Question

Case Study – Novelty Creations Howard Booth is disappointed. His company, Novelty Creations has just withdrawn from its latest venture after three unsuccessful months of trying to market a new product. The company markets a range of novelty ‘lifestyle’ products using a direct mail brochure and the internet. Products marketed include a rainwear range for dogs and cats, an automatic odour protection device for bathrooms and ‘make-your-own’ birthday card kits. In its outdoor collection it markets a range of garden lights in the shape of garden gnomes and self-erecting clothes dryers. It has over one hundred individual personal items including nose-hair clippers, blood pressure monitors and earwax removal systems. The company is always looking for new product ideas as the essence of keeping sales moving is novelty and interest. The product just withdrawn after three months in the brochure, and slightly longer on the website, was an extended toenail clipper whereby a person could clip their toe nails without having to bend down. Not all new products succeed, but Booth’s problem is that this is the tenth recent new product failure and he is worried that the company is losing direction. New product ideas come from an in-house team consisting of Booth and two other directors. All are from technical backgrounds. Customers are not consulted at the stage of idea generation as it is felt that they would be unable to grasp many early stage concepts. Idea generation sessions take place on the last Friday of every month and usually result in about ten new ideas being put forward and discussed. As the major shareholder of the company, Booth takes it upon himself to select which, if any, of these ideas should be taken further with a view to including them in the product portfolio. He uses his own judgement in this screening process as he feels that the growth of the company is down to his ‘feel’ for the market. Once a product idea is selected, Booth and his team find someone who can make the product and it is then incorporated in the brochure and on the website. He believes that the best test of a product is whether it sells or not and for this reason no marketing research is conducted before its inclusion in the product portfolio. Once the product is launched, a small sample of customers are contacted randomly and asked to complete a questionnaire regarding their views on this product and other company products. Booth is seriously concerned about recent product failures and is wondering if a different and perhaps more systematic approach to developing new products might be appropriate. He is looking for advice about what the company might be doing wrong and how it might improve its new product development procedures.

Question-

Evaluate the company’s approach to new product development and suggest how the company might improve its success rate for future new products. Do a SWOT analysis.Suggested approach The answer really lies in the fourth and fifth paragraphs i.e. customer are not consulted at the stage of idea generation, and the obviously misguided belief that marketing research is not necessary. Clearly, ‘a feel for the market’ has been successful in the past as it appears that the company has been relatively successful. However, customers are now more discerning as witnessed by new product failures. ‘Brainstorming’ springs to mind as a technique that might be appropriate in vetting new product ideas, ensuring that appropriate personnel are included in such brainstorming sessions, including potential customer. The next technique that springs to mind is ‘focus groups’ consisting of a good moderator and customers who have previously purchased the company’s products.

Answer 1

Current Approach -

1) 3 people including Booth brainstorm the idea once a month on Fridays

2) Booth himself select the ideas to be taken forward

3) No marketing research is done prior to launching the product

4) A small sample of consumers is asked about the reviews of the product

Strength of the process -

1) Fast - No time is wasted in too much brainstorming since team size is small. Marketing research is also time-consuming and is not done.

2) Avoids Conflicts - Pretty much everything is handled by Booth and his team comes into the picture only when the product is to be launched.

3) Cost savings - Costs are saved since no specific teams pertaining to market research, Idea generation, etc. No prototypes are created.

Weakness

1) Fresh Ideas - There is a limit to the freshness of ideas when the team size is just three and sessions are held once a month only.

2) High Risk - By not engaging in consumer research and market study in the initial phase, the company is taking on a lot of risk with respect to product launch.

Improvement Areas -

1) The iterative process needs to be followed wherein any idea that is being pursued needs to be defined as the market study goes on.

2) Take on market study and consumer research studies early into the product development cycles to plug the loopholes if any.

3) There is a clear need for putting in place a points bases system to rate the merit of each idea and also whether on execution it was successful or not. Plus, internal employees can be used to rate these ideas.