Can we create the product with our current capabilities, or
do we have to buy equipment? Which materials are appropriate? Do we have to ask suppliers to change their materials? The program also includes product mockups, quality standards and pricing guidelines. Carlson says while SSP spent years honing the program, it saves the company a lot of time during R&D.
SSP recently developed tamper-resistant airline luggage tags and dispensers. Paxar recently developed a line of retail security products, including Electronic Article Surveillance (EAS) woven garment labels. The labels can be located via transmitters even when concealed. Based on their experiences with these projects, Carlson and Chamandy offer 10 tips for successful new product development:
1.
Consider clients' ideas. "If the customer has a problem, we develop
accordingly," Chamandy says. "Sometimes it doesn't cater to the general mass
of the marketplace, but if it's a big enough piece, we'll develop a solution."
Chamandy says individual solutions often can be resold to a larger market.
"One of the things you find is that everyone has similar problems," he says.
2.
Form a think tank. SSP formed an internal group called Tag Team Solution
Providers, which includes employees from the company's marketing, sales, quality
inspection, purchasing, printing and shipping departments. The group holds
roundtable discussions to identify pros and cons of new products. Carlson
relies on the group's range of specialties. "There are some very ingenuous
press operators who understand how to arrange a project to make it fit a distributor's
needs," she says.
3.
Research potential end users. By consulting airlines and distributors, Carlson
learned that airlines wanted tamper-resistant tags that could contain
information about luggage weight. Chamandy asked retailers about their garment
labeling needs. "We're able to [provide] labeling that blends in with the
garment and is very discreet," he says. "That's key to these retailers. They
don't want to change the look of their stores."
4.
Understand product adoption rates. Retailers must use special equipment to deactivate
Paxar's labels, Chamandy says. Unlike most European retailers, U.S. retailers
had to integrate the equipment with their existing systems. As a result,
European retailers adopted the labels quickly, but U.S. retailers postponed
their purchases as long as three years after the labels were introduced to the
market. After market leaders such as Kmart, Wal-Mart, Ann Taylor and J. Crew
started buying the equipment, many others followed suit, Chamandy says.
5.
Hire patent experts. SSP has a patent research department and a patent law attorney. The
arrangement saves Carlson time and worry, she says. Instead of filling out
paperwork and conducting extensive patent searches, Carlson can devote her time
to invention, development and marketing.
6.
Form alliances. Paxar worked closely with technology provider Sensormatic
Electronics Corp. for five years to develop the EAS aspect of its garment
labels. To gain a say on industry standards for applying the labels to garments,
Paxar also joined a Voluntary Industry Standards subcommittee.
7.
Evaluate pricing. Assuming clients would compare Paxar's garment labels to hang tags,
Paxar employed what's known as reference pricing. "We analyzed what it cost to
buy a hard tag and how long a hard tag actually lasts," Chamandy says. "Then we
amortized the cost per use based on the life of it, and we added the cost for
the retail store to apply it and the cost to remove it." Paxar used the
information to price its labels competitively and to explain comparative
benefits.
8.
Test the product repeatedly. Ensure that all materials and processes result in
high-quality, efficient products, Carlson says. "You have no idea how many times
I went back to bat on this airline tag," she says. "You go to press, something
goes wrong. You go back, something goes wrong. You just keep working away at it
until you get what you need."
9.
Market to distributors. Distributor relationships are critical when it comes to new
product development, Carlson says. She mailed distributors samples of the
airline tags. By not sending the tag dispensers, she saved money and compelled
distributors to call her for more information. Carlson also provides
distributors with educational mailings, sell sheets for 14 potential markets,
product brochures and online product information. "The distributors have a very
close relationship with the airlines because they sell them a full solution
program, all the way from their forms to their toilet paper," she says.
10.
Be patient. Carlson spent eight months developing the airline tags from
conception to launch. New products often develop slowly, especially if they
require new equipment or skills, she says. "It takes people several times to go
back to the drawing board for perfection," she says.
—Rita Tiefert
Manufacturers say new product development holds many advantages. "The leader who develops the product initially enjoys better profit margins," says Paul Chamandy, vice president of new product development at manufacturer Paxar Corp., White Plains, N.Y. The key to creating products is identifying clients' problems, he says. "The one who can solve the problem in a cost-effective manner wins the business," he says. "It's not just the game of who has the cheapest price."
To make new products a success, manufacturers should employ a research and development program, says Peggy Carlson, marketing specialist at manufacturer Special Service Partners (SSP), Neenah, Wis. SSP uses an R&D program that includes three questions:
