Developing new products
A Gillette case study

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Page 2: Researching and developing a new product

Properly conducted market research will identify the kinds of new, improved products that consumers would switch to if they become available. That involves asking the right questions of the right people, and also placing a proper interpretation on their answers.

In the past, manufacturers produced products and then tried to sell them to consumers. Successful organisations find out what the consumer wants and then produce this product for them. This is done via research.

There are two main approaches to market research.

  • Qualitative research. e.g. working with several small focus groups comprising, for example, people who shave, and discussing with them what they look for in a razor/blades/shaving system. This generates a core understanding of HOW consumers use razors and what they think about the experience.
  • Quantitative research. e.g. using a questionnaire with a large,representative sample of people; this data gives a broad view of the information, looking more at the numerical objective data rather than the more subjective data acquired via qualitative research. For example, how many people shave, what do they use to shave, what products do they buy?

From consumer research the company moves into technological research and development. This involves converting a good idea into a product design and then discovering whether modern technology is able to reproduce it to the high specifications required and in the quantities needed.

Usually a firm will produce prototypes that can be test marketed on a representative sample of potential consumers. In the light of their reaction, the product can then be refined and developed until it is as good as it can be.

Within the original research and analysis, there is also another vital question which needs to be asked. "Will this proposed new venture generate profits for the company?" Many businesses have come unstuck by wrongly believing the answer to be "Yes". Usually, such businesses either underestimated the investment levels required for research and development, or the cost of setting up and operating the production process, or both.

Generally speaking, any business must be careful in estimating potential sales; some organisations may get into financial difficulties if they are overly optimistic in their planning which may result in them going bankrupt or being acquired by a better managed rival. Ironically, the rival may not be as creative but is better at managing their overall business.

A successful product will generally attract competition. Patents can protect products, but it is impossible to prevent other firms coming up with their own interpretation and application of the original good idea e.g. for self-adhesive labels, shavers, or subsonic aircraft.

In essence, the fact that competitors bring out products to challenge the original idea, is generally good for that category because the market becomes stimulated and total sales can increase. This is why product improvement through innovation in both concept and design has to be ongoing. This is also why Gillette have remained at the forefront of the shaving industry for the last century.

Properly conducted market research will identify the kinds of new, improved products that consumers would switch to if they become available.

Gillette | Developing new products