Some innovations are more suitable for traditional NPD processes, others are appropriate for start-up innovation processes; which process is a best fit for a certain innovation is strongly related to the technology and market entry points. Is it a completely new technology or will it build on existing developments; does the market already exist or will it create an entirely new market? Company familiarity with new technology and new market is explained below.
Lack of familiarity with new markets often leads to major errors. A company needs to establish reasonable NPD approaches and performance expectations. Effective NPD may not always be the most rapid product development for a particular type of innovation. TTM is relative to the capabilities of the company and to the technology and market uncertainty. In technology-push situations the opportunities seen in new technologies lead a company into new markets outside traditional business (comfort zone). The role of technological and market applications focus in new product strategy has shown that the success of new products is in fact related to the degree of “new” in technologies and markets. The NPD addresses new market and new technology, in degree of familiarity.
- Familiarity with a technology: the degree to which knowledge of the technology exists within the company, not necessarily embodied in products.
- Familiarity with a market: the degree to which the characteristics and business patterns of a market are understood within the company, not necessarily as a result of participation in the market.
Three entry points of technology are defined for the NPD-framework.
- New technology: the degree to which that technology has not formerly been embodied within the products of the company.
- Enhanced technology: where substantial modifications are made in the existing technologies in order to create the new product.
- Existing technology: when the technology is embodied within existing products. It is incrementally modified to meet new application requirements.
Three entry points of the market are defined for the NPD-framework.
- New market: the degree to which the products of the company have not formerly been targeted at that particular market.
- Re-segment market: new product that re-segments an existing market or new product is radical enough to change the rules and shape of an existing market. There is some degree of certainty in terms of approaches to effective marketing.
- Existing market: when existing products are sold within this market.
Source: Berry, 1983, “Entering new business: selecting the strategies for success”.
Source: Steve Blank, 2006, “The Four Steps to the Epiphany”.
Source: Utterback, 1991, “When speeding concepts to market can be a mistake”.