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The Lead User Method: A solution to improve new product success in rapidly changing markets?

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  1. Introduction
  2. The risk innovation process: Typology of innovations and risks
    1. Typology of innovations
    2. Typology of risks linked to innovation
  3. Inputs provided by traditional new product development research methods
    1. Steps of traditional research method
    2. Assets and limits of these methods
  4. The lead user method: A key to successful innovation
    1. Definition of the lead users
    2. Steps of the lead user method
    3. Assessing the value of the lead user method
  5. Assessing the lead user method as an asset to innovate in the clinical and scientific research markets
    1. Presentation of the company
    2. The strategy of innovation within ventana
  6. Conclusion
  7. Bibliography
  8. Appendices

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, (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- , 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. [...]

[...] Indeed, an idea can be attractive during a certain amount of time but if it doesn't meet the customer expectations or the company requirements in terms of revenues, sales, profits, it is always better to stop the process than to launch a product which will be a disaster Eric von Hippel, Democratizing Innovation : The Evolving Phenomenon of User Innovation, MIT Press, April Kotler & Dubois, Marketing Management, Pearson Education, 11ème Ed Fig Schematic Approach of New Product Development Process10 The Lead User Method Idea Generation Idea Screening Concept Development Product Development Product Launch Now, let's study thoroughly each of the steps of the NPD Process. [...]

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