lacked in many ways from the beginning. The first undoing was how they did idea generation. Usually, R&D teams generate hundreds of ideas before they make a pick. They do so by relying on internal as well as external sources of ideas. The R&D department has to take contributions from employees as well. However, for West White, they do not seem to take as many ideas or even seek opinions from employees. Tom settles on a single idea that the R&D has conceptualized and convinces other coworkers to adopt it. Since they failed on idea generation, they passed idea screening as they did not have multiple ideas to choose the best from.
To the next step of concept development, multiple concepts of the same product need to be developed to establish the favorite concept. For concept testing, it is important to use physical and symbolic representations so customers can evaluate and give their views regarding the product. It makes the testing objective and reliable as the consumer appeal gets established. West White also failed in this step as customers say that the product is physically unattractive, something concept testing could have managed earlier.
The company also failed to do marketing strategy development after skipping concept testing. They should have described their target market, the planned value proposition, the sales, and potential market share with the projected profit goals in the first few years of commercialization. It could also be significant to do an outline of the planned price for the Moat as well as the distribution and marketing budget for the first few months. Additionally, they should have also planned long-term sales and set the profit goals with a proper market mix strategy.
The next step could have been business analysis with a review of costs, sales, and profit projections to check whether the new products could help the company achieve its $10 million pre-tax profits per year. It could also help decide if they could take advantage of lower overseas production costs through market surveys. Only then could they go to product development, not essentially domestic. The company could have included test marketing to test the product and the marketing strategy to align the advertising, distribution, and positioning strategy. It is only after having followed all these steps they could commit and commercialize the Moat. Notably, the launch's timing was a bad decision as it coincided with a time when Samsung, a renowned competitor, was launching its new range of appliances.
In the future, it could be important that West White follows all the steps as mentioned above, when developing a new product. Importantly, they will need to do proper market research and take as many ideas from internal and external sources. They could also have to develop figures on sales and profit projections after concept testing for a good marketing strategy. Lastly, extensive competitor research will be necessary to build on their weaknesses rather than establish a whole production line to make a few sales that could affect their finances.
