We where fortunate to have five speakers from a wide verity of backgrounds share their experiences on New Product Development (NPD) One expert hailed from the Automotive world, another brought Intel and Mattel together, others worked in the software world, and one created products for sports ticketing agents. Without a doubt a very diverse group with over 100 years of experience in New Product Development.
Eric Rose was our first presenter. He is with Pinnacle Product Innovation Inc. Eric brought together the diverse interests of Mattel and Intel. It all started when two C level Execs started talking and decided on a joint NPD project. Talk about different cultures! Mattel’s business model was very seasonally focused, can you say Christmas and not think of toys piled under the Christmas Tree! Then you have Intel with a longer and much less seasonal sales cycle.
The NPD team numbered 50 people in both organizations. They developed two very successful products a kid’s microscope that attached to the USB port on a computer and the first Web Cam. Eric shared the genesis of the microscope from a kids microscope with a digital camera literally duck taped to the top to a finished product. Eric shared that developing this product was like raising a child. To keep everyone in the loop they held MAP Days, where they would cover the wall with post it notes and strings from one not to another to connect critical path items.
Kent Mihlbaur of Roster Marketing LLC Kent took us through the ups and downs of Hyundai Motor Co. He shared how in the early days Hyundai captured only those folks who could not get financing for a Toyota or Honda. This group didn’t even want a Hyundai, they where called the “Captured Resentfuls”. With quality problems dogging the brand, sales quickly dropped, things looked bad. They decided to get serious about improving quality. Even with a huge quality improvement, numbers still lagged. Kent said they were desperate. It took a lot of talking to get management to agree to do what they did next. They offered the “Best Warrantee in the Industry” this took away the fear and risk in the consumers mind and initiated 50% growth spurt. In Kent’s words, it eliminated risk and motivated the consumer changed their mind set.
This took them from the Captured Resentfuls to going after the more profitable practical thinkers – Practical Stylists. Hyundai again changed their model as the recession hit. The offered a buy back guarantee if you lost your job, this resulted in 19% growth when other auto manufacturers were closing factories.
Scott Hays of Epicor Software Co. Epicor concentrates on mid market ERP software for companies in the $50Mill to $1 Bill USD range. He shared that Software is amorphous; it is like a living animal, with similar frailties. They even get sick he quipped you all know they catch viruses….! Sustaining engineering often consumes resources that could have been working on NPD. Buying software is like buying a having a 2004 BMW and expecting to down load upgrades every few years to keep it up to date with the current 2012 BMW…!
Like many of us, we were facing resource scarcity. so how did we keep our NPD process moving? One approach that has worked well is working with our outside partners in specific markets to do custom products. We shared in the benefits as well. In many cases we needed country specific solutions to comply with local regulations, tax laws etc. Our local partners had the expertise and the motivation to add this level of functionality. By offering them the support and more critically a portion of the profits, we were able to gain country specific product enhancements that would have been years down the road based on internal resources. This approach resulted in country specific solutions and faster NPD within the same budget.
Dave Raber formerly with Ticketmaster/Paciolan, who has 90% of the college athletic programs as clients. Dave shared that version 1.0 of the software is easy, it’s version 1.2, 2.0 etch that is the trial.
The window for profitable sales of software is short, 3-5 years per new product verses a building where you can draw profit for 30 or more years. Ticketing is more than selling a “Seat” at an event, here are all sorts of up sells and re-fund issues. Some of the best ideas come from the clients themselves. If the game is rained out is there a refund, or do you get tickets at the next game, what seats are even available to give to the folks rained out, and many more issues.
Not to speak of perks: let’s say you want to sing the national anthem at a game….. sell 100 tickets or your group sells 100 tickets and you get to pick who sings the national anthem. The software will track these sales and award the perks. One can pre-buy food or credit for other concessions.
Due to the great presentation of speakers one through four, speaker number five was held in reserve for a future meeting.