Marketing Management, Millenium Edition - epiheirimatikotita.gr

332DevelopingMarketingStrategies■ 3M Minnesota Mining and Manufacturing (3M) fosters a culture of innovationand improvisation that was evident at its very beginnings: In 1906 thedirectors were faced with a failed mining operation, but they ended up makingsandpaper out of the grit and wastage. Today 3M makes more than 60,000products, including sandpaper, adhesives, computer diskettes, contact lenses,and Post-it notes. Each year 3M launches scores of new products. This $15billion company’s immodest goal is to have each of its divisions generate atleast 30 percent of sales from products less than four years on the market. 7■■■■3M encourages everyone, not just engineers, to become “product champions.”The company’s 15 percent rule allows all employees to spend upto 15 percent of their time working on projects of personal interest.Products such as Post-it notes, masking tape, and 3M’s microreplicationtechnology grew from 15 percent-rule activities.Each promising new idea is assigned to a multidisciplinary venture teamheaded by an “executive champion.”3M expects some failures and learns from them. Its slogan is “You haveto kiss a lot of frogs to find a prince.”3M hands out its Golden Step awards each year to the venture teamswhose new product earned more than $2 million in U.S. sales or $4 millionin worldwide sales within three years of its commercial introduction.Table 2.1 shows how a company might calculate the cost of new-product development.The new-products manager at a large consumer packaged-goods company reviewedthe results of 64 new-product ideas. Only one in four ideas, or 16, passed thescreening stage. It cost $1,000 to review each idea at this stage. Half of these ideas,or eight, survived the concept-testing stage, at a cost of $20,000 each. Half of these,or four, survived the product-development stage, at a cost of $200,000 each. Half ofthese, or two, did well in the test market, at a cost of $500,000 each. When these twoideas were launched, at a cost of $5 million each, only one was highly successful.Thus the one successful idea had cost the company $5,721,000 to develop. In theprocess, 63 other ideas fell by the wayside. The total cost for developing one successfulnew product was $13,984,400. Unless the company can improve the pass ratios andreduce the costs at each stage, it will have to budget nearly $14 million for each suc-