New Product Development Is One Important Business Marketing Essay

New product development is one important business activity which reflects to the changes of the current market condition as well as competition in every business industry. Therefore, such monumental changes have given an impact to the commerce that forced companies to innovate their product even more intensely. As a result, business firms must actively innovate to cut through the clutter of the complexity and difficulty of new product development function. According to Deborah, new products may be defined as both product and service. Also, companies’ new product development are produced by the size of the industry in which it operates. (Reference) The purpose of this report was to look into Apple’s new product development process by understand it before comparing with Crawford’s process. On that comparison, some of the steps will be identified and analysis through. Additionally, this report may give a recommendation on every aspect of the new product phases and that includes an understanding of why and how new products fail so easily in most of the time.

1.2. Method

The information used in this report was gathered by using the sources from the internet and textbook. Therefore, the 9th edition of New Products Management textbook by Crawford was one of the main references that provided the details of new product development phases that were used to apply in this report.

1.3. Company’s Background

Apple Inc. is a multinational company that sells consumer electronics such as the iPhone, iPod, iPad and MacBook. The co-founder Steve Jobs invented the first Apple Computer in the year 1976 in California. As time went by, Apple had been growing intensely due to its latest invention. Apple managed to establish majority of the market share in the consumer electronics industry. At the present, Apple can be known as the largest technology firm in global with an approximately $60 billion of annual revenue. (Apple, 2010)

2. Findings

2.1. Apple’s New Product Development Process

Chart A

Chart A simply shows the new product development process of Apple Company. Apple’s new product process phases initially go with the idea generation. Many great ideas were generated based on the innovation of the employees. They always have a vision on what is the next trend and that actually creates opportunity for them. According to Steve Jobs, Apple never relies on market research to invent a product that suits the market demand. However, they create demand to the market as for instance, people were queuing up for the new iPhone 4 when it first released. (reference)

Ideas then are brought into conception phase which they will be evaluated and significantly picked for the best one. Otherwise Apple may continue to develop the basic concepts to further the improvement. Innovation basically takes place in this phase because those raw ideas need to be crafted in the conception and it is important that Apple gets a clear concept of what they are doing. (reference)

The third phase would be concept developing which involves taking basic concepts to develop into the final blueprint for production. A blueprint is a finalized plan that is ready to get into production. (reference)

In the manufacturing phase, specification adjustment is required to ensure all the products are functional as planned before they are distributed. In some cases, there could be several technical issues on the product which will need to be fixed before it enters into packaging process. Additionally, Apple strictly emphasize on quality control on their products. It is their top priority and their main mission to produce solid quality gadget to the end user. That has defined Apple in a quality differentiation from other competitors. (reference)

After the completion of the product, it is then distribute in Apple stores globally. Apple do not really need a lot of marketing effort to increase their product sales. It is the fact that people were queuing up on the day the product is to launch. In some cases, the demand was higher than the supply and that caused supply shortage to Apple. (reference)

Feb 17, 2010 Amanda Dahl

2.2. Organization’s New Product Development Process vs. Crawford’s Process

Figure B: Crawford’s new product development process

Both Apple and Crawford’s new product development process are quite different. Based on Figure B, Crawford identifies the first phase as opportunities but not a specific product concept. It is suggested that opportunities comes from the time to time changes of marketing plan, market demand and resources aspect such as discovering of a new material with many potential uses. (reference) In other words, opportunity identification is a preliminary strategic statement that furthers the development of the rest phases. Apple may be different in this phase because it has no intention of using marketing research to look for opportunities. The company has got what it takes to control consumers’ interest and releasing a new product seems like creating a demand to the market already. Apple initially begins with idea generation and new product ideas are visualized and refined. A systematic of new product ideas search should be adopted for every company otherwise it would be difficult to generate ideas that are effective after all concept generation is all about creating a large number of ideas. In addition, these phases can optimize the complexity and risky of concepts however it could also be very slow. Never the less, human resources influence the company overall ability to handle the new product development. Goals clarification and vision ensure that new product ideas will carry out well in the correct direction. However sometimes generating new ideas to solve problems is not an easy task because they could be costly to be done.

On phase two, concept generation, Crawford gather a pool of new ideas included from customer and generates a new one. It is therefore process by choosing the highest potential problems as the best opportunity. (Reference) Apple basically did the same thing which they screen all the fresh ideas and eliminates them at most to three. Hence, the best one will be chosen to proceed to the next phase. Apple strongly emphasize on new ideas to match with its company’s vision and main objectives. Concept generation phase will work well if Apple included every technical feasibility to details, for instance the proposed applications and the identification of the application target market respectively. All in all, new product development costs may be really expensive in the later stages therefore it is important that companies choose the only concept that will become profitable.

Crawford on phase three concept, evaluation, is a detailed version of the new product concepts that based on how consumers perceive on it. It involves in breaking down the criteria such as technical, marketing, and financial. Basically it gives a pretechnical evaluation on the new ideas and followed by running a concept testing to see if there are any potential demands from consumers. Ultimately, they are all brought together in order to create a statistic, chart, and model for making decision of taking or leaving the concepts. If the concept was in an agreement to develop, the next step would involve in planning the resources for that protocol. Apple in this phase is quite different from Crawford step because they do not involve customer on their product evaluation. Generally, they are confident with their innovative production and that is because of their strong company vision. Not all company can become as successful as Apple therefore companies without relying on marketing research would simply rather just a risk for them if they do not have the capability to achieve what they are after.

Crawford’s phase four is an implementing stage where the product concept will take into business analysis stage before it goes in production. At this point, the analysis is all about the marketing plan, manufacturing costs, packaging, branding and other necessity. Hence, after passing the first three stages an idea may be discarded once marketing due to limited potential for profitability or commercial success. Hence, the mass production will take place when the analysis is complete and it is sent through the distribution channels. In some cases, minor modifications can be adjusted to suits the demand of users however the product eventually will need them to decide if they would accept or reject the concept. Apple emphasizes its manufacturing stage to a significant level when it comes down to quality monitor for its electronic device. Quality control is a part of the corporate DNA and they understand that everyone needs quality products without any questions. Apple is adding value to its customer perspective on the new product as well as to satisfy their needs and meet desired quality levels at lowest production costs. Additionally, companies can use quality function deployment (QFD) to develop and enhance their product concept.

The last stage would be the launching of the prototype development where company starts making profits. The plan has to be commercialized before making out sale from any distribution channels. According to Crawford, goals and objectives should be achieved based on the product innovation chart (PIC). Many companies have emphasized on the first four phases to reduce the escalation costs from the beginning of first stage. Commercialize basically involves in the marketing mix and aiming for an appropriate timing to launch the new product. Apple claimed that they can push their product easily without really relying much on the marketing effort. However, it is important to ensure that there are no threats on the level of investment and risk at this stage. Also, an initial marketing strategy for introducing the product to the market is equally essential to be considered because it helps to forward the brand and the product to the right place and people at the right time. In some cases, test marketing is needed to ensure the outcome of the introduction would run successfully. The involvement in the new product stages like employee, customer, and suppliers can be important as the rest. Company should never take risk on faster product development because it may cost more than the orderly process. Apart of that, quality of production may be not achieved by the result of rushing a product. Majority new product fail due to the concept was not good enough for example product was poorly designed, inappropriate positioned in market, expensive, or bad marketing. Such potential problems may occur in the later stages as a result there will be delaying and redesigning which is a waste of money and time.

2.3. What is Apple doing so well?

Apple has been so successful in the past few years due to its creative way of inventing its product and running the business. The brand consists of great style and design and the company uses great strategy and innovative marketing to attract customers. The latest iPhone 4 could be few years ahead of all its competitors. It is an amazing product in mobile phone category and it has friendly user interface along with elegant design. Apple has come out a product that is far beyond a regular smart phone because it understands that innovation goes beyond the product itself. (Breillatt, 2008) Apple’s product development process can only be characterized as innovation-driven. Therefore, innovation is an important asset for Apple to stay in the market. Steve Jobs, the chief designer of Apple was the person who makes the ultimate decisions. In terms of leadership, Steve Jobs vision is part of the Apple company asset as well. He spends most of his time monitoring the development process just to be ensured that the final product will come out exactly like he planned. Apple sells about 30 major products unlike other companies with similar revenues sell hundreds of products. Therefore, Apple has the benefit of focusing on perfection in every major and minor feature of its product (Breillatt, 2008). Apple generally operates quietly and hardly speaks to the public about future products. However, information was sometimes leak to the market intentionally in order to see how the market reacts (Breillatt, 2008). iPad did not have its official announcement saying that the actual developing day of the device until the finishing day when it was released. By the time it launched, it was a hit to the market as well.

Apple came out with much effort on refining the ideas in order to make sure the applications and products can reach the market perfectly. For instance, Apple hardware designer will start producing several different pixel-perfect mock-ups for the device screen. Then, they are reduced to a minimum which allows the team to spend some time to refine them to the perfect last one. As a matter of fact, the corporate did a very good job to its screen pixel that can show fine details of anything that presented from the screen. It actually allows customers to release from the unnecessary vision ambiguity. According to Helen Walters, there are always a paired design meeting that held every week for Apple’s engineer and designer teams. They also organize brainstorm meeting that involves in thinking without any rules constraint and therefore such approach is to solve problems or to enhance existing products. The next one would be the production meeting that is about how to implement structure around the innovative ideas. They are considered two crucial meetings for Apple to successfully develop any application which it is a part of their corporate DNA. (reference) According to Steve Jobs, Apple never did its market research because he claimed that they aim to create demand to the market. In other words, Apple never intended to survey people on what is the next booming trend but the brand will launch products that surprised everyone. This is the kind of focus allows them to evolves themselves from an extensive level to perfection.

The lack of customer and supplier involvement in Apple’s new development process would be a success factor to them. the company is known for ground-breaking innovation that might be beyond the imagination of these groups, but it might help make the process more efficient if they were allowed to enter the discussion in the early stages of product development.

In the first quarter of 2010, Apple reported revenues of $13.5 billion. While the company does not specify how much of these revenues come from new products, it does state that 40% of total net sales were attributable to the iPhone, which was first introduced three years ago and has been upgraded to a newer version every year since then. And finally, the iPad is proof for the company‟s ability to create and enter new markets. Today it is worth $169B‟ (Dixon, 2009).

October 8, 2010 You Can’t Innovate Like Apple

Helen Walters

3. Conclusion

Carrying out fresh ideas to a stage of developing the production requires a good organizational structure as a general rule. Leadership and team effort influence the effectiveness and efficiency of how new products are introduced to the market. Basically meetings and brainstorming of ideas will answer to the viable solutions for customers. Again, new product needs to be optimized in the right direction and guidance based on the vision and goals of companies. The coordination of internal structure such as the engineering, manufacturing, and marketing plans in the new product development process is the backbone of the whole process to be success. In addition, the right people for the right job will determine the new product concept outcome. Market testing may be high on costs but they are always small when compared to the costs of making a major mistake. Companies must constantly involve in developing new products and services to improve their productivity based on experience. For instance, company like Apple never stop innovates in new ideas. It is recommended for large corporation to consider cross-functional teams to skip a few steps in the new product development process which allows cutting down some time. The core of most failures in new product could be the cause by poor management and planning. Protocol must be taken in account for new product development projects and it is really important to the bigger firms with running more than one new product projects at the same time. On top of that the five basic resources like financial, human resource, raw material, technology and time provides the accessibility and the capability of carrying out the project. Companies that based on Crawford new product development process model should try to follow every step because when these steps are accomplished, decision can be made again whether to continue or discontinue the idea. Therefore, to lower these risks, companies may need to adopt their own systematic new product development process for the sustainability of the growth of new products. Last but not least, company should learn how to spend its time and money to have their tasks in the development process to completed and therefore they can estimate their investment in the process. Hence, great management of new product development process is everything like an asset to an organization.

What Are the Four Basic Phases of the Innovative Process?

By Shaun Fowler, eHow Contributor

updated: April 11, 2011

Product Development and Management Association (PDMA), The PDMA Glossary for New Product Development, Published: 2010, Retrieved: 17 February 2010

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