From Concept to Consumer: How to Turn Ideas into Money

Citation

Bicen, P. (2010), "From Concept to Consumer: How to Turn Ideas into Money", Journal of Product & Brand Management, Vol. 19 No. 3, pp. 233-234. https://doi.org/10.1108/10610421011046210

Michael Porter once said that innovation is the central issue in economic prosperity. When we think of today's stumbling economies, we have no choice but to agree with Porter. Developing innovative and meaningful products is essential to economic growth that enables consumers to prosper over the long run. Apple iPod, Apple iPhone, Amazon Kindle, Tablet PCs, and numerous other innovative products changed consumers' lifestyles. It is also the fact that in highly competitive business markets companies are under tremendous pressure to turn their creative ideas into meaningful products in a very short time because of the shortened product life cycles, costly research and development activities, empowered consumers, and global competition. How easy is it to turn ideas into tangible products? What are the steps involved in this process? What is the role of a creative idea in new product development process? Answers to these and to many more questions can be attained by reading From Concept to Consumer: How to Turn Ideas into Money, a true guide on getting creative product ideas into markets by Phil Baker.

Phil Baker is a renowned expert on all areas of new product development (NPD). He has more than thirty years of experience in doing business with Far East companies and building strategic partnerships with them. He has played essential roles in developing breakthrough products, technologies, and strategies for top‐tier companies.

In the book, Baker discusses a wide range of new product development (NPD) activities that involve everything from engineering to product management to distribution to marketing. The unique selling proposition of this book is that, though there are many books in the market regarding NPD, many zoom into one part of the process and, only very few of them delve into real‐life examples. Baker has had many years of experience in globalized NPD processes, and he perfectly incorporates his first‐hand experiences into procedures and theories.

The book has ten chapters that follow a very logical order. Chapter 1 is the snapshot of the overall book. The basic lesson of the first chapter is that “the invention is often just 5 percent of all the factors for success” (p. 1). Baker gives examples about how some creative ideas could not succeed in markets, and he elaborately explains the reasons behind these failures. He discusses the new rules of NPD such as parallel processing of the departments, virtual teams, platforms, and systems rather than devices. He concludes the first chapter with a teaser of why so many companies have started doing business with Asian companies. He gives a detailed answer to this question in his following chapters.

The take‐away from chapter 2 is to “be as innovative in the development process as in the invention process” (p. 15). Shortened product life cycles force companies to come up with innovative business processes such as matrix organization styles with small, manageable NPD teams. One striking moment when I was reading this chapter was Baker's advice on including the manufacturer in the NPD team. General understanding is that manufacturers are supposed to produce whatever is given to them. “Involving the manufacturer right from the beginning ensures that there [is] no need to go back later and make changes … Knowing your customer is coming causes the factory to better prepare and be more attentive to your needs” (p. 18). I believe this is one way to be innovative in the development process. Another fascinating lesson that can be learned from this chapter is that many companies fail because they want to come up with a perfect product, which cannot be simultaneously compatible objective with being fast to market. As Baker notes, “you learn most about the product after it gets into the hands of customers. You can guess, debate, hypothesize, but you really don't know until then” (p. 29).

Chapter 3 is about the development and marketing phases of NPD. After all, “no matter how well engineered, no product is truly successful if it doesn't meet the needs of those willing to pay for it” (p. 31). Baker briefly discusses the basics of development by dividing its phases into five parts:

1. 1.

   Concept design.

2. 2.

   Design development.

3. 3.

   Detailed development.

4. 4.

   Preproduction.

5. 5.

   Production.

Then, he emphasizes the essential role of a market requirements document (MRD) and how it becomes a bridge between engineering and marketing. The most exciting part of the chapter to me is the “cost” section. By the end of the chapter, you learn how a product that costs only $18 is sold for $100, and still the company makes only $27 profit. Interesting story: do not miss it!

Imagine yourself in Best Buy looking for a camera. Technical functions of the camera are important to you. How about appearance, aesthetics, and usability? Are you willing to pay a bit more to get a better looking camera? In chapter 4, Baker discusses industrial design (ID) matters and how ID provides a competitive edge to companies, providing his first‐hand experiences in ID in an elaborative and interesting fashion.

Innovative companies have realized that efficient and effective NPD would only be possible at a reasonable cost if they shared the risk with partners. In chapter 5, Baker discusses the outsourcing issue, giving examples from Taiwan and Mainland China. According to Baker, though cost is higher than China, Taiwan is considered exceptionally strong in designing, engineering, and manufacturing. He also provides conditions under which outsourcing is a smart decision to go for. A lesson that can be learned from this chapter is that there are many misunderstandings about doing business with Fast East companies, and Baker provides clarification to many of them.

Chapter 6 is the continuation of chapter 5 regarding the partnership issue. Here, Baker summarizes the competitive advantage companies can get from partnering with Asian companies. He provides ways to find the most compatible company that can complement the resources and competences of the target company. In addition, he also describes the process that a target company can use to be sure of the manufacturing quality and costs, basically taking his audience into an adventurous journey where he has invaluable experiences.

In chapter 7, Baker picks the developed products in markets and elegantly describes the marketing stage of the NPD. The main thesis of this chapter is that best companies always respect what customers may need, and such firms value their preferences. He is the advocate of customer feedback in early stages, while recognizing that highly innovative products may not adequately be understood by consumers at the beginning. Therefore, visionary leaders should go with their instincts and “defy conventional wisdom” (p. 98). In order to inform customers and educate them regarding the new products, Baker succinctly summarizes the basics of integrated marketing communication and gives advices to companies to focus on the unique selling proposition of their new products. He eloquently gives real‐life examples about the counter cases where failure was inevitable.

Chapter 8 is the “place” dimension of the marketing concept: distribution. Baker defines and describes different ways to make the new product available to consumers. Companies should find an optimal way to make their products visible to consumers without increasing the cost to consumers and reducing the profit for themselves. However, we understand that it is a very challenging mission, “each time someone touches [companies'] products, [they] incur a cost” (p. 113). In a detailed example, a product that costs $12 to manufacture with $7 profit has a retail price of $50 (e.g. $31 goes to intermediaries, wholesalers, and retailers). He also discusses other cost‐efficient ways to bring products into markets, such as internet sales, licensing, and partnering with a marketing company that has an established distribution network.

Chapter 9 is maybe the only “do not” part of the book. In this chapter, Baker mainly discusses the conditions under which legal advice is most meaningful. He attracts his audiences' attention to issues that do not need immediate legal cautions, giving the basic advice that “a successful relationship is based less on having tight legal agreements and more on finding a company with high integrity” (p. 127). Baker provides his first‐hand experiences regarding the most frequently asked questions such as patents, intellectual property rights, agreements, and contracts. Many of these examples are counter‐intuitive and definitely striking!

The final section, chapter 10, wraps up the whole book and provides important snapshots from each of the previous chapters. His advice here is valuable, tangible, first‐hand, real, up‐to‐date, actionable, and effective. In today's chaotic business world, in order to succeed, companies should always look forward and be smart in their NPD processes. When it is thought that new products are the nexus of competition, there is no better way than learning from mistakes, especially from people who already went through the hard and challenging paths of NPD process. “After all, life is about learning, and there's clearly no better way to learn taking one of [Philip Baker's] trips from concept to consumer” (p. 148).

Overall, this book is fascinating and the best book I have ever read about new product development. It is written for entrepreneurs, R&D and NPD managers, academicians who conduct research about NPD and innovation and teach in the classroom, and students who take NPD and product management classes. I myself added the book to the reading list of my new product development class syllabus. It is definitely an essential reading for marketing scholars and practitioners and, therefore, strongly recommended!