[ Note: Thanks to the interest of our dear readers we updated the post in January 2021}
Product protocol also called product definition, product requirements or product deliverables is critical to innovation. A product protocol is necessary after you have chosen a new product concept, completed concept testing and done some preliminary sales forecasting of what numbers you expect to sell and at what margins. Steps of NPD (New Product Development) are part of the Stage Gate NPD process created by Robert Cooper. Let us consider each in turn:
- Deciding a product concept: from concept generation is the first step of the innovation process that is based on your estimates of market and consumer need. Once you have a concept test that you feel will be liked by your target market (B2B or B2C) you move to the next step.
- Concept Testing: is the step where the new product concept is tested with target market customers. The feedback obtained is used to modify the concept.
- Sales forecasting: is where initial sales are projected along with estimates of advertising and marketing expenditure to get the new product launched. The estimate of cost of production is the key ingredient that informs the product protocol.
In fact, the cost of production estimates in the sales and profitability forecast give the target cost to provide to the product design & development team.
Organizations are sadly great at losing sight of the purpose of innovation: To meet customer and market needs. The product protocol helps everyone stay focussed on the end goal of satisfied and happy customers.
Functional areas like marketing, product design and production are frequently not on the same page. If marketing is talking about the voice of the customer for a particular feature that is considered valuable by customers, production and design folks can be really wrapped up in their own production constraints. Ideally though, everyone in the organization needs to just focus on customer requirements and innovate within their own specialties to deliver requirements within the time and costs specified in the product protocol.
Among the different tools out there, the House of Quality (HOQ) is a good tool to try and keep everyone marketing oriented and customer focused and can be used as a part of the product protocol.