The PDMA Glossary for New Product Development
Notice for Glossary:
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.)
Idea Exchange: A divergent thinking technique that provides a structure for building on different ideas in a quiet, non-judgmental setting that encourages reflection.
Idea Merit Index: An internal metric used to impartially rank new product ideas.
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.
Importance Surveys: A particular type of attribute testing in which respondents are asked to evaluate how important each of the product attributes are in their choice of products or services.
Incremental Improvement: A small change made to an existing product that serves to keep the product fresh in the eyes of customers.
Incremental Innovation: An innovation that improves the conveyance of a currently delivered benefit, but produces neither a behavior change nor a change in consumption.
Individual Depth Interviews (IDI's): A qualitative market research technique in which a skilled moderator conducts an open-ended, in-depth, guided conversation with an individual respondent (as opposed to in a (focus) group format). Such an interview can be used to better understand the respondent's thought processes, motivations, current behaviors, preferences, opinions, and desires.
Industrial Design (ID): The professional service of creating and developing concepts and specifications that optimize the function, value, and appearance of products and systems for the mutual benefit of both user and manufacturer [Industrial Design Society of America]. (See Chapters 24 and 25 of The PDMA HandBook 2nd Edition.)
Information: Knowledge and insight, often gained by examining data.
Information Acceleration: A concept testing method employing virtual reality. In it, a virtual buying environment is created that simulates the information available (product, societal, political, and technological) in a real purchase situation at some time several years or more into the future.
Informed Intuition: Using the gathered experiences and knowledge of the team in a structured manner.
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."
Injection Molding: A process that utilizes melted plastics injected into steel or aluminum molds which ultimately result in finished production parts.
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 Engine: The creative activities and people that actually think of new ideas. It represents the synthesis phase when someone first recognizes that customer and market opportunities can be translated into new product ideas.
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.
Innovative Problem Solving: Methods that combine rigorous problem definition, pattern-breaking generation of ideas, and action planning that results in new, unique, and unexpected solutions.
Integrated Architecture: A product architecture in which most or all of the functional elements map into a single or very small number of chunks. It is difficult to subdivide an integrally designed product into partially-functioning components.
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.
Issue: A certainty that will affect the outcome of a project, either negatively or positively. Issues require investigation as to their potential impacts, and decisions about how to deal with them. Open issues are those for which the appropriate actions have not been resolved, while closed issues are ones that the team has dealt with successfully.
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 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.)
Life Cycle Cost: The total cost of acquiring, owning, and operating a product over its useful life. Associated costs may include: purchase price, training expenses, maintenance expenses, warrantee costs, support, disposal, and profit loss due to repair downtime.
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.
Long-term Success: The new product's performance in the long run or at some large fraction of the product's life cycle.
Maintenance Activity: That set of product development tasks aimed at solving initial market and user problems with the new product or service. (See Chapter 33 of The PDMA HandBook 2nd Edition).
Mating Part: A general reference to one of two parts that join together.
Manufacturability: The extent to which a new product can be easily and effectively manufactured at minimum cost and with maximum reliability.
Manufacturing Assembly Procedure: Procedural documents normally prepared by manufacturing personnel that describe how a component, subassembly, or system will be put together to create a final product.
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 Conditions: The characteristics of the market into which a new product will be placed, including the number of competing products, level of competitiveness, and growth rate.
Market Development: Taking current products to new consumers or users. This effort may involve making some product modifications.
Market-Driven: Allowing the marketplace to direct a firmís product innovation efforts.
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 segmentatio n 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 companyís 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
Matrix Converger: A convergent thinking tool that uses a matrix to help synthesize data into key concepts with numbered ratings.
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
Modular Architecture: A product architecture in which each functional element maps into its own physical chunk. Different chunks perform different functions, the interactions between the chunks are minimal, and they are generally well-defined.
Monitoring Frequency: The frequency with which performance indicators are measured.
Morphological Analysis: A matrix tool that breaks a product down by needs met and technology components, allowing for targeted analysis and idea creation.
Multidimensional scaling (MDS): is a means of visualizing the level of similarity of individual cases of a dataset (for exmple products or markets)
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".)
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 Concept Development Model: A theoretical construct that provides for a common terminology and vocabulary for the Fuzzy Front End. The model consists of three parts: the uncontrollable influencing factors, the controllable engine that drives the activities in the Fuzzy Front End and five activity elements: Opportunity Identification, Opportunity Analysis, Idea Generation and Enrichment, Idea Selection, and Concept Definition. (see Chapter 1 of The PDMA ToolBook 1.)
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 Product Idea: A preliminary plan or purpose of action for formulating new products or services.
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.
Nominal Group Process: A brainstorming process in which members of a group first write their ideas out individually, and then participate in group discussion about each idea.
Non-Destructive Test: A test of the product that retains the product's physical and operational integrity.
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.
Operational Strategy: Operational Strategy is an activity that determines the best way to develop a new product while minimizing costs, ensuring adherence to schedule, and delivering a quality product. For product development, the objective is to maximize the return on investment and deliver a high quality product in the optimal market window of opportunity. [can the portfolio implications of operational strategy be incorporated?]
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.
Operator's Manual: The written instructions to the users of a product or process. These may be intended for the ultimate customer or for the use of the manufacturing operation.
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.
Participatory Design: A democratic approach to design that does not simply make potential users the subjects of user testing, but empowers them to be a part of the design and decision-making process.
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.
Payout: The amount of profits and their timing expected from commercializing a new product.
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 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.
Performance Indicators: Criteria on which the performance of a new product in the market are evaluated. (See Chapter 29 of The PDMA HandBook 2nd Edition).
Performance Measurement System: The system that enables the firm to monitor the relevant performance indicators of new products in the appropriate time frame.
Performance/Satisfaction Surveys: A particular type of market research tool in which respondents are asked to evaluate how well a particular product or service is performing and/or how satisfied they are with that product or service on a specific list of attributes. It is often useful to ask respondents to evaluate more than one product or service on these attributes in order to be able to compare them and to better understand what they like and dislike about one versus the other. In this way, this information can become a key input to the development process for next generation product modifications.
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-GateÔ processes using multifunctional teams.
Physical Elements: The components that make up a product. These can be both components (or individual parts) in addition to minor subassemblies of components.
Pilot Gate Meeting: A trial, informal gate meeting usually held at the launch of a Stage-Gate™ process to test the design of the process and familiarize participants with the Stage-Gate™ process.
Pipeline (product pipeline): The scheduled stream of products in development for release to the market.
Pipeline Alignment: The balancing of project demand with resource supply. (See Chapter 5 in The PDMA HandBook 1st Edition and Chapter 3 in The PDMA HandBook 2nd Edition.)
Pipeline Inventory: Production of a new product that has not yet been sold to end consumers, but which exists within the distribution chain.
Pipeline Loading: The volume and time phasing of new products in various stages of development within an organization.
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.)
Pipeline Management Enabling Tools: The decision-assistance and data-handling tools that aid managing the pipeline. The decision-assistance tools allow the pipeline team to systematically perform trade-offs without losing sight of priorities. The data-handling tools deal with the vast amount of information needed to analyze project priorities, understand resource and skillset loads, and perform pipeline analysis.
Pipeline Management Process: Consists of three elements; pipeline management teams, a structured methodology and enabling tools.
Pipeline Management Teams: The teams of people at the strategic, project and functional levels responsible for resolving pipeline issues.
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.
Platform Roadmap: A graphical representation of the current and planned evolution of products developed by the organization, showing the relationship between the architecture and features of different generations of products.
Porter's Five Forces: Analysis framework developed by Michael Porter in which a company is evaluated based on its capabilities versus competitors, suppliers, customers, barriers to entry, and the threat of substitutes. (See Porter, Michael. 1998. Competitive Strategy. The Free Press)
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 Map: A chart or graph which graphically displays the relative scalar strength and weakness of a portfolio of products, or competitors in two orthogonal dimensions of customer value or other parameters. Typical portfolio maps include "Price vs. performance", Newness to company vs. newness to market; Risk vs. return.
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.
Portfolio Team: a short-term, cross-functional, high-powered team focused on shaping the concepts and business cases for a portfolio of new product concepts within a market, category, brand or business to be launched over a 2-5 year time period, depending on the pace of the industry.
Pre-Production Unit: A product that looks like and acts like the intended final product, but is made either by hand or in pilot facilities rather than by the final production process.
Preliminary Bill of Materials (PBOM): A forecasted listing of all the subassemblies, intermediate parts, raw materials, and engineering design, tool design, and customer inputs that are expected to go into a parent assembly showing the quantity of each required to make an assembly.
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 Map: A workflow diagram that uses an x-axis for process time and a y-axis that shows participants and tasks.
Process Mapping: The act of identifying and defining all of the steps, participants, inputs, outputs, and decisions associated with completing any particular process.
Process Maturity Level: The amount of movement of a reengineered process from the "as-is" map, which describes how the process operated initially, to the "should-be" map of the desired future state of the operation.
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.)
Process Re-engineering: A discipline to measure and modify organizational effectiveness by documenting, analyzing, and comparing an existing process to "best-in-class" practice, and then implementing significant process improvements or installing a whole new process.
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 Approval Committee (PAC): The group of managers who serve as advisors, decision-makers and investors in a Stage-Gate™ process: a company's NPD executive committee. Using established business criteria, this multifunctional group reviews new product opportunities and project progress, and allocates resources accordingly at each gate. (See Chapter 7 of The PDMA ToolBook 1 and Chapters 21 and 22 of The PDMA HandBook 2nd Edition).
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.)
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 Check List: A pre-determined list of activities and disciplines responsible for completing those activities used as a guideline to ensure that all the tasks of product development are considered prior to commercialization. (See Ray Riek, JPIM, 2001)
Product Development Engine: The systematic set of corporate competencies, principles, processes, practices, tools, methods and skills which combine to define the "how" of an organization's ability to drive high value products to the market in a competitive timely manner.
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 firmís 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 Strategy: The strategy that guides the product innovation program.
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 firmís portfolio of offerings. (See Chapter 28 of The PDMA HandBook 1st Edition.)
Product Discontinuation Timeline: The process and timeframe in which a product is carefully withdrawn from the marketplace. The product may be discontinued immediately after the decision is made, or it may take a year or more to implement the discontinuation timeline, depending on the nature and conditions of the market and product.
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 Interfaces: Internal and external interfaces impacting the product development effort, including the nature of the interface, action required, and timing.
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 Plan: Detailed summary of all the key elements involved in a new product development effort such as product description, schedule, resources, financial estimations and interface management plan.
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 projectís 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,m 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.
Protocol: A statement of the attributes (mainly benefits; features only when required) that a new product is expected to have. A protocol is prepared prior to assigning the project to the technical development team. The benefits statement is agreed to by all parties involved in the project.
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.
Pull-Through: The revenue created when a new product or service positively impacts the sales of other, existing products or services (the obverse of cannibalization).
Qualitative Cluster Analysis: An individual- or group-based process using Informed Intuition for clustering and connecting data points.
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
Rapid Prototyping: Any of a variety of processes that avoid tooling time in producing prototypes or prototype parts and therefore allow (generally non-functioning) prototypes to be produced within hours or days rather than weeks. These prototypes are frequently used to test quickly the product product's technical feasibility or consumer interest.
Reactors: Firms that have no coherent innovation strategy. They only develop new products when absolutely forced to by the competitive situation.
Realization Gap: The time between first perception of a need and the launch of a product that fills that need.
Relay-Race Process: A staged product development process in which first one function completes a set of tasks, then passes the information they generates 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 phase review or baton-passing processes.
Render: Process that industrial designers use to visualize their ideas by putting their thoughts on paper with any number of combinations of color markers, pencils and highlighters, or computer visualization software.
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.
Responsibility Matrix: This matrix indicates the specific involvement of each functional department or individual in each task or activity in each stage.
Return on Ideas: Reflects the potential value of an idea.
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.
Rigid Gate: A review point in a Stage-Gate™ process at which all the prior stage's work and deliverables must be complete before work in the next stage can commence.
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.
Robust Design: The design of products to be less sensitive to variations, including manufacturing variation and misuse, increasing the probability that they will perform as intended.
"Rugby" Process: A product development process in which stages are partially or heavily overlapped rather than sequential with crisp demarcations between one stage and its successor.
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.
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