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The development of new products and services is key to business success, but a new study from North Carolina State University shows that businesses could do a much better job of evaluating new ideas in order to identify products that will be winners in the marketplace.

“You need more critical screens upfront, so that good decisions get made earlier, bad ideas get eliminated, good ideas get moved forward, and you don’t waste time or money on the wrong projects,” says study co-author Dr. Mitzi Montoya, Zelnak Professor of Marketing Innovation at NC State.

New product development encompasses a wide range of activities, from market analysis to prototyping. Companies incorporate periodic review points when a team evaluates these activities and determines whether to pursue an idea, drop the idea or collect additional information and reevaluate. Review teams are usually comprised of senior management representatives from a company’s marketing, finance, research and development and/or manufacturing branches.

Montoya says that the research found that properly evaluating a concept at its very first review – accurately identifying strengths and weaknesses – is closely linked to a new product’s success in the marketplace. Good evaluations later in the process are less critical to the ultimate success of the products, Montoya says.

But having adequate evaluation early in the process requires good review criteria, which the study found may also be lacking. To understand the need for new criteria, you have to understand the two types of new product development projects: radical projects and incremental projects. Incremental projects are updated versions of existing products or services. Radical projects are new and innovative, carrying greater potential benefits – and greater financial risks.

The study, which evaluated the product development practices of 425 members of the Product Development and Management Association, found that companies use more review points for radical projects than incremental ones, but use fewer criteria to determine whether to move forward with a radical project.

“This suggests they probably don’t know which criteria to use,” says Montoya, “so radical ideas – regardless of their merit – might be killed because they are not being evaluated properly.”

To this end, Montoya says, the research provides a summary of criteria that companies could use as a benchmarking template for developing their own customized review criteria and evaluating their review practices. These criteria cover an array of financial, marketing and technical issues, from profit objectives to potential for patents.

The study, “Exploring New Product Development Project Review Practices,” was co-authored by Montoya, Dr. Jeffrey Schmidt of the University of Oklahoma and Dr. Kumar Sarangee, who was a Ph.D. candidate at the University of Illinois when the paper was written. The paper is being published in the September issue of the Journal of Product Innovation Management.

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Note to editors: The study abstract follows.

“Exploring New Product Development Project Review Practices”

Authors: Mitzi M. Montoya, North Carolina State University; Jeffrey B. Schmidt, University of Oklahoma; Kumar R. Sarangee, University of Illinois

Published: September 2009, Journal of Product Innovation Management

Abstract: Most organizations use new product development (NPD) processes that consist of activities and review points. Activities basically solve problems and gather and produce information about the viability of successfully completing the project. Interspersed between the development activities are review points where project information is reviewed and a decision is made to either go on to the next stage of the process, stop it prior to completion, or hold it until more information is gathered and a better decision can be made. The review points are for controlling risk, prioritizing projects, and allocating resources, and the review team typically is cross-disciplinary, comprising senior managers from marketing, finance, research and development (R&D), or manufacturing. Over the past four decades, research has greatly advanced knowledge with respect to NPD activities; however, much less is known about review practices. For this reason, the present paper reports findings of a study on NPD project review practices from 425 Product Development & Management Association (PDMA) members. The focus is on three decision points in the NPD process common across organizations (i.e., initial screen, prior to development and testing, and prior to commercialization). In this paper, the number of (1) review points used, (2) review criteria, (3) decision makers on review committees and the proficiency with which various evaluation criteria are used are compared across incremental and radical projects and across functional areas (i.e., marketing, technical, financial). Furthermore, the associations between these NPD review practices and new product performance are examined. Selected results show that more review points are used for radical NPD projects than incremental ones, and this is related to a relatively lower rate of survival for radical projects. The findings also show that the number of criteria used to evaluate NPD projects increases as NPD projects progress and that the number of review team members grows over the stages, too. Surprisingly, the results reveal that more criteria are used to evaluate incremental NPD projects than radical ones. As expected, managers appear to more proficiently use evaluation criteria when making project continuation/termination decisions for incremental projects; they use these criteria less proficiently during the development of radical projects, precisely when proficiency is most critical. At each review point, technical criteria were found to be the most frequently used type for incremental projects, and financial criteria were the most commonly used type for radical ones. Importantly, only review proficiency is significantly associated with performance; the number of review points, review team size, and number of review criteria are not associated with new product performance. Furthermore, only the coefficient for proficiently using marketing criteria was significantly related to new product program performance; the proficiency of using financial and technical information has no association with performance. Finally, across the three focal review points of the NPD process in this study, only the coefficient for proficiency at the first review point, (i.e., the initial screen) is significantly greater than zero. The results are discussed with respect to research and managerial practice, and future research directions are offered.

Recreational anglers and commercial fishermen understand you need good fishery management to make sure there will be healthy populations of fish for generations to come. And making good management decisions rests in large part on understanding the mortality of fish species – how many fish die each year as a result of natural causes and recreational and commercial fishing. Now researchers at North Carolina State University have utilized a new research method that can give fishery managers a better idea of how fish are dying, so they can make informed decisions on how to ensure a healthy fish population.

Fisheries scientists from NC State have, for the first time, implemented a research strategy that uses both “conventional” tags and ultrasonic telemetry tags (transmitters) to estimate mortality rates. The approach was used in a study on mortality rates of “sub-adult” red drum, which are red drum that are close to adult in size but have not yet begun to reproduce. However, the research methods pioneered in this study could be applied to many other species, including popular fish such as striped bass. Red drum are popular among recreational anglers in many parts of the country, and are also important to commercial fishermen in North Carolina.

The conventional tags offer rewards to recreational and commercial fishermen who catch the tagged fish, creating an incentive for them to contact researchers. This approach lets researchers know how many of the tagged fish have been caught and how many of the fish were subsequently released or harvested, explains Dr. Jeff Buckel, an associate professor of biology at NC State and co-author of the study. This approach provides particularly good data on mortality resulting from commercial and recreational fishing, Buckel says.

The telemetry tags transmit uniquely coded sounds to receivers, allowing researchers to track fish movement in a given area. In this instance, the researchers were using both stationary receivers and mobile hydrophones to track tagged fish in the Neuse River estuary in eastern North Carolina, Buckel says. Telemetry tags provide excellent data on natural mortality, because the tags stop moving once the fish has died. These tags can also detect that a fish has been caught by commercial or recreational fishermen, because the tag will disappear from the study area without swimming past any of the receivers.

“The methodology we used in this study combined good natural mortality data from the telemetry tags with good recreational and commercial fishing mortality data from the conventional tags to give us a more precise estimate of overall mortality for sub-adult red drum,” Buckel says. “This is important because, if you have a good understanding of mortality rates, you can make informed decisions about how to manage a fishery in order to ensure its long-term health.” For example, the information generated by this study contributed to state and regional assessments of the red drum population.

“This is the first time this approach, using both kinds of tags, has been used in the field,” Buckel says, “and it could have significant applications for other species, such as striped bass.” One limitation is that the telemetry tags are only useful in relatively confined areas, such as lakes, estuaries or reservoirs – where researchers can place listening devices near exits to determine if a fish has left the waterbody on its own, rather than being caught by a fisherman.

The researchers, led by then-NC State Ph.D. student Nathan Bacheler, focused on sub-adult red drum because North Carolina only allows recreational and commercial fishermen to keep drum that are between 18 inches and 27 inches long. These fish are generally not old enough to reproduce. So researchers wanted to determine whether natural mortality and fishing mortality were limiting the long-term viability of the fishery. Good news fish fans: “Natural mortality was much lower than we previously assumed,” Bacheler says, “and the fishing mortality was similar to previous estimates.”

The research, “A combined telemetry – tag return approach to estimate fishing and natural mortality rates of an estuarine fish,” was funded by North Carolina Sea Grant and is published in the August issue of the Canadian Journal of Fisheries and Aquatic Sciences. The study was co-authored by Bacheler, Buckel, NC State biology professors Dr. Joseph Hightower and Dr. Kenneth Pollock, and Lee Paramore of the North Carolina Division of Marine Fisheries.

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Note to editors: The study abstract follows.

“A combined telemetry – tag return approach to estimate fishing and natural mortality rates of an estuarine fish”

Authors: Nathan M. Bacheler, Jeffrey A. Buckel, Joseph E. Hightower, Kenneth H. Pollock, North Carolina State University; Lee M. Paramore, North Carolina Division of Marine Fisheries

Published: Online August 2009, Canadian Journal of Fisheries and Aquatic Sciences, 66:1230-1244

Abstract: A joint analysis of tag return and telemetry data should improve estimates of mortality rates for exploited fishes; however, the combined approach has thus far only been tested in terrestrial systems. We tagged subadult red drum (Sciaenops ocellatus) with conventional tags and ultrasonic transmitters over 3 years in coastal North Carolina, USA, to test the efficacy of the combined telemetry – tag return approach. There was a strong seasonal pattern to monthly fishing mortality rate (F) estimates from both conventional and telemetry tags; highest F values occurred in fall months and lowest levels occurred during winter. Although monthly F values were similar in pattern and magnitude between conventional tagging and telemetry, information on F in the combined model came primarily from conventional tags. The estimated natural mortality rate (M) in the combined model was low (estimated annual rate ± standard error: 0.04 ± 0.04) and was based primarily upon the telemetry approach. Using high-reward tagging, we estimated significantly different tag reporting rates for state agency and university tagging programs. The combined telemetry – tag return approach can be an effective approach for estimating F and M as long as several key assumptions of the model are met.

North Carolina State University’s Encore Center for Lifelong Enrichment, which offers a variety of non-credit programs for adults aged 50 and older, has begun registration for its fall 2009 courses, trips and events, which run from Sept. 9 to Dec. 11. Continue Reading »