University of Otago, New Zealand

Innovation and New Product Development

by

 Jörg-Stefan Schöttler

Table of Contents

Executive Summary 1

1.0. Opportunity Identification and Selection 4

1.1. Company Background 4
1.2. Mission Statement 4
1.3. SWOT Analysis of Breville 5
1.4. The Market 6
1.5. Market Trends 6
1.6. Identified Consumer Need 7
1.7. The Product Innovation Charter 8

1.7.1. Focus 8
1.7.2. Goals and Objectives 8
1.7.3. Guidelines 9

1.8. Strategic Fit 10

2.0. Concept Generation 10

2.1. Idea Generation Techniques Used 10

2.1.1. Solving the Problem 10
2.1.2. Analytical Attribute Techniques 13

2.2. Concept Statements 13

2.2.1. Lock and Flip 13
2.2.2. Removing Strain 14
2.2.3. Elephant Sucker 14
2.2.4. Click and Drain 15
2.2.5. Sliding Vent 15
2.2.6. Netting Base 15

3.0. Concept Evaluation 17

3.1. The Full Screen 17
3.2. The Chosen Concept 17
3.3. Concept Testing 18

3.3.1. Purpose of the Concept Test 18
3.3.2. Concept Test Format 18
3.3.3. Selection of the Respondent Group 18
3.3.4. The Interviewing Process 18

3.4. A-T-A-R Model 19
3.5. Product Protocol 19

3.5.1. Target Market 19
3.5.2. Product Positioning 20
3.5.3. Product Attributes 21
3.5.4. Competitive Comparison 21
3.5.5. Augmentation Dimensions 22
3.5.6. Timing 22
3.5.7. Requirements 22
3.5.8. Potholes 23

4.0. Concept Development 24

4.1. Development of Concept 24
4.2. The Final Concept 25

5.0. Product Launch 26

5.1. Market Testing 26
5.2. Preliminary Financials 26

5.2.1. Income Statement 26
5.2.2. Cash Flow Statement 27

5.3. Launch and Marketing Strategy 27

5.3.1. Strategic Launch Planning 27
5.3.2. Launch Implementation 29
5.3.3. Launch Management 34

6.0. References 37

7.0. Appendices 38

Executive Summary

The following report details a proposal for a revolutionary new Breville product: a Click and Drain convenience pot. This report details the development of this innovative product from the initial Concept Development right through to a Financial Analysis and a Market Launch Strategy. Breville′s new Click and Drain convenience pot is an ergonomically designed product to make draining boiling water from pots both safer and easier. This is achieved by clicking off one of the two ergonomically designed handles to expose water-draining holes. The Click and Drain is crafted in brushed stainless steel, and is made with a Quantanium™ non-scratch, non-stick interior. The glass Cook and Look™ lid of the new Click and Drain pot can be locked on for further convenience and safety. The primary target market of the new Click and Drain pot is consumers who are aged between 17 and 40 and run busy, fast-paced lifestyles that restrict the amount of time available for meal preparation. They are likely to be employed full or part -time and are the consumers most likely to be setting up new homes, flats and apartments and needing to purchase kitchen equipment for the first time. These consumers would be motivated by speed and convenience. The increased safety of the Click and Drain over standard pots would be an added bonus. The Click and Drain pot would be launched primarily in New Zealand with the long-term potential for launch overseas if the New Zealand launch is a success. After a series of analytical tests it has been established that the Click and Drain pot would have a projected profit of $540,000 in its second year of production and $800,000/year after five years. The Net Present Value (NPV) of the Click and Drain pot would be $1,643,000 and it would have an Internal Rate of Return of 62%.

1.0. Opportunity Identification and Selection

1.1. Company Background

Bill O′Brien and Harry Norville based in Australia, operating in the radio business, founded Breville in 1932. With the increased competition due to the advent of TV manufacturing, the founders decided to sell the Breville Radio Brand in 1951 and enter in the small appliance business, instead. In the 60′s, John O′Brien, Bill′s son, founded the Breville Research and Development centre. The company has been built up on innovative design and product development.

The first products developed were kitchen utensils, such as Breville Snack′n′Sandwich toaster - considered a household institution, launched in 1974. By the 80′s, the company had established a trading centre in Hong Kong and was exporting products to 15 countries. Today, Breville is the market leader in Australia in small electrical appliances.

The company has three business units: "kitchen", "body" and "at home". The kitchen collections includes baking & roasting, blending & juicing, coffee and kettles, cooking & steaming, grilling & frying, processing and mixing, toasting & snacking. All the products are designed to be really useful, responding to the customer′s demand. As said by John O′Brien, "the ultimate appliance is one that gets used every day, not just a showpiece".

In 2001, Housewares International Pty Ltd (HWI), an Australian listed company, acquired Breville. More details about HWI and the acquisition can be seen in Appendix 1.

1.2. Mission Statement

Breville is to become New Zealand′s leading provider of branded house wares products, to be achieved through constant innovation and the development of products specifically targeted at everyday needs discovered in the marketplace.

1.3. SWOT Analysis of Breville

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