Wednesday, October 18, 2006

The Importance of Working with your Developers

Not sure if you need a login to get at this excellent article by Roy Young that appeared the other day on Marketing Profs, so I've got the whole thing here.

The 10 Biggest Mistakes Marketers Make-No.4:
Failure to Dream with the R&D Team

It's impossible to take a new product invention from utter unknown to the number-one seller in less than five years—right? Wrong. Johnson & Johnson division McNeil Nutritionals pulled it off with Splenda, the trademarked name for a food sweetener called sucralose. How? McNeil's marketers took steps to ensure a well-executed launch, including initially making Splenda available only to diabetics—who then rapidly spread the word about the new product's benefits.

As you know, creating products is risky business: Companies invest hugely in their R&D teams, yet most new offerings fail, with the consequence of serious financial loss. R&D needs marketing to help reduce risk in new product development; marketing needs R&D to be part of the team that creates sources of future cash flow.

To create value for your company, marketing brings important expertise, perspective, and processes to make R&D more likely to succeed. The first step is to know the typical makeup of scientists or engineers from R&D is very different from yours; and they are likely to have some preconceived ideas of what you are like. Consider the stereotypes about R&D and Marketing:

R&D: Tech-centric. Complex solutions. Scientist. Detail-oriented. Features focused. Problem-oriented. Inventions without a market.No concern for price, costs, or profit. Customer? What's that?Poor communicators. Ivory-tower dwellers.

Marketing: Big picture. Go to market fast. Artisan. Detail-ignorant. Benefits focus. Scattered. Opinions without justification. Concerned only about sales volume and market share. Scientific rigor? What's that? Expensive advertisers. Does a job that anyone can do.

These differences often create obstacles—but, as you join new product development teams, be optimistic that the differences between these two functions can actually serve as sources of strength, with each team bringing unique perspectives to bear on the company's efforts to succeed. Keeping in mind the typical R&D mindset, consider using these six strategies to work together effectively:

1. Identify products that offer unique value to consumers
Consumers perceive new offerings as valuable when those products or services have unique features, meet consumers' needs better than alternative offerings do, demonstrate good quality, reduce consumers' costs, and seem novel. Help R&D select projects for development that meet such criteria by providing comparative analyses of competing products and sharing your knowledge of consumers' needs and costs. Teach your colleagues from R&D about the market power of needs-based segmentation: the idea that customers should be segmented on the basis of their needs. Simply put, customers in different benefit segments have different needs.

2. Lead a customer-focused development process
Sharing your understanding of consumers' needs and preferences with your colleagues in R&D can encourage them to keep customers in mind while developing new products and services. Ongoing customer contact through market research is the crucial means by which you generate valuable knowledge of the product and services. But to gather and present market-research data that will be meaningful and useful to R&D, you must demonstrate the scientific rigor and familiarity with the language of research that R&D experts appreciate. For example, establish a sound statistical foundation for your research, gathering input on methodology if necessary from technical staff on topics such as statistical significance and research design. Pay close attention to your sampling: Do respondents to a survey represent an adequate cross-section of the consumer population you're interested in? Should you augment surveys with focus groups or one-on-one interviews? Could interviews with existing customers shed additional light on potential new customers' needs and interests?
Consider conducting field research—observing consumers as they shop for and use products in your target market. And don't forget to gather input from expert consumers in the product category at hand—chefs, for example, if your company is developing cookware, or physicians if you're working on a new medical device. Insights from these experts can spark additional ideas for new products and services. Talking with staff members from other units in your company—sales, customer service, operations, and so forth—and consulting with trade-show participants can yield further valuable information about consumers' needs.

3. Help R&D to focus on consumer benefits, not product features
With any new product or service under consideration, R&D has extensive homework to do first. Help your R&D colleagues complete that homework by conducting market research to identify who the target customer is, how the product should be positioned, what consumers would be willing to pay for the new offering, and what product features would deliver the benefits that consumers want.

4. Ensure a well-executed launch
Of course, all the market research in the world won't help a new product or service succeed if the offering isn't launched properly. The heart of a well-executed launch? A solid marketing plan—one you start building early in the development process. The best marketing plans outline effective go-to-market strategies and communication programs. They take into account consumers' emotional attachment to products and reflect deep understanding of how much people are willing to pay for specific benefits provided by an offering. Advertisements about a new product or service "lead with the need": They acknowledge the need that consumers want the product or service to fill, and they explain how the offering fills that need better than alternative offerings do.

5. Leverage your firm's core competencies
Point out ways to develop offerings that take advantage of what your company does best already. As some experts maintain, step-out projects—those that require entirely new competencies—tend to fail. By leveraging your firm's established talents, you and the R&D team go into the competitive arena powerfully equipped to trounce rivals. How to identify the core competencies that best lend themselves to breakthrough products and services? In all too many companies, executives overemphasize technology-related strengths—such as engineering, manufacturing, and operations. Sure, these strengths are important. But organizations that focus solely on such abilities overlook important marketing-related competencies, such as a company's existing customer base, sales force, and distribution channels. Additional valuable marketing competencies include customer service resources, advertising and promotion talent, and market intelligence.

6. Target promising markets
Help R&D develop products targeted at more attractive markets—those that are large and getting large, and in which customers have a strong need for products. This is precisely what the marketing team at innovation leader 3M did, according to an article in the November 2005 issue of Business 2.0. At 3M, scientists were reassigned to work in major business units, where marketing teams could help them find a market for a product in development and thus increase the chances that new offerings would ultimately prove commercially viable. Marketers encouraged scientists to think futuristically about products and to mingle with potential customers early in the development process.

Such changes yielded impressive results. To illustrate, under the new regime, one chemist who had tinkered for years with nanotechnology-based materials developed a film of reflective material that boosted brightness and clarity in liquid crystal display (LCD) screens used in cell phones, laptop computers, and televisions—a highly marketable offering.

As Bill Schultz, a top scientist with 3M since 1968, explains, "Finding a business unit that knows it market makes us more confident. Nothing is more frustrating than doing good tech development and not having your product commercialized."

Look to dream with the R&D team if you want marketing to be valued as a leader of future cash flow.

OK. For many of us, there's no such thing as R&D - it's all "D". We're not dealing with formal research budgets like 3-M or McNeil. Yes, mistaken software designs can turn into expensive market failures, but it's nowhere near the magnitude of making a mistake with a manufactured product. But often the techies pumping out code are doing so in an isolated, ivory tower in which ideas are transmitted directly from their brain into their fingertips and on into the code base without really thinking about the customer and market aspects of what they're doing.

So Roy Young's article makes an excellent reminder of how important it is for marketing to work with engineering, other than to say that I’ve always found that it can be enormously helpful to get the product developers out in the field. My career has been in high tech (primarily software), and while I sometimes had to drag my techies out there kicking and screaming, every customer visit, prospect call, trade show walk-around – anything that got the engineers out into the “real world” – yielded enormous benefits.

Greater understanding about how the product was actually used by real customers would translate into features that improved the customer experience. Engineering’s hearing from prospects about barriers to purchase and out-and-out deal-breakers made it easier to get important new features in the next rev, and helped us all discern what were true customer needs (vs. what were rightfully ignored knee-jerk demands from sales based on what they’d heard on their last call). Floating around the trade-show floor to see what the competitors have to offer was often an eye-opener as well - when confronted with successful competitive products with features we lacked and sorely needed lit more than one coding fire.

Some marketers shy away from direct "contact" with their developers, fearing that they'll be viewed as lightweights capable only of providing logo-ware. (And we've all dealt with developers who completely looked down their nose at marketing because we lacked their domain expertise and advanced degrees.) We may need to keep in mind that we provide an extremely important and highly valuable function when we help drive the right products to the right markets.

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