Notice for Glossary:
Alliance: Formal arrangement with a separate company for purposes of development, and involving exchange of information, hardware, intellectual property, or enabling technology. Alliances involve shared risk and reward (e.g., co-development projects). (See also Chapter 11 of The PDMA HandBook 2nd Edition).
Alpha Test: Pre-production product testing to find and eliminate the most obvious design defects or deficiencies, usually in a laboratory setting or in some part of the developing firm’s regular operations, although in some cases it may be done in controlled settings with lead customers. See also beta test and gamma test.
Alpha Testing: A crucial "first look" at the initial design, usually done in-house. The results of the Alpha test either confirm that the product performs according to its specifications or uncovers areas where the product is deficient. The testing environment should try to simulate the conditions under which the product will actually be used as closely as possible.
Analyzer: A firm that follows an imitative innovation strategy, where the goal is to get to market with an equivalent or slightly better product very quickly once someone else opens up the market, rather than to be first to market with new products or technologies. Sometimes called an imitator or a "fast follower."
Applications Development: The iterative process through which software is designed and written to meet the needs and requirements of the user base or the process of enhancing or developing new products.
Architecture: See "product architecture."
Architectural innovation: Combines technological and business disruptions. A well-quoted example is digital photography, which caused significant disruption for companies such as Kodak and Polaroid.
Attribute Testing: A quantitative market research technique in which respondents are asked to rate a detailed list of product or category attributes on one or more types of scales such as relative importance, current performance, current satisfaction with a particular product or service, for the purpose of ascertaining customer preferences for some attributes over others, to help guide the design and development process. Great care and rigor should be taken in the development of the list of attributes, and it must be neither too long for the respondent to answer comfortably or too short such that it lumps too many ideas together at too high a level.
Audit: When applied to new product development, an audit is an appraisal of the effectiveness of the processes by which the new product was developed and brought to market. (see Chapter 14 of The PDMA ToolBook 1)
Augmented Product: The Core Product, plus all other sources of product benefits, such as service, warranty, and image.
Autonomous Team: A completely self-sufficient project team with very little, if any, link to the funding organization. Frequently used as an organizational model to bring a radical innovation to the marketplace. Sometimes called a "tiger" team.
Awareness: A measure of the percent of target customers who are aware that the new product exists. Awareness is variously defined, including recall of brand, recognition of brand, recall of key features or positioning.
Benchmarking: A process of collecting process performance data, generally in a confidential, blinded fashion, from a number of organizations to allow them to assess their performance individually and as a whole.
Benefit: A product attribute expressed in terms of what the user gets from the product rather than its physical characteristics or features. Benefits are often paired with specific features, but they need not be.
Best Practice: Methods, tools or techniques that are associated with improved performance. In new product development, no one tool or technique assures success; however, a number of them are associated with higher probabilities of achieving success. Best practices likely are at least somewhat context specific. Sometimes called "effective practice."
Best Practice Study: A process of studying successful organizations and selecting the best of their actions or processes for emulation. In new product development it means finding the best process practices, adapting them and adopting them for internal use. (See Chapter 36 in the PDMA HandBook 2nd Edition, Chapter 33 in The PDMA HandBook, Griffin, "PDMA Research on New Product Development Practices: Updating Trends and Benchmarking Best Practices," JPIM, 14:6, 429-458, November, 1997, and "Drivers of NPD Success: The 1997 PDMA Report," PDMA, October, 1997)
Beta Test: An external test of pre-production products. The purpose is to test the product for all functions in a breadth of field situations to find those system faults that are more likely to show in actual use than in the firm's more controlled in-house tests before sale to the general market. See also field test.
Beta Testing: A more extensive test than the Alpha, performed by real users and customers. The purpose of Beta testing is to determine how the product performs in an actual user environment. It is critical that real customers perform this evaluation, not the firm developing the product or a contracted testing company. As with the Alpha test, results of the Beta Test should be carefully evaluated with an eye toward any needed modifications or corrections.
Big data: extremely large data sets that may be analysed computationally to reveal patterns, trends, and associations, especially relating to human behaviour and interactions.
Bottom up portfolio selection: starts first with a list of individual projects and through a process of strict project evaluation and screening ends up with a portfolio of strategically aligned projects.
Brainstorming: A group method of creative problem-solving frequently used in product concept generation. There are many modifications in format, each variation with its own name. The basis of all of these methods uses a group of people to creatively generate a list of ideas related to a particular topic. As many ideas as possible are listed before any critical evaluation is performed. (See Chapters 16 and 17 in The PDMA HandBook 2nd Edition.)
Brand: A name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers. The legal term for brand is trademark. A brand may identify one item, a family of items, or all items of that seller.
Break-even Point: The point in the commercial life of a product when cumulative development costs are recovered through accrued profits from sales.
Breakthrough projects (sometimes referred to as radical or disruptive). These projects strive to bring a new product to the market with new technologies; depart significantly from existing organizational practices; and have a high level of risk.
Business Analysis: An analysis of the business situation surrounding a proposed project. Usually includes financial forecasts in terms of discounted cash flows, net present values or internal rates of returns.
Business Case: The results of the market, technical and financial analyses, or up-front homework. Ideally defined just prior to the "go to development" decision (gate), the case defines the product and project, including the project justification and the action or business plan. (See Chapter 21 of The PDMA HandBook 2nd Edition).
Business-to-Business: Transactions with non-consumer purchasers such as manufacturers, resellers (distributors, wholesalers, jobbers and retailers, for example) institutional, professional and governmental organizations. Frequently referred to as "industrial" businesses in the past.
Buyer: The purchaser of a product, whether or not he or she will be the ultimate user. Especially in business-to-business markets, a purchasing agent may contract for the actual purchase of a good or service, yet never benefit from the function(s) purchased.
Cannibalization: That portion of the demand for a new product that comes from the erosion of the demand for (sales of) a current product the firm markets. (See Chapter 34 in The PDMA HandBook 2nd Edition).
Capacity Planning: A forward-looking activity that monitors the skill sets and effective resource capacity of the organization. For product development, the objective is to manage the flow of projects through development such that none of the functions (skill sets) creates a bottleneck to timely completion. Necessary in optimizing the project portfolio.
Carbon credits: By a simple Cost of Goods calculation the indirect cost from Externalities (effects of a product or service on other people than the producer and user) are not reflected. This can be CO2, but also social impact. Integrating all externalities in your (shadow) price gives the “Real Price”.
Cash cows: products that have a high share of a market which has low overall growth
Centers of Excellence: A geographic or organizational group with an acknowledged technical, business, or competitive competency.
Certification: A process for formally acknowledging that someone has mastered a body of knowledge on a subject. In new product development, the PDMA has created and manages a certification process to become a New Product Development Professional (NPDP).
Champion: A person who takes a passionate interest in seeing that a particular process or product is fully developed and marketed. This informal role varies from situations calling for little more than stimulating awareness of the opportunity to extreme cases where the champion tries to force a project past the strongly entrenched internal resistance of company policy or that of objecting parties. (see Chapter 5 in The PDMA ToolBook 1st Edition.)
Charter: A project team document defining the context, specific details, and plans of a project. It includes the initial business case, problem and goal statements, constraints and assumptions, and preliminary plan and scope. Periodic reviews with the sponsor ensure alignment with business strategies. (see also Product Innovation Charter)
Checklist: A list of items used to remind an analyst to think of all relevant aspects. It finds frequent use as a tool of creativity in concept generation, as a factor consideration list in concept screening, and to ensure that all appropriate tasks have been completed in any stage of the product development process.
Circular economy: an economy that is restorative and regenerative by design, and which aims to keep products, components and materials at their highest utility and value at all times, distinguishing between technical and biological cycles.
Cluster sampling: the population is divided into clusters and a sample of clusters is taken.
Collaborative Product Development: When two firms work together to develop and commercialize a specialized product.
Co-location: Physically locating project personnel in one area, enabling more rapid and frequent decision-making and communication among them.
Commercialization: The process of taking a new product from development to market. It generally includes production launch and ramp-up, marketing materials and program development, supply chain development, sales channel development, training development, training, and service and support development. (See Chapter 30 of The PDMA HandBook 2nd Edition).
Competitive Intelligence: Methods and activities for transforming disaggregated public competitor information into relevant and strategic knowledge about competitors' position, size, efforts and trends. The term refers to the broad practice of collecting, analyzing, and communicating the best available information on competitive trends occurring outside one's own company.
Concept: A clearly written and possibly visual description of the new product idea that includes its primary features and consumer benefits, combined with a broad understanding of the technology needed.
Concept Generation: The processes by which new concepts, or product ideas, are generated. Sometimes also called idea generation or ideation. (See Chapters 15 and 17 in The PDMA HandBook 2nd Edition.)
Concept Screening: The evaluation of potential new product concepts during the discovery phase of a product development project. Potential concepts are evaluated for their fit with business strategy, technical feasibility, manufacturability, and potential for financial success.
Concept Statement: A verbal or pictorial statement of a concept that is prepared for presentation to consumers to get their reaction prior to development.
Concept Testing: The process by which a concept statement is presented to consumers for their reactions. These reactions can either be used to permit the developer to estimate the sales value of the concept or to make changes to the concept to enhance its potential sales value. (See Chapter 6 in The PDMA HandBook 2nd Edition)
Concurrent Engineering (CE): When product design and manufacturing process development occur concurrently in an integrated fashion, using a cross-functional team, rather than sequentially by separate functions. CE is intended to cause the development team to consider all elements of the product life cycle from conception through disposal, including quality, cost, and maintenance, from the project's outset. Also called simultaneous engineering. (See Chapter 30 of The PDMA HandBook 1st Edition.)
Conjoint Analysis: Conjoint analysis is a market research technique in which respondents are systematically presented with a rotating set of product descriptions, each of which contains a rotating set of attributes and levels of those attributes. By asking respondents to choose their preferred product and/or to indicate their degree of preference from within each set of options, conjoint analysis can determine the relative contribution to overall preference of each variable and each level. The two key advantages of conjoint analysis over other methods of determining importance are: 1) the variables and levels can be either continuous (e.g. weight) or discreet (e.g. color), and 2) it is just about the only valid market research method for evaluating the role of price, i.e. how much someone would pay for a given feature (See Chapter 18 of The PDMA HandBook 2nd Edition).
Consumer: The most generic and all-encompassing term for a firm's targets. The term is used in either the business-to-business or household context and may refer to the firm's current customers, competitors' customers, or current non-purchasers with similar needs or demographic characteristics. The term does not differentiate between whether the person is a buyer or a user target. Only a fraction of consumers will become customers.
Consumer Market: The purchasing of goods and services by individuals and for household use (rather than for use in business settings). Consumer purchases are generally made by individual decision-makers, either for themselves or others in the family.
Consumer Need: A problem the consumer would like to have solved. What a consumer would like a product to do for them.
Consumer Panels: groups of consumers in specific sectors, recruited by research companies and agencies, who are used as respondents to answer specific research questions relating to product testing, taste testing, or other areas. Most often. they are a specialist panel who take part in numerous projects. Consumer panels are particularly useful for short, quick surveys, where the emphasis is on a sample of those with specialist knowledge rather than a representative sample of the general population
Contingency Plan: A plan to cope with events whose occurrence, timing and severity cannot be predicted.
Continuous Improvement: The review, analysis and rework directed at incrementally improving practices and processes. Also called Kaizen.
Continuous Innovation: A product alteration that allows improved performance and benefits without changing either consumption patterns or behavior. The product's general appearance and basic performance do not functionally change. Examples include fluoride toothpaste and higher computer speeds.
Convergent Thinking: A technique generally performed late in the initial phase of idea generation to help funnel the high volume of ideas created through divergent thinking into a small group or single idea on which more effort and analysis will be focused.
Cooperation (Team Cooperation): The extent to which team members actively work together in reaching team level objectives.
Core Benefit Proposition (CBP): The central benefit or purpose for which a consumer buys a product. The CBP may come either from the physical good or service, or it may come from augmented dimensions of the product. (see also Value Proposition) (See Chapter 3 of The PDMA ToolBook 1st Edition.)
Core Competence: That capability at which a company does better than other firms, which provides them with a distinctive competitive advantage and contributes to acquiring and retaining customers. Something that a firm does better than other firms. The purest definition adds "and is also the lowest cost provider."
Corporate Culture: The "feel" of an organization. Culture arises from the belief system through which an organization operates. Corporate cultures are variously described as being authoritative, bureaucratic, and entrepreneurial. The firm's culture frequently impacts the organizational appropriateness for getting things done.
Corporate strategy: The overarching strategy of a diversified organization. It answers the questions of “in which businesses should we compete?” and “how does bringing in these businesses create synergy and /or add to the competitive advantage of the organization as a whole?”
Creativity: "An arbitrary harmony, an expected astonishment, a habitual revelation, a familiar surprise, a generous selfishness, an unexpected certainty, a formable stubbornness, a vital triviality, a disciplined freedom, an intoxicating steadiness, a repeated initiation, a difficult delight, a predictable gamble, an ephemeral solidity, a unifying difference, a demanding satisfier, a miraculous expectation, and accustomed amazement." (George M. Prince, The Practice of Creativity, 1970) Creativity is the ability to produce work that is both novel and appropriate.
Criteria: Statements of standards used by decision-makers at decision gates. The dimensions of performance necessary to achieve or surpass for product development projects to continue in development. In the aggregate, these criteria reflect a business unit’s new product strategy. (See Chapters 21 and 29 of The PDMA ToolBook 2nd Edition.)
Critical Path: The set of interrelated activities that must be completed for the project to be finished successfully can be mapped into a chart showing how long each task takes, and which tasks cannot be started before which other tasks are completed. The critical path is the set of linkages through the chart that is the longest. It determines how long a project will take.
Critical Path Scheduling: A project management technique, frequently incorporated into various software programs, which puts all important steps of a given new product project into a sequential network based on task interdependencies.
Critical Success Factors: Those critical few factors that are necessary for, but don't guarantee, commercial success. (See Chapter 1 of The PDMA HandBook 2nd Edition).
Cross-Functional Team: A team consisting of representatives from the various functions involved in product development, usually including members from all key functions required to deliver a successful product, typically including marketing, engineering, manufacturing/operations, finance, purchasing, customer support, and quality. The team is empowered by the departments to represent each function's perspective in the development process. (See Chapters 9 and 10 in The PDMA HandBook 2nd Edition and Chapter 6 in The PDMA ToolBook 1.)
Crossing the Chasm: Making the transition to a mainstream market from an early market dominated by a few visionary customers (sometimes also called innovators or lead adopters). This concept typically applies to the adoption of new, market creating technology-based products and services.
Crowdsourcing: described as a collection of tools for obtaining information or input into a particular task or project by enlisting the services of a number of people, either paid or unpaid, typically via the Internet
Culture: is defined as the shared beliefs, core values, assumptions, and expectations of people in the organization.
Customer: One who purchases or uses your firm's products or services.
Customer Needs: Problems to be solved. These needs, either expressed or yet-to-be articulated, provide new product development opportunities for the firm. (See Chapter 14 in The PDMA HandBook 2nd Edition.)
Customer Site Visits: A qualitative market research technique for uncovering customer needs. The method involves going to a customer's work site, watching as a person performs functions associated with the customer needs your firm wants to solve, and then debriefing that person about what they did, why they did those things, the problems encountered as they were trying to perform the function, and what worked well. (See Chapters 15 and 16 of The PDMA HandBook 2nd Edition.)
Cycle Time: The length of time for any operation, from start to completion. In the new product development sense, it is the length of time to develop a new product from an early initial idea for a new product to initial market sales. Precise definitions of the start and end point vary from one company to another, and may vary from one project to another within the company. (See Chapter 12 of The PDMA HandBook 2nd Edition.)
Dashboard: A typically colored graphical presentation of a project's status or a portfolio's status by project resembling a vehicle's dashboard. Typically, red is used to flag urgent problems, yellow to flag impending problems, and green to signal on projects on track.
Data: Measurements taken at the source of a business process.
Database: An electronic gathering of information organized in some way to make it easy to search, discover, analyze, and manipulate.
Decision Tree: A diagram used for making decisions in business or computer programming. The "branches" of the tree diagram represent choices with associated risk s, costs, results, and outcome probabilities. By calculating outcomes (profits) for each of the branches, the best decision for the firm can be determined.
Decline Stage: The fourth and last stage of the product life cycle. Entry into this stage is generally caused by technology advancements, consumer or user preference changes, global competition or environmental or regulatory changes. (See Chapter 34 of The PDMA HandBook 2nd Edition).
Defenders: Firms that stake out a product turf and protect it by whatever means, not necessarily through developing new products.
Deliverable: The output (such as test reports, regulatory approvals, working prototypes or marketing research reports) that shows a project has achieved a result. Deliverables may be specified for the commercial launch of the product or at the end of a development stage.
Delphi Processes: A technique that uses iterative rounds of consensus development across a group of experts to arrive at a forecast of the most probable outcome for some future state.
Demographic: The statistical description of a human population. Characteristics included in the description may include gender, age, education level, and marital status, as well as various behavioral and psychological characteristics.
Derivative projects: spin-offs from other existing products or platforms. They may fill a gap in an existing product line; offer more cost-competitive manufacturing; or offer enhancements and features based on core organization technology. Generally, they are relatively low risk
Design for the Environment (DFE): The systematic consideration of environmental safety and health issues over the product's projected life cycle in the design and development process.
Design for Excellence (DFX): The systematic consideration of ALL relevant life cycle factors, such as manufacturability, reliability, maintainability, affordability, testability, etc., in the design and development process.
Design for Maintainability (DFMt): The systematic consideration of maintainability issues over the product’s projected life cycle in the design and development process.
Design for Manufacturability (DFM): The systematic consideration of manufacturing issues in the design and development process, facilitating the fabrication of the product's components and their assembly into the overall product.
Design for six sigma:the aim of DFSS is to create designs that are resource efficient, capable of exceptionally high yields, and are robust to process variations
Design specifications: where the concept statement provides a qualitative presentation of the product concept’s benefits and features, the product design specifications provide the quantitative basis for further design and manufacture.
Design thinking: a creative solving approach – or more completely, a systematic and collaborative approach to identify and creatively solve problems”
Design Validation: Product tests to ensure that the product or service conforms to defined user needs and requirements. These may be performed on working prototypes or using computer simulations of the finished product.
Development: The functional part of the organization responsible for converting product requirements into a working product. Also, a phrase in the overall concept to market cycle where the new product or service is developed for the first time.
Development Teams: teams formed to take one or more new products from concept through development, testing and launch.
Discontinuous Innovation: Previously unknown products that establish new consumption patterns and behavior changes. Examples include microwave ovens and the cellular phones.
Discounted Cash-Flow (DCF) Analysis: One method for providing an estimate of the current value of future incomes and expenses projected for a project. Future cash flows for a number of years are estimated for the project, and then discounted back to the present using forecast interest rates.
Dispersed Teams: Product development teams that have members working at different locations, across time zones, and perhaps even in different countries.
Disruptive innovation:Requires a new business model but not necessarily new technology. So, for example, Google’s Android operating system potentially disrupts companies like Apple
Distribution (physical and channels): The method and partners used to get the product (or service) from where it is produced to where the end user can buy it.
Divergent Thinking: Technique performed early in the initial phase of idea generation that expands thinking processes to generate, record and recall a high volume of new or interesting ideas.
Early Adopters: For new products, these are customers who, relying on their own intuition and vision, buy into new product concepts very early in the life cycle. For new processes, these are organizational entities that were willing to try out new processes rather than just maintaining the old.
Enhanced New Product: A form of derivative product. Enhanced products include additional features not previously found on the base platform, which provide increased value to consumers.
Entrepreneur: A person who initiates, organizes, operates, assumes the risk and reaps the potential reward for a new business venture.
Ethnography: A descriptive, qualitative market research methodology for studying the customer in relation to his or her environment. Researchers spend time in the field observing customers and their environment to acquire a deep understanding of the lifestyles or cultures as a basis for better understanding their needs and problems. (See Customer Site Visits and Chapter 15 in The PDMA HandBook 2nd Edition.)
Factor analysis: a process in which the values of observed data are expressed as functions of a number of possible causes in order to find which are the most important.
Failure Rate: The percentage of a firm's new products that make it to full market commercialization, but which fail to achieve the objectives set for them.
Feasibility analysis: the process of analyzing the likely success of a project or a new product
Feature: The solution to a consumer need or problem. Features provide benefits to consumers. The handle (feature) allows a laptop computer to be carried easily (benefit). Usually any one of several different features will be chosen to meet a customer need. For example, a carrying case with shoulder straps is another feature that allows a laptop computer to be carried easily.
Feature Creep: The tendency for designers or engineers to add more capability, functions and features to a product as development proceeds than were originally intended. These additions frequently cause schedule slip, development cost increases, and product cost increases.
Feature Roadmap: The evolution over time of the performance attributes associated with a product. Defines the specific features associated with each iteration/generation of a product over its lifetime, grouped into releases (sets of features that are commercialized). See also, "Product Life-Cycle Management" and "Cadence Plans".
Field Testing: Product use testing with users from the target market in the actual context in which the product will be used.
Financial Success: The extent to which a new product meets its profit, margin, and return on investment goals.
First-to-Market: The first product to create a new product category or a substantial subdivision of a category.
Focus Groups: A qualitative market research technique where 8 to 12 market participants are gathered in one room for a discussion under the leadership of a trained moderator. Discussion focuses on a consumer problem, product, or potential solution to a problem. The results of these discussions are not projectable to the general market.
Forecast: A prediction, over some defined time, of the success or failure of implementing a business plan's decisions derived from an existing strategy. (See Chapter 23 of The PDMA HandBook 2nd Edition.)
Forming: term using for the first stage in team formation where most team members are positive and polite. Some are anxious, as they haven’t fully understood what the team will do.
Function: (1) An abstracted description of work that a product must perform to meet customer needs. A function is something the product or service must do. (2) Term describing an internal group within which resides a basic business capability such as engineering.
Functional team: the project is divided into functional components with each component assigned to its own appropriate functional manager. Coordination is either handled by the functional manager or by senior management.
Fuzzy Front End: The messy "getting started" period of product development, when the product concept is still very fuzzy. Preceding the more formal product development process, it generally consists of three tasks: strategic planning, concept generation, and, especially, pre-technical evaluation. These activities are often chaotic, unpredictable, and unstructured. In comparison, the subsequent new product development process is typically structured, predictable, and formal, with prescribed sets of activities, questions to be answered, and decisions to be made. (See Chapter 6 of The PDMA HandBook 2nd Edition.)
Gamma Test: A product use test in which the developers measure the extent to which the item meets the needs of the target customers, solves the problems(s) targeted during development, and leaves the customer satisfied.
Gantt Chart: A horizontal bar chart used in project scheduling and management that shows the start date, end date and duration of tasks within the project.
Gap Analysis: The difference between projected outcomes and desired outcomes. In product development, the gap is frequently measured as the difference between expected and desired revenues or profits from currently planned new products if the corporation is to meet its objectives.
Gate: The point at which a management decision is made to allow the product development project to proceed to the next stage, to recycle back into the current stage to better complete some of the tasks, or to terminate. The number of gates varies by company. (See Chapter 21 in The PDMA HandBook 2nd Edition).
Gatekeepers: The group of managers who serve as advisors, decision-makers and investors in a Stage-Gate™ process. Using established business criteria, this multifunctional group reviews new product opportunities and project progress, and allocates resources accordingly at each gate. This group is also commonly called a Product Approval Committee or Portfolio Management Team.
Greenwashing: when a company or organization spends more time and money claiming to be “green” through advertising and marketing than actually implementing business practices that minimize environmental impact.
Growth Stage: The second stage of the product life cycle. This stage is marked by a rapid surge in sales and market acceptance for the good or service. Products that reach the growth stage have successfully "crossed the chasm."
Hurdle Rate: The minimum return on investment or internal rate of return percentage a new product must meet or exceed as it goes through development.
Idea Generation (Ideation): All of those activities and processes that lead to creating broad sets of solutions to consumer problems. These techniques may be used in the early stages of product development to generate initial product concepts, in the intermediate stages for overcoming implementation issues, in the later stages for planning launch and in the post-mortem stage to better understand success and failure in the marketplace. (See Chapter 17 in The PDMA HandBook 2nd Edition.)
Ideation: The creative process of generating, developing, and communicating new ideas where an idea is a basic element of thought that can be either be visual, concrete or abstract.
Implementation Team: A team that converts the concepts and good intentions of the "should-be" process into practical reality.
Implicit Product Requirement: What the customer expects in a product, but does not ask for, and may not even be able to articulate.
Incremental Improvement: A small change made to an existing product that serves to keep the product fresh in the eyes of customers.
Information: Knowledge and insight, often gained by examining data.
Initial Screening: The first decision to spend resources (time or money) on a project. The project is born at this point. Sometimes called "idea screening."
In-licensed: The acquisition from external sources of novel product concepts or technologies for inclusion in the aggregate NPD portfolio.
Innovation: A new idea, method, or device. The act of creating a new product or process. The act includes invention as well as the work required to bring an idea or concept into final form.
Innovation-Based Culture: a corporate culture where senior management teams and employees work habitually to reinforce best practices that systematically and continuously churn out valued new products to customers.
Innovation Steering Committee: the senior management team or a subset of it responsible for gaining alignment on the strategic and financial goals for new product development, as well as setting expectations for Portfolio and Development Teams.
Innovation strategy: provides the goals, direction and framework for innovation across the organization. Individual business units and functions may have their own strategies to achieve specific innovation goals, but it is imperative that these individual strategies are tightly connected with the over-arching organizational innovation strategy.
Integrated Product Development (IPD): A philosophy that systematically employs an integrated team effort from multiple functional disciplines to develop effectively and efficiently new products that satisfy customer needs.
Intellectual Property (IP): Information, including proprietary knowledge, technical competencies, and design information, which provides commercially exploitable competitive benefit to an organization.
Internal Rate of Return (IRR): The discount rate at which the present value of the future cash flows of an investment equals the cost of the investment. The discount rate with a net present value of 0.
Intrapreneur: The large-firm equivalent of an entrepreneur. Someone who develops new enterprises within the confines of a large corporation.
Introduction Stage: The first stage of a product's commercial launch and the product life cycle. This stage is generally seen as the point of market entry, user trial, and product adoption.
ISO-9000: A set of 5 auditable standards of the International Organization for Standardization that establishes the role of a quality system in a company and which is used to assess whether the company can be certified as compliant to the standards. ISO-9001 deals specifically with new products.
Journal of Product Innovation Management: The premier academic journal in the field of innovation, new product development and management of technology. The Journal, which is owned by the PDMA, is dedicated to the advancement of management practice in all of the functions involved in the total process of product innovation. Its purpose is to bring to managers and students of product innovation the theoretical structures and the practical techniques that will enable them to operate at the cutting edge of effective management practice. Web site: www.pdma.org/journal.
Lead Users: Users for whom finding a solution to one of their consumer needs is so important that they have modified a current product or invented a new product to solve the need themselves because they have not found a supplier who can solve it for them. When these consumers' needs are portents of needs that the center of the market will have in the future, their solutions are new product opportunities.
Lean product development (LPD): the lean approach to meet the challenges of product development. Lean product development is founded on the fundamental lean methodology initially developed by Toyota (the Toyota Production System TPS).
Learning Organization: An organization that continuously tests and updates the experience of those in the organization, and transforms that experience into improved work processes and knowledge that is accessible to the whole organization and relevant to its core purpose. (see Continuous Learning Activity)
Life cycle assessment: A scientific method for analysis of the environmental impacts (CO2 footprint, Water footprint, etc.)
Lightweight Team: New product team charged with successfully developing a product concept and delivering to the marketplace. Resources are, for the most part, not dedicated and the team depends on the technical functions for resources necessary to get the work accomplished.
Line Extension: A form of derivative product that adds or modifies features without significantly changing the product functionality.
Manufacturing Design: The process of determining the manufacturing process that will be used to make a new product. (See Chapter 23 of The PDMA HandBook 1st Edition.)
Manufacturing Test Specification and Procedure: Documents prepared by development and manufacturing personnel that describe the performance specifications of a component, subassembly, or system that will be met during the manufacturing process, and that describe the procedure by which the specifications will be assessed.
Market Research: Information about the firm's customers, competitors, or markets. Information may be from secondary sources (already published and publicly available) or primary sources (from customers themselves). Market research may be qualitative in nature, or quantitative (see entries for these two types of market research).
Market Segmentation: Market segmentation is defined as a framework by which to sub-divide a larger heterogeneous market into smaller, more homogeneous parts. These segments can be defined in many different ways: demographic (men vs. women, young vs. old, or richer vs. poorer), behavioral (those who buy on the phone vs. the internet vs. retail, or those who pay with cash vs. credit cards), or attitudinal (those who believe that store brands are just as good as national brands vs. those who don't). There are many analytical techniques used to identify segments such as cluster analysis, factor analysis, or discriminate analysis. But the most common method is simply to hypothesize a potential segmentation definition and then to test whether any differences that are observed are statistically significant (See Chapter 13 of The PDMA HandBook 2nd Edition).
Market Share: A company’s sales in a product area as a percent of the total market sales in that area.
Market Testing: The product development stage when the new product and its marketing plan are tested together. A market test simulates the eventual marketing mix and takes many different forms, only one of which bears the name test market.
Marketing mix: comprises the basic tools that are available to market a product. The market mix is often referred to as the 4 Ps – Product, Price, Promotion and Place.
Marketing strategy: a process or model to allow an organization to focus limited resources on the best opportunities to increase sales and thereby achieve a unique competitive advantage
Maturity Stage: The third stage of the product life cycle. This is the stage where sales begin to level off due to market saturation. It is a time when heavy competition, alternative product options, and (possibly) changing buyer or user preferences start to make it difficult to achieve profitability.
Metrics: A set of measurements to track product development and allow a firm to measure the impact of process improvements over time. These measures generally vary by firm but may include measures characterizing both aspects of the process, such as time to market, and duration of particular process stages, as well as outcomes from product development such as the number of products commercialized per year and percentage of sales due to new products.
Mindmapping: A graphical technique for imagining connections between various pieces of information or ideas. The participant starts with a key phrase or word in the middle of a page then works out from this point to connect to new ideas in multiple direction – building a web of relationships.
Mission: The statement of an organization's creed, philosophy, purpose, business principles, and corporate beliefs. The purpose of the mission is to focus the energy and resources of the organization
Multifunctional Team: A group of individuals brought together from the different functional areas of a business to work on a problem or process that requires the knowledge, training and capabilities across the areas to successfully complete the work. (See Chapters 9 and 10 in The PDMA HandBook 2nd Edition and Chapter 6 in The PDMA ToolBook 1.) (See also "Cross-Functional Team".)
Multidimensional scaling (MDS): is a means of visualizing the level of similarity of individual cases of a dataset (for example products or markets)
Multivariate analysis: explores the association between one outcome variable (referred to as the dependent variable) and one or more predictor variables (referred to as independent variables).
Net Present Value (NPV): the difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of a projected investment or project.
Network Diagram: A graphical diagram with boxes connected by lines that shows the sequence of development activities and the interrelationship of each task with another. Often used in conjunction with a Gantt Chart.
New Product: A term of many opinions and practices, but most generally defined as a product (either a good or service) new to the firm marketing it. Excludes products that are only changed in promotion.
New Product Development (NPD): The overall process of strategy, organization, concept generation, product and marketing plan creation and evaluation, and commercialization of a new product. Also frequently referred to just as "product development."
New Product Introduction (NPI): The launch or commercialization of a new product into the marketplace. Takes place at the end of a successful product development project. (See Chapter 30 of The PDMA HandBook 2nd Edition.)
New Product Development Process (NPD Process): A disciplined and defined set of tasks and steps that describe the normal means by which a company repetitively converts embryonic ideas into salable products or services. (See Chapters 4 and 5 of The PDMA HandBook 2nd Edition.)
New Product Development Professional (NPDP): A New Product Development Professional is certified by the PDMA as having mastered the body of knowledge in new product development, as proven by performance on the Certification test. To qualify for the NPDP certification examination, a candidate must hold a bachelor's or higher university degree (or an equivalent degree) from an accredited institution and have spent a minimum of two years working in the new product development field.
New-to-the-World Product: A good or service that has never before been available to either consumers or producers. The automobile was new-to-the-world when it was introduced, as were microwave ovens and pet rocks.
Non-Product Advantage: Elements of the marketing mix that create competitive advantage other than the product itself. These elements can include marketing communications, distribution, company reputation, technical support, and associated services.
Norming: the third stage of team formation where the team moves into the norming stage. This is when people start to resolve their differences, appreciate colleagues’ strengths, and respect the leader’s authority.
Operations: A term that includes manufacturing but is much broader, usually including procurement, physical distribution, and, for services, management of the offices or other areas where the services are provided.
Opportunity: A business or technology gap that a company or individual realizes, by design or accident, that exists between the current situation and an envisioned future in order to capture competitive advantage, respond to a threat, solve a problem or ameliorate a difficulty.
Organizational identity: Fundamental to the long-term success of an organization is a clear definition and understanding of what the organization stands for, why does it exist.
Outsourcing: The process of procuring a good or service from someone else, rather than the firm producing it themselves.
Outstanding Corporate Innovator Award: An annual PDMA award given to firms acknowledged through a formal vetting process as being outstanding innovators. The basic requirements for receiving this award, which is given yearly by the PDMA, are: 1. Sustained success in launching new products over a five-year time frame; 2. Significant company growth from new product success; 3. A defined new product development process, that can be described to others; 4. Distinctive innovative characteristics and intangibles.
Payback: The time, usually in years, from some point in the development process until the commercialized product or service has recovered its costs of development and marketing. While some firms take the point of full-scale market introduction of a new product as the starting point, others begin the clock at the start of development expense.
Perceptual Mapping: A quantitative market research tool used to understand how customers think of current and future products. Perceptual maps are visual representations of the positions that sets of products hold in consumers' minds.
Performance Measurement System: The system that enables the firm to monitor the relevant performance indicators of new products in the appropriate time frame.
Performance metrics: a set of measurements to track product development and to allow an organization to measure the impact of process improvement over time. These measures generally vary by organization but may include measures characterizing both aspects of process, such as time to market and duration of particular process stages, as well as outcomes from product development such as the number of products commercialized per year and percentage sales due to new products.
Performing: the fourth stage of team formation where the team reaches the performing stage when hard work leads, without friction, to the achievement of team’s goals. The team structures and processes, established by the leader, are working well.
PERT (Program Evaluation and Review Technique): An event-oriented network analysis technique used to estimate project duration when there is a high degree of uncertainty in estimates of duration times for individual activities.
PESTLE: A structured tool based on the analysis of Political, Economic, Social, Technological, Legal and Environmental factors. It is particularly useful as a strategic framework for seeking a better understanding of trends in factors that will directly influence the future of an organization – such as demographics, political barriers, disruptive technologies, competitive pressures, etc.
Phase Review Process: A staged product development process in which first one function completes a set of tasks, then passes the information they generated sequentially to another function which in turn completes the next set of tasks and then passes everything along to the next function. Multifunctional teamwork is largely absent in these types of product development processes, which may also be called baton-passing processes. Most firms have moved from these processes to Stage-Gate processes using multifunctional teams.
Pipeline (product pipeline): The scheduled stream of products in development for release to the market.
Pipeline Management: A process that integrates product strategy, project management, and functional management to continually optimize the cross-project management of all development-related activities. (See Chapter 5 in The PDMA HandBook 1st Edition and Chapter 3 in The PDMA HandBook 2nd Edition.)
Platform Product: The design and components that are shared by a set of products in a product family. From this platform, numerous derivative products can be designed. (See also product platform)
Platform projects: produce a set of subsystems and interfaces that form a common structure, from which a stream of derivative products can be efficiently developed and produced.
Portfolio: Commonly referred to as a set of projects or products that a company is investing in and making strategic trade-offs against. (See also project portfolio and product portfolio)
Portfolio Criteria: The set of criteria against which the business judges both proposed and currently active product development projects to create a balanced and diverse mix of ongoing efforts.
Portfolio Management: A business process by which a business unit decides on the mix of active projects, staffing and dollar budget allocated to each project currently being undertaken. See also pipeline management. (See Chapter 13 of The PDMA ToolBook 1 and Chapter 3 of The PDMA HandBook 2nd Edition.)
Portfolio Rollout Scenarios: hypothetical illustrations of the number and magnitude of new products that would need to be launched over a certain time frame to reach the desired financial goals; accounts for success/failure rates and considers company and competitive benchmarks.
Primary market research: is defined as original research conducted by you (or someone you hire) to collect data specifically for your current objective
Process Champion: The person responsible for the daily promotion of and encouragement to use a formal business process throughout the organization. They are also responsible for the ongoing training, innovation input and continuous improvement of the process.
Process Managers: The operational managers responsible for ensuring the orderly and timely flow of ideas and projects through the process.
Process Owner: The executive manager responsible for the strategic results of the NPD process. This includes process throughput, quality of output, and participation within the organization. (See Section 3 of The PDMA ToolBook for 4 tools that process owners might find useful, and see Chapter 5 of The PDMA HandBook.)
Product: Term used to describe all goods, services, and knowledge sold. Products are bundles of attributes (features, functions, benefits, and uses) and can be either tangible, as in the case of physical goods, or intangible, as in the case of those associated with service benefits, or can be a combination of the two.
Product and Process Performance Success: The extent to which a new product meets its technical performance and product development process performance criteria.
Product Architecture: The way in which the functional elements are assigned to the physical chunks of a product and the way in which those physical chunks interact to perform the overall function of the product. (See Chapter 16 of The PDMA HandBook 1st Edition.)
Product backlog: A basis of agile product development. The requirements for a system, expressed as a prioritized list of product backlog items. These include both functional and non-functional customer requirements, as well as technical team-generated requirements
Project Decision Making & Reviews: A series of Go/No-Go decisions about the viability of a project that ensure the completion of the project provides a product that meets the marketing and financial objectives of the company. This includes a systematic review of the viability of a project as it moves through the various phase stage gates in the development process. These periodic checks validate that the project is still close enough to the original plan to deliver against the business case (See Chapters 21 and 22 of The PDMA HandBook 2nd Edition).
Product design specifications: include all necessary drawings, dimensions, environmental factors, ergonomic factors, aesthetic factors, cost, maintenance that will be needed, quality, safety, documentation and description. It also tells specific examples of how the design of the project should be executed, helping others work properly
Product Definition: Defines the product, including the target market, product concept, benefits to be delivered, positioning strategy, price point, and even product requirements and design specifications.
Product Development: The overall process of strategy, organization, concept generation, product and marketing plan creation and evaluation, and commercialization of a new product. (See Chapters 19 - 22 of The PDMA HandBook 1st Edition.)
Product Development & Management Association (PDMA): A not-for-profit professional organization whose purpose is to seek out, develop, organize and disseminate leading edge information on the theory and practice of product development and product development processes. The PDMA uses local, national, and international meetings and conferences, educational workshops, a quarterly magazine (Visions), a bi-monthly scholarly journal (Journal of Product Innovation Management), research proposal and dissertation proposal competitions, The PDMA HandBook of New Product Development 1st and 2nd Editions, and The PDMA ToolBook 1 for New Product Development to achieve its purposes. The association also manages the certification process for New Product Development Professionals. Web site: www.pdma.org.
Product Development Portfolio: The collection of new product concepts and projects that are within the firm's ability to develop, are most attractive to the firm’s customers and deliver short- and long-term corporate objectives, spreading risk and diversifying investments. (See Chapter 13 in The PDMA ToolBook 1 and Chapter 3 of Chapters 21 and 22 of The PDMA HandBook 2nd Edition.)
Product Development Process: A disciplined and defined set of tasks, steps, and phases that describe the normal means by which a company repetitively converts embryonic ideas into salable products or services. (See Chapters 4 and 5 of The PDMA HandBook 2nd Edition.)
Product development Team: That group of persons who participate in the product development project. Frequently each team member represents a function, department, or specialty. Together they represent the full set of capabilities needed to complete the project. (See Chapter 9 in The PDMA HandBook 2nd Edition and Chapter 6 in The PDMA ToolBook 1.)
Product Discontinuation: A product or service that is withdrawn or removed from the market because it no longer provides an economic, strategic, or competitive advantage in the firm’s portfolio of offerings. (See Chapter 28 of The PDMA HandBook 1st Edition.)
Product Failure: A product development project that does not meet the objective of its charter or marketplace.
Product Family: The set of products that have been derived from a common product platform. Members of a product family normally have many common parts and assemblies.
Product Innovation Charter (PIC): A critical strategic document, the Product Innovation Charter (PIC) is the heart of any organized effort to commercialize a new product. It contains the reasons the project has been started, the goals, objectives, guidelines, and boundaries of the project. It is the "who, what, where, when, and why" of the product development project. In the Discovery phase, the charter may contain assumptions about market preferences, customer needs, and sales and profit potential. As the project enters the Development phase, these assumptions are challenged through prototype development and in-market testing. While business needs and market conditions can and will change as the project progresses, one must resist the strong tendency for projects to wander off as the development work takes place. The PIC must be constantly referenced during the Development phase to make sure it is still valid, that the project is still within the defined arena, and that the opportunity envisioned in the Discovery phase still exists.
Product Life Cycle: The four stages that a new product is thought to go through from birth to death: introduction, growth, maturity, and decline. Controversy surrounds whether products go through this cycle in any predictable way.
Product Life-Cycle Management: Changing the features and benefits of the product, elements of the marketing mix, and manufacturing operations over time to maximize the profits obtainable from the product over its lifecycle. (See Chapter 33 of The PDMA HandBook 2nd Edition).
Product Line: A group of products marketed by an organization to one general market. The products have some characteristics, customers, and uses in common and may also share technologies, distribution channels, prices, services, and other elements of the marketing mix.
Product Management: Ensuring over time that a product or service profitably meets the needs of customers by continually monitoring and modifying the elements of the marketing mix, including: the product and its features, the communications strategy, distribution channels and price.
Product Manager: The person assigned responsibility for overseeing all of the various activities that concern a particular product. Sometimes called a brand manager in consumer packaged goods firms.
Product owner: Commonly used in agile product development. The product owner is the single person who must have final authority representing the customer’s interests in backlog prioritization and requirements questions.
Product Platforms: Underlying structures or basic architectures that are common across a group of products or that will be the basis of a series of products commercialized over a number of years.
Product Portfolio: The set of products and product lines the firm has placed in the market. (See Chapter 13 of The PDMA ToolBook 1.)
Product Positioning: how a product will be marketed to customers. The product positioning refers to the set of features and value that is valued by (and therefore defined by) the target customer audience, relative to competing products.
Product Rejuvenation: The process by which a mature or declining product is altered, updated, repackaged or redesigned to lengthen the product life cycle and in turn extend sales demand.
Product Requirements Document: The contract between, at a minimum, marketing and development, describing completely and unambiguously the necessary attributes (functional performance requirements) of the product to be developed, as well as information about how achievement of the attributes will be verified (i.e. through testing).
Product Superiority: Differentiation of a firm's products from those of competitors, achieved by providing consumers with greater benefits and value. This is one of the critical success factors in commercializing new products.
Program Manager: The organizational leader charged with responsibility of executing a portfolio of NPD projects. (See Section 4 of The PDMA ToolBook 1 for 4 product development tools a program manager may find helpful.)
Project Leader: The person responsible for managing an individual new product development project through to completion. He or she is responsible for ensuring that milestones and deliverables are achieved and that resources are utilized effectively. See also Team Leader. (See Sections 1 and 2 of The PDMA ToolBook 1 for 8 product development tools for project leaders)
Project Management: The set of people, tools, techniques, and processes used to define the project’s goal, plan all the work necessary to reach that goal, lead the project and support teams, monitor progress, and ensure that the project is completed in a satisfactory way.
Project Pipeline Management: Fine-tuning resource deployment smoothly for projects during ramp-up, ramp-down, and mid-course adjustments.
Project Plan: A formal, approved document used to guide both project execution and control. Documents planning assumptions and decisions, facilitates communication among stakeholders, and documents approved scope, cost, and schedule deadlines.
Project Portfolio: The set of projects in development at any point in time. These will vary in the extent of newness or innovativeness. (See Chapter 13 in The PDMA ToolBook 1 and Chapter 3 of The PDMA HandBook 2nd Edition.)
Project Resource Estimation: This activity provides one of the major contributions to the project cost calculation. Turning functional requirements into a realistic cost estimate is a key factor in the success of a product delivering against the business plan.
Project Sponsor: The authorization and funding source of the project. The person who defines the project goals and to whom the final results are presented. Typically, a senior manager.
Project Strategy: The goals and objectives for an individual product development project. It includes how that project fits into the firm's product portfolio, who the target market is, and what problems the product will solve for those customers. (See Chapter 2 in The PDMA HandBook 2nd Edition.)
Project Team: A multifunctional group of individuals chartered to plan and execute a new product development project.
Prospectors: Firms that lead in technology, product and market development and commercialization, even though an individual product may not lead to profits. Their general goal is to be first to market with any particular innovation.
Prototype: A physical model of the new product concept. Depending upon the purpose, prototypes may be non-working, functionally working, or both functionally and aesthetically complete.
Psychographics: Characteristics of consumers that, rather than being purely demographic, measure their attitudes, interests, opinions, and lifestyles.
Qualitative Marketing Research: Research conducted with a very small number of respondents, either in groups or individually, to gain an impression of their beliefs, motivations, perceptions and opinions. Frequently used to gather initial consumer needs and obtain initial reactions to ideas and concepts. Results are not representative of the market in general or projectable. Qualitative marketing research is used to show why people buy a particular product, whereas quantitative marketing research reveals how many people buy it. (See Chapters 14-16 of The PDMA HandBook 2nd Edition.)
Quality: The collection of attributes, which when present in a product, means a product has conformed to or exceeded customer expectations.
Quality Assurance/Compliance: Function responsible for monitoring and evaluating development policies and practices, to ensure they meet company and applicable regulatory standards.
Quality-by-Design: The process used to design quality into the product, service, or process from the inception of product development.
Quality Control Specification and Procedure: Documents that describe the specifications and the procedures by which they will be measured which a finished subassembly or system must meet before judged ready for shipment.
Quality Function Deployment (QFD): A structured method employing matrix analysis for linking what the market requires to how it will be accomplished in the development effort. This method is most frequently used during the stage of development when a multifunctional team agrees on how customer needs relate to product specifications and the features that deliver those needs. By explicitly linking these aspects of product design, QFD minimizes the possibility of omitting important design characteristics or interactions across design characteristics. QFD is also an important mechanism in promoting multifunctional teamwork. Developed and introduced by Japanese auto manufacturers, QFD is widely used in the automotive industry.
Quantitative Market Research: Consumer research, often surveys, conducted with a large enough sample of consumers to produce statistically reliable results that can be used to project outcomes to the general consumer population. Used to determine importance levels of different customer needs, performance ratings of and satisfaction with current products, probability of trial, repurchase rate, and product preferences. These techniques are used to reduce the uncertainty associated with many other aspects of product development. (See Chapter 18 of The PDMA HandBook 2nd Edition.)
Random Sample: a subset of a statistical population in which each member of the subset has an equal probability of being chosen
Reactors: Firms that have no coherent innovation strategy. They only develop new products when absolutely forced to by the competitive situation.
Reposition: To change the position of the product in the minds of customers, either on failure of the original positioning or to react to changes in the marketplace. Most frequently accomplished through changing the marketing mix rather than redeveloping the product.
Resource Matrix: An array that shows the percentage of each non-managerial person's time that is to be devoted to each of the current projects in the firm's portfolio.
Resource Plan: Detailed summary of all forms of resources required to complete a product development project, including personnel, equipment, time, and finances.
Return on Investment (ROI): A standard measure of project profitability, this is the discounted profits over the life of the project expressed as a percentage of initial investment.
Risk: An event or condition that may or may not occur, but if it does occur will impact the ability to achieve a project's objectives. In new product development, risks may take the form of market, technical, or organizational issues. For more on managing product development risks, see Chapters 8 and 15 in the PDMA ToolBook 1 and Chapter 28 in The PDMA HandBook 2nd Edition.
Risk Acceptance: An uncertain event or condition for which the project team has decided not to change the project plan. A team may be forced to accept an identified risk when they are unable to identify any other suitable response to the risk.
Risk Avoidance: Changing the project plan to eliminate a risk or to protect the project objectives from any potential impact due to the risk.
Risk Management: The process of identifying, measuring, and mitigating the business risk in a product development project.
Risk Mitigation: Actions taken to reduce the probability and/or impact of a risk to below some threshold of acceptability.
Risk Tolerance: The level of risk that a project stakeholder is willing to accept. Tolerance levels are context specific. That is, stakeholders may be willing to accept different levels of risk for different types of risk, such as risks of project delay, price realization, and technical potential.
Risk Transference: Actions taken to shift the impact of a risk and the ownership of the risk response actions to a third party.
Roadmapping: A graphical multi-step process to forecast future market and/or technology changes, and then plan the products to address these changes.
Routine innovation: Builds on an organization’s existing technological competencies and fits with its existing business models. Innovation is focused on feature improvement and new versions or models.
Sales wave research: customers who are initially offered the product at no cost are re-offered it, or a competitor’s product, at slightly reduced prices. The offer may be made as many as 5 times. The number of customers continuing to select the product and their level of satisfaction is recorded
S-Curve (Technology S-Curve): Technology performance improvements tend to progress over time in the form of an "S" curve. When first invented, technology performance improves slowly and incrementally. Then, as experience with a new technology accrues, the rate of performance increase grows and technology performance increases by leaps and bounds. Finally, some of the performance limits of a new technology start to be reached and performance growth slows. At some point, the limits of the technology may be reached and further improvements are not made. Frequently, the technology then becomes vulnerable to a substitute technology that is capable of making additional performance improvements. The substitute technology is usually on the lower, slower portion of its own "S" curve and quickly overtakes the original technology when performance accelerates during the middle (vertical) portion of the "S".
Scamper: an ideation too that utilizes actions verbs as stimuli. S – Substitute; C – Combine; A – Adapt; M – Modify; P – Put to another use; E – Eliminate; R – Reverse
Scenario Analysis: A tool for envisioning alternate futures so that a strategy can be formulated to respond to future opportunities and challenges. (See Chapter 16 of the PDMA ToolBook 1.)
Scrum: A term used in agile product development. Arguably it is the most popular framework for implementing agile. With scrum, the product is built in a series of fixed-length iterations giving teams a framework for shipping software on a regular cadence
Scrum-master: Commonly used in agile product development. The facilitator for the team and product owner. Rather than manage the team, the ScrumMaster works to assist both the team and the product owner
Scrum Team: Commonly used in agile product development. Usually made up of seven, plus or minus two, members. The team usually comprises a mix of functions or disciplines required to successfully complete the sprint goals (cross-functional team).
Secondary market research: is defined as research that involves searching for existing data that was originally collected by someone else.
Segmentation: The process of dividing a large and heterogeneous market into more homogeneous subgroups. Each subgroup, or segment, holds similar views about the product, and values, purchases, and uses the product in similar ways. (See Chapters 3 and 4 of The PDMA HandBook)
Services: Products, such as an airline flight or insurance policy, which are intangible or at least substantially so. If totally intangible, they are exchanged directly from producer to user, cannot be transported or stored and are instantly perishable. Service delivery usually involves customer participation in some important way. Services cannot be sold in the sense of ownership transfer, and they have no title of ownership.
Simulated Test Market: A form of quantitative market research and pre-test marketing in which consumers are exposed to new products and to their claims in a staged advertising and purchase situation. Output of the test is an early forecast of expected sales or market share, based on mathematical forecasting models, management assumptions, and input of specific measurements from the simulation.
Six thinking hats: A tool developed by Edward de Bono which encourages team members to separate thinking into six clear functions and roles. Each role is identified with a color-symbolic “thinking hat.”
Social media: computer-mediated tools that allow people, companies and other organizations to create, share, or exchange information, ideas, and pictures/videos in virtual communities and networks.
Specification: A detailed description of the features and performance characteristics of a product. For example, a laptop computer’s specification may read as a 90 megahertz Pentium, with 16 megabytes of RAM and 720 megabytes of hard disk space, 3.5 hours of battery life, weight of 4.5 pounds, with an active matrix 256 color screen.
Sprint: A term used in agile product development. A set period of time during which specific work has to be completed and made ready for review
Stage: One group of concurrently accomplished tasks, with specified outcomes and deliverables, of the overall product development process.
Stage-Gate Process: A widely employed product development process that divides the effort into distinct time-sequenced stages separated by management decision gates. Multifunctional teams must successfully complete a prescribed set of related cross-functional tasks in each stage prior to obtaining management approval to proceed to the next stage of product development. The framework of the Stage-Gate™ process includes work-flow and decision-flow paths and defines the supporting systems and practices necessary to ensure the process's ongoing smooth operation.
Staged Product Development Activity: The set of product development tasks commencing when it is believed there are no major unknowns and that result in initial production of salable product, carried out in stages.
Star products: products that command a significant market share in a growing overall market.
Storming: the second stage in team formation where people start to push against the boundaries established. This is where many teams fail. Storming often starts where there is a conflict between team members’ natural working styles.
Storyboarding: Focuses on the development of a story, possibly about a consumer’s use of a product, to better understand the problems or issue that might lead to specific product design attributes
Strategic Balance: Balancing the portfolio of development projects along one or more of many dimensions such as focus versus diversification, short versus long term, high versus low risk, extending platforms versus development of new platforms.
Strategic fit. Ensure projects are consistent with the articulated strategy. For example, if certain technologies or markets are specified as areas of strategic focus do the projects fit into these areas?
Strategic priorities. Ensures the investment across the portfolio reflect the strategic priorities? For example, if the organization is seeking technology leadership then the balance of projects in the portfolio should reflect this focus.
Strategic Partnering: An alliance or partnership between two firms (frequently one large corporation and one smaller, entrepreneurial firm) to create a specialized new product. Typically, the large firm supplies capital, and the necessary product development, marketing, manufacturing, and distribution capabilities, while the small firm supplies specialized technical or creative expertise.
Stratified sampling: the population is divided into strata according to some variables that are thought to be related to the variables that we are interested in. A sample is taken from each stratum.
Support projects: can be incremental improvements in existing products or improvements in manufacturing efficiency of an existing product. Generally, they are low risk.
Sustainable development: development which meets the needs of current generations without compromising the ability of future generations to meet their own needs
Sustainable innovation: The process in which new products or services are developed and brought to commercialization and, in which the characteristics of sustainable development are respected from the economical, environmental and social angle, in the sourcing, production, use and end-of-service stage of the product life cycle.
Sustaining innovation: does not create new markets or value networks but only develops existing ones with better value, allowing the companies to compete against each other's sustaining improvements.
SWOT Analysis: "Strengths, Weaknesses, Opportunities, and Threats" Analysis. A SWOT analysis evaluates a company in terms of its advantages and disadvantages versus competitors, customer requirements, and market/economic environmental conditions.
Target Market: The group of consumers or potential customers selected for marketing. This market segment is most likely to buy the products within a given category. These are sometimes called "prime prospects."
Team: defined as a small number of people with complementary skills who are committed to a common purpose, with a clear set of performance goals and approach for which they hold themselves mutually accountable
Team Leader: The person leading the new product team. Responsible for ensuring that milestones and deliverables are achieved, but may not have any authority over project participants. (See Sections 1 and 2 of The PDMA ToolBook for 8 product development tools for Team Leaders.)
Technology-Driven: A new product or new product strategy based on the strength of a technical capability. Sometimes called "solutions in search of problems."
Technology foresighting: a process for looking into the future to predict technology trends and the potential impact on the organization.
Technology Road Map: A graphic representation of technology evolution or technology plans mapped against time. It is used to guide new technology development for or technology selection in developing new products.
Technology strategy: a plan for the maintenance and development of technologies that supports the future growth of the organization and aids the achievement of its strategic goals.
Technology Transfer: The process of converting scientific findings from research laboratories into useful products by the commercial sector. May also be referred to as the process of transferring technology between alliance partners.
Test Markets: The launching of a new product into one or more limited geographic regions in a very controlled manner, and measuring consumer response to the product and its launch. When multiple geographies are used in the test, different advertising or pricing policies may be tested and the results compared.
Time to Market: The length of time it takes to develop a new product from an earl y initial idea for a new product to initial market sales. Precise definitions of the start and end point vary from one company to another, and may vary from one project to another within the company.
Top down portfolio selection: Also known as the strategic bucket method, relies on starting with strategy and placing significant emphasis on project selection according to this strategy.
Total Quality Management (TQM): A business improvement philosophy that comprehensively and continuously involves all of an organization's functions in improvement activities.
Triple constraint: the combination of the three most significant restrictions on any project: scope, schedule and cost. The triple constraint is sometimes referred to as the project management triangle or the iron triangle
Triple bottom line: reports an organization’s performance against 3 dimensions: Financial, Social, Environmental
TRIZ: The acronym for the Theory of Inventive Problem Solving, which is a Russian, systematic method of solving problems and creating multiple-alternative solutions. It is based on an analysis and codification of technology solutions from millions of patents. The method enhances creativity by getting individuals to think beyond their own experience and to reach across disciplines to solve problems using solutions from other areas of science.
User: Any person who uses a product or service to solve a problem or obtain a benefit, whether or not they purchase it. Users may consume a product, as in the case of a person using shampoo to clean their hair or eating a potato chip to assuage hunger between meals. Users may not directly consume a product, but may interact with it over a longer period of time, like a family owning a car, with multiple family members using it for many purposes over a number of years. Products also are employed in the production of other products or services, where the users may be the manufacturing personnel who operate the equipment.
Value-added: The act or process by which tangible product features or intangible service attributes are bundled, combined or packaged with other features and attributes to create a competitive advantage, reposition a product or increase sales.
Value Proposition: A short, clear, and simple statement of how and on what dimensions a product concept will deliver value to prospective customers. The essence of "value" is embedded in the tradeoff between the benefits a customer receives from a new product and the price a customer pays for it. (see Chapter 3 of the PDMA ToolBook 1).
Virtual Team: Dispersed teams that communicate and work primarily electronically may be called virtual teams.
Vision: An act of imagining, guided by both foresight and informed discernment, that reveals the possibilities as well as the practical limits in new product development. It depicts the most desirable, future state of a product or organization.
Visions: The new product development practitioner-oriented magazine of the PDMA.
Voice of the Customer (VOC): A process for eliciting needs from consumers that uses structured in-depth interviews to lead interviewees through a series of situations in which they have experienced and found solutions to the set of problems being investigated. Needs are obtained through indirect questioning by coming to understand how the consumers found ways to meet their needs, and, more important, why they chose the particular solutions they found. (See Chapter 11 of The PDMA ToolBook 1.)
Waste: Any activity that utilizes equipment, materials, parts, space, employee time, or other corporate resource beyond minimum amount required for value-added operations to ensure manufacturability. These activities could include waiting, accumulating semi-processed parts, reloading, passing materials from one hand to the other, and other nonproductive processes. The seven basic categories of waste that a business should strive to eliminate: overproduction, waiting for machines, transportation time, process time, excess inventory, excess motion, and defects.
Waterfall process: a sequential design process, used in software development processes, in which progress is seen as flowing steadily downwards (like a waterfall) through the phases of conception, initiation, analysis, design, construction, testing, production/implementation and maintenance.
Whole Product: A product definition concept that emphasizes delivering all aspects of a product which are required for it to deliver its full value. This would include training materials, support systems, cables, how to recipes, additional hardware/software, standards and procedures, implementation, applications consulting - any constitutive elements necessary to assure the customer will have a successful experience and achieve at least minimum required value from the product.
Workplan: Detailed plan for executing the project, identifying each phase of the project, the major steps associated with them, and the specific tasks to be performed along the way. Best practice workplans identify the specific functional resources assigned to each task, the planned task duration, and the dependencies between tasks. See also, "Gantt chart.
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