8. Product Development Objectives

A key element to a successful product definition is achieving an understanding of product development objectives. Analysis of product development objectives fulfils the following purposes: it allows the product development organisation to satisfy itself that it is competent to achieve the business objectives before initiating product development activity; it enables the product development business to assess whether the product will produce real business benefits; it allows esoteric marketing requirements to be cultured with business objectivity.

Objectives Identification

Most organisations provide little assistance to the analyst to identify product development objectives. The difficult aspect of objectives identification is that they are frequently unstated in any formal sense. Consequently the analysts first task is often to formulate and articulate the objective.

An objective should comprise the following elements: identity of the statement owner, the required action, the object of the action, the condition of achievement or critical success factor.

The statement owner may be one of three general categories: stakeholders, stewards and executives.

Stakeholder Objectives

A stakeholder in the development process is typically someone or some group that will benefit or lose by the outcome of the new product development. Typically stakeholders come from outside the product development organisation. They can include: Investors, clients, customers, users, suppliers, consultants, agencies, distributors, dealers, competitors, regulatory agencies, politicians, installers, maintainers, publishers, printers, exhibition organisers, press, standards organisations, industrial associations, etc. Typically they will impose economic or social constraints or requirements on the product.

Stakeholder requirements manifest themselves as, for example, required rate of return on investment, required margins, performance or safety requirements. Whilst these are typically generic requirements their influence on the product definition must not be ignored or trivialised.

Rate of return on investment requirements for example play a major role in determining the economic feasibility of a new product and go a long way towards establishing minimum pricing levels. Distributor's margin requirements influence greatly the end user pricing of a product, therefore indicating demand levels or cost targets depending on which influence is more important to the business.