the groups have differing perspectives and accountabilities, but are charged with coordinating their efforts to deliver a new product. Table 2.5 shows these differing priorities.
Table 2.5 Marketing vs. Engineering Focus in New Product Development.
| Marketing | Engineering |
|---|---|
| Cost conscious in meeting budgets, ROI (Return on investment)Schedule compressionDeveloping advertising campaignFreezing designChanges saved for next release (V2.0)Anxious to beat competitors to market (first to market gets market share) | Desire to do it right the first timeChanges to improve product are necessary for successSchedule slips are acceptable with justificationBudget is important, but having a quality product is more importantTesting and Quality Control are paramountScope changes are part of the process |
Table developed by David Tennant
Regardless of which team is leading the development effort, a certain amount of tension can be beneficial in forward progress. There will always be “give and take” in the design process. Figure 2.6, Product Development Process Flow, shows a sample process flow in the development of new products. This can vary between companies, but it provides a general sense that the development of new products is not a random series of actions, but rather, has well-defined steps with checks and balances along the way.
Figure 2.6 PD Process Flow. Credits: Diagram by David Tennant
The role of the product manager is to provide leadership to the project. This includes:
Ensuring the team has the tools, training, and support needed to be successful
Resolving conflict and building team morale
Coordinating the efforts of various departments working on the project
Serving as a conduit of information between groups
Serving as a direct link between the project team, executive leadership and external suppliers
Ensuring trust and a good working relationship between team members
Being cognizant of project quality, budgets and schedules
Ensuring all stakeholders are identified and key stakeholders are kept informed.
A product manager must be an active project participant and cannot ignore conflict, warning signs of failure, or the desires of key stakeholders. The role, whether from engineering or marketing (or any other department), is focused on managerial and leadership skills more than technical skills.
Marketing Services
Although services can be thought of as a product, they must be marketed differently. When you buy a new computer or smart phone, you can look at it, feel if, and hold it; perhaps even try it out to see how you like it. If you purchase the product and don’t like it, you can usually return it for a refund or exchange.
Services are different. For example, if you provide accounting services to clients, it’s an intangible service. You cannot feel, smell, see, taste, or try it out. You may or may not get a refund if you’re unhappy with the result.
Like any product, one must obtain user input. What would a customer like to see in the way of customer service? Would guarantees of satisfaction make the product more desirable? What is the outcome if your client purchases the service (Benefit)?
Also, the use of data analytics can be useful. What are data analytics? Data analytics is a process to analyze raw data so that conclusions may be drawn from that information. In today’s technical world, a lot of the data can be analyzed using automation and algorithms. Data analytics can help manufacturing identify and remove roadblocks. It can help firms become more efficient in their business processes.
However, for services, it can also help a business understand their customers, and therefore improve their marketing campaigns, personalizing of their services and improve their products. This data can be collected from historical records or from customers directly. For example, a utility can pull up data from their customers showing electric use patterns, payment options used, and time of day peaks in electric use. This data can be segmented. From this data, new rates (a service) can be derived and offered to their customers. Other sources of data include companies in the marketplace that collect and sell data. Think about your web browser capturing you internet trail. They know when you’re most active (time of day), the types of sites you typically visit and what kinds of purchases you make online. For example, data analytics may be able to track and tell what music sites you visit, what topics you watch on YouTube (history videos for example), and what types of car accessories you like to purchase.
Services must have a different marketing strategy and data analytics can help a business hone their message, offer new services, help segment their market, and determine which online platforms would be most effective.
New Product Development and Market Economics: The Future of Electric Trucks vs Costs and Public Policy
In the United States, electric vehicles (EVs), account for 2% of new car sales (2021). However, that number is expected to rise to 30% or more in the next 10 years. It is commonly known that cars are evolving from the internal combustion engine (IC) to electric motors. EVs are slowly seeing greater acceptance in the marketplace. Along those same lines, large trucks are also moving in this direction, but the outlook isn’t as clear.
This shift in transportation offers opportunity, rewards, and risks for companies looking to profit from this disruptive technology. This section will focus on EV trucks as a viable market opportunity.
Public Policy
A number of countries have mandated that the IC engine will no longer be sold in new vehicles by the year 2030. This includes several European and Asian countries. The United States, in comparison, has not mandated a ban on ICs, but has public policies that push the USA in this direction. For example, there are significant tax credits (savings) for individuals and corporations who purchase alternative fuel vehicles. At the same time, taxes on existing fuels (gasoline and diesel) have been rising (increasing operating costs).
Consequently, the market is steadily moving from traditional fossil fuels to cleaner, alternative-fueled vehicles. For large-rig Semi trucks, the waters are a little murkier. For instance, the long haulers would need a range of 400 miles and a network of charging stations along the way. However, how long will it take to charge an 18-wheeler? If more than 30 minutes, this could be a barrier to entry. Also, the trucking industry has also been looking at natural gas-powered vehicles and hydrogen powered vehicles.
From a new product development standpoint, the market seems to be a moving target. In the United States, there are eight basic classifications of trucks as follows:7
Classes 1 through 3: light, non-commercial trucks such as pickups, SUVs, and minivans
Classes
