Discuss the relative importance of product/service attributes and organisational factors in successful new product and service development.

Answer TWO questions. Each carries equal marks (50 marks per question). Maximum 2,000 words, 1,000 words each question.
1. Discuss the relative importance of product/service attributes and organisational factors in successful new product and service development. Provide details of three product factors, and two organizational factors (10 marks per factor).
it is possible to identify some consensus of what the best criteria for success: Product:
? Product advantage – product superiority in the eyes of the customer, real differential advantage, high performance-to-cost ratio, delivering unique benefits to users – appears to be the primary factor separating winners and losers. Customer perception is the key.
? Market knowledge – the homework is vital: better predevelopment preparation including initial screening, preliminary market assessment, preliminary technical appraisal, detailed market studies and business/financial analysis. Customer and user needs assessment and understanding is critical. Competitive analysis is also an important part of the market analysis.
? Clear product definition – this includes defining target markets, clear concept definition and benefits to be delivered, clear positioning strategy, a list of product requirements, features and attributes or use of a priority criteria list agreed before development begins.
? Risk assessment – market-based, technological, manufacturing and design sources of risk to the development project must be assessed, and plans made to address them. Risk assessments must be built into the business and feasibility studies so they are appropriately addressed with respect to the market and the firms’ capabilities.
Organizational:
? Project organization – the use of cross-functional, multidisciplinary teams carrying responsibility for the project from beginning to end.
? Project resources – sufficient financial and material resources and human skills must be available; the firm must possess the management and technological skills to design and develop the new product.
? Proficiency of execution – stage-gate process, quality of technological and production activities, and all pre-commercialization business analyses and test marketing; detailed market studies underpin new product success.
? Top management support – from concept through to launch. Management must be able to create an atmosphere of trust, coordination and control; key individuals or champions often play a critical role during the innovation process.
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2. Discuss the difference between Delphi and Scenario methods, and identify in which circumstances you might use each (25 marks per method).
The opinion of outside experts, or Delphi method, is useful where there is a great deal of uncertainty or for long time horizons. Delphi is used where a consensus of expert opinion is required on the timing, probability and identification of future technological goals or consumer needs and the factors likely to affect their achievement. It is best used in making long-term forecasts and revealing how new technologies and other factors could trigger discontinuities in technological trajectories. The choice of experts and the identification of their level and area of expertise are important; the structuring of the questions is even more important. The relevant experts may include suppliers, dealers, customers, consultants and academics. Experts in non-technological fields can be included to ensure that trends in economic, social and environmental fields are not overlooked.
Scenarios are internally consistent descriptions of alternative possible futures, based upon different assumptions and interpretations of the driving forces of change. Inputs include quantitative data and analysis, and qualitative assumptions and assessments, such as societal, technological, economic, environmental and political drivers. Scenario development is not strictly-speaking prediction, as it assumes that the future is uncertain and that the path of current developments can range from the conventional to the revolutionary. It is particularly good at incorporating potential critical events which might result in divergent paths or branches being pursued.
3. Explain five factors that influence the adoption and diffusion of innovations (10 marks per factor).
Numerous variables have been identified as affecting the diffusion and adoption of innovations, but these can be grouped into:
? characteristics of the innovation itself, including:
? relative advantage,
? compatibility,
? complexity,
? observability
? trialability.
? Individual characteristics include age, education, social status and attitude to risk.
? Environmental and institutional characteristics include economic factors such as the
market environment and sociological factors like communications networks.
However, whilst there is a general agreement regarding the relevant variables, there is very little consensus on the relative importance of the different variables, and in some cases disagreements over the direction of relationships.
4. What are the differences between organizational climate and culture, and discuss five climate factors that influence innovation? (10 marks per factor).
Characteristics of an innovative climate:
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? Challenge & involvement
? Freedom & autonomy
? Trust & openness
? Idea time & support
? Playfulness & humour
? Conflict & debate
? Risk-taking