Innovation, a crucial dilemma to be successful.
Innovating is crucial for a company in order to satisfy its customers ‘expectations and to cope with the competition in a market place which is everyday more and more challenging. However, coping with the competition doesn't mean offering products which are somehow better or cheaper than the competition. Not at all. One must differentiate itself from the competition by offering innovative products, and the only way to be acknowledged as an innovative company is to stand one step further than the competition. Of course, it is easier to say than to implement.
Indeed, most of the companies try to innovate to rejuvenate their portfolio and to meet new trends. However, around 90% of the new mass consumer goods launched in Europe are failures compared to 95% rate in the USA . It is quite worrying and it is not only a reality in the mass consumer good market but also in all the rapidly evolving markets. These rates also stress the importance of new product development processes which can be used as major tools to decrease these risks of failures.
Most companies implement the traditional marketing research methods to generate new ideas, to develop and assess potential new concepts. These methods often try to discover new customer needs by analyzing customer complaints, buying patterns, preferences and enable to test the rate of customer acceptance once a prototype has been created through customer testing, pre-test market etc. However, these methods rarely offer insights to identify innovations that could have already been developed by users.
A professor of the MIT Sloan School of Management focused his studies on this poorly-known side of the new product development process. Prof. Eric von Hipple then defined the Lead User Method, a method designed to deepen our understanding of the innovation process and to improve the success of new product development by identifying who he calls “Lead users”.
Thus, a company undertaking a new product development process will experience a lot of pressure due to the high rates of new product failures.
How could we decrease the risks of failures and thus improve the chances of success of new products? Would the Lead user method provide a solution? Would it help better assess the needs and trends of the market and design a product that will fit these needs and trends?
This thesis will be aimed at understanding the reasons linked to new product failures and at assessing the conventional new product development methods and the Lead user method in order to provide an hypothesis that will improve the chances of success of new products.
[...] (1994) New Product Management, 4th Edition, Irwin Co, Burr Ridge Ill The Lead User Method PUBLICATIONS: Bécheur A & Gollety Validation d'une échelle de mesure du profil de Lead user, http://www.escp-eap.net/conferences/marketing/pdf_2003/fr/becheur_gollety.pdf (10/02/05) Franke N & von Hippel Finding commercial Attractive User Innovations : An Exploration and Test of Lead User Theory, MIT Sloan School of Management Working Paper N°4402- Griffin Drivers of New Product Development Success, The 1997 PDMA Report, University of Illinois Herstatt C and von Hippel From Experience: Developing New Products Concepts Via the Lead User Method: A Case Study in the Tech” Field, Journal of Product Innovation Management URENIO, A RoadMap to New Product Development, www.e- innovation.org/presentations/mantova/urenio.ppt , 18/10/2002. [...]
[...] A response is provided in the “Lead user analyses for the development of new industrial products” publication of Eric von Hippel: “Some possible indicators that lead user perceptions and preferences do not foreshadow those of the general user community: Response among lead users is found to be multimodal, suggesting that product potential may be restricted to a sub-segment of lead users; A discriminant analysis of user attributes on concept acceptance indicates high correlation with attributes that characterize only a segment of lead users; Little or multimodal response in the most expert group of non-lead users.” Regarding the trend identification, some issues can also occur. [...]
[...] Eric von Hipple then defined the Lead User Method, a method designed to deepen our understanding of the innovation process and to improve the success of new product development by identifying who he calls “Lead users” Kenichi Ohmae, La Triade : émergence d'une stratégie mondiale de l'entreprise, Paris, Flammarion The Lead User Method Thus, a company undertaking a new product development process will experience a lot of pressure due to the high rates of new product failures. How could we decrease the risks of failures and thus improve the chances of success of new products? [...]
[...] Thus the company needs to check if the Lead users current Herstatt and Eric von Hippel, From Experience:Developing New Products Concepts Via the Lead User Method: A Case Study in the Tech” Field, Journal of Product Innovation Management The Lead User Method needs will be transferred to the rest of the market thanks to the innovation diffusion process. A type of test market can be undertaken with some of the company customers who are categorized as routine users. The company should use customers that it can trust because a huge competitive advantage is at stake. [...]
[...] For Eric von Hippel, lead users are consumers who can be source of new ideas because they have needs and try to find a solution to their needs Discussion with Trevor White, Senior Marketing Manager, Ventana Medical Systems, (10/03/2005) The Lead User Method In marketing, when the innovation diffusion process is analyzed, innovators are defined as the first new product adopters. However, for Prof. von Hippel the lead users are not innovators as defined above, but they are consumers and inventors who forecast the needs of the rest of the market (see Fig 631). [...]
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