When one thinks of new product development in Apple, who comes to mind? Steve Jobs. Or consider this: who is usually associated with a recently launched product in social media? Facebook’s Mark Zuckerberg?
These examples are aberrations, and not the norm. The world over, new product ideas are usually generated by a set of people inside the organisation and are not necessarily individual efforts. If left to individual product visionaries, new product efforts may suffer once their tenures end, and the organisation will begin to lose innovativeness in the market place. Therefore, new product activity always needs to be treated as a team effort.
The team ideally needs to be cross-functional in nature. By that, I mean that there should be representation from all functions — marketing, sales, research and development, finance and human resources. Employees from all these functions should work together in developing, testing and launching a new product.
Sales and R&D
To start with, let us examine the role of the sales department. Right from planning the distribution, to talking to the distributors for financial investment, and from making the new product visible on retail shelves, to working out sales incentives, this department has a lot of responsibility related to new product activity.
Also, in the event of the new product failing, it is the sales department that has to undertake the difficult job of facing the trade and handling their disappointments. Hence, it is ideal to involve the sales department early on in new product activity by exposing them to key ideas, or by including them in the consumer research process. This will equip them with prior knowledge and help them take more ownership of the product.
Next, is the role of the research and development department. It is probably the only other function, apart from marketing, which plays a key role in the development of a new product. Right from the early stages of conception, to product testing and, later, tracking consumer use and acceptance, R&D needs to drive the effort.
The department also needs to continuously benchmark the product against the competition’s offerings in the market. The department is evaluated in terms of both the timeliness of product development as well as the cost. The latter is crucial as it determines the viability of any new product.
Packaging and finance
Next comes the role of packaging. While it may be surprising to many, packaging plays an important role in new product development. It provides both protection and aesthetic to the product. Protection enhances the product delivery in many cases, such as in the case of Frito Lays chips where the vacuum pack helps the chips stay crispy. In the hair colour category, packaging helps prevent air from entering the pack and makes sure the contents aren’t oxidised.
When is comes to the finance department, since the activity involves a fair amount of uncertainty, planning how to use resources is key to the success of the launch. Most organisations carry out ‘scenario planning’, which entails planning of the resources used at various stages. The finance department helps do this. The finance team also calculates the profitability of the new product based on its different price-points. Integrating this function early during the process of development will help the marketing team arrive at an optimal mix for it.
The human resource
Lastly, the human resource function needs to recruit appropriate personnel for this activity. Unlike a regular brand management function, this task needs people who can deal with uncertainty, be able to plan for the future, take decisions based on both instinct and data, network well with peers and also handle pressure well. Hence, the HR department will need to put together a set of variables that will improve the chances of such personnel succeeding in such a complex role. Training and development needs for this activity are also unique and the department should be able to perceive that and act accordingly.
The marketing department’s job is to put a suitable team in place to develop a new product. It should arrange for review meetings and proactively share information with everyone in the team to help the members make informed decisions.
Having cross-functional teams has several advantages. Time is saved as several issues are discussed simultaneously in the group. Problems are also solved more easily as there are multiple minds working on the issue. Additionally, any future potential conflict is also addressed in the presence of other team members, and this saves energy thereby increasing productivity. Overall, the output through a cross-functional team in a new product development set-up is richer and more robust.
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