Master’s Degree in Marketing e Comunicazione Final Thesis The Launch of a New Product: from the NPD Models to the Luxury World with the Ferrari S.p.A. Business Case Supervisor Ch. Prof. Tiziano Vescovi Graduand Gabriele Cusumano Matricolation Number: 989665 Academic Year 2018 / 2019 ‘A mio Nonno, mio padrino e forza dal cielo’ 2 Index Abstract ................................................................................................................................................ 6 Introduction .......................................................................................................................................... 7 Chapter 1 - Literature Analysis: the New Product Development Models ......................................... 12 1.1 - Evolution of the NPD Models ................................................................................................ 13 1.1.1 - The Stage-Gate and Activity-Based Models ................................................................... 14 1.1.2 - The Simultaneous/Overlapping Stage Models and the Spiral Development Processes .. 17 1.1.3 – The Interactive or Network Models ................................................................................ 19 1.2 – The most important Stage-Based Models ............................................................................. 22 1.3 - The Booz, Allen and Hamilton NPD Model .......................................................................... 26 1.3.1 - Stage 1: New Product Strategy (NPS) ............................................................................. 26 1.3.2 - Stage 2: Idea Generation ................................................................................................. 27 1.3.3 - Stage 3: Screening and Evaluation .................................................................................. 28 1.3.4 - Stage 4: Business Analysis .............................................................................................. 28 1.3.5 - Stage 5: Design and Development .................................................................................. 29 1.3.6 - Stage 6: Testing ............................................................................................................... 30 1.3.7 - Stage 7: Commercialization ............................................................................................ 30 1.4 – The revised BAH Model ....................................................................................................... 31 1.5 – The risks of the NPD Models ................................................................................................ 33 Chapter 2 - How to launch a new product in the today’s world ........................................................ 35 2.1 - Stage 1: New Product Strategy (NPS) ................................................................................... 36 2.2 - Stage 2: Idea Generation ........................................................................................................ 38 2.2.1 - Stage 2: Idea Generation - Opportunity identification .................................................... 39 2.2.2 - Focus: Idea Generation techniques .................................................................................. 40 2.3 - Stage 3: Screening and Evaluation......................................................................................... 42 2.4 - Stage 4: Business Analysis .................................................................................................... 44 2.4.1 - Stage 4: Business Analysis – Focus on economic evaluations ....................................... 45 2.4.2 - Stage 4: Business Analysis – Focus on financial evaluations ......................................... 47 2.5 - Stage 5: Design and Development ......................................................................................... 49 2.5.1 - Focus: Conjoint Analysis ................................................................................................ 52 2.6 - Stage 6: Testing ...................................................................................................................... 55 2.6.1 - Stage 6: Pre-test Market .................................................................................................. 58 2.7 - Stage 7: Commercialization ................................................................................................... 59 2.8 - The Adoption Process ............................................................................................................ 62 3 2.9 - Key factors to product effectiveness ...................................................................................... 64 2.10 - Product Lifecycle ................................................................................................................. 65 Chapter 3 - How to launch a new product in the luxury industry ..................................................... 69 3.1 – The luxury world ................................................................................................................... 70 3.1.1 – Stage 1: NPS through the Balance Scorecard (BSC) ......................................................... 72 3.1.2 – Stage 2: Idea Generation .................................................................................................... 74 3.1.3 – Stage 3: Screening and Evaluation ..................................................................................... 77 3.1.4 – Stage 4: Concept Development and Testing - the Unique Selling Proposition (USP) ....... 80 3.1.5 – Stage 5: Business Analysis through DSS (Decision Support System) ............................... 83 3.1.6 – Stage 6: Design and Development according to the VRIO Model .................................... 86 3.1.6.1 – Stage 6: Focus on The House of Quality (HOQ) ......................................................... 89 3.1.7 – Stage 7: Testing the marketing mix .................................................................................... 91 3.1.8 – Stage 8: Commercialization ............................................................................................... 94 3.4 – The Product Lifecycle in the luxury industry ........................................................................ 96 Chapter 4 – How to launch a new product in the luxury automotive industry: the Ferrari S.p.A. Business Case ..................................................................................................................................... 99 4.1 - The automotive industry ...................................................................................................... 101 4.2 - The luxury automotive industry ........................................................................................... 105 4.3 - Ferrari S.p.A. ........................................................................................................................ 108 4.3.1 - Premise .......................................................................................................................... 110 4.3.2 - The core dimensions exploited by the Prancing Horse ................................................. 112 4.3.3 - The evolution of the process ......................................................................................... 117 4.3.4 – Financial and economic considerations of the process ................................................. 123 4.4 - A real case: the Ferrari’s 488 Family ................................................................................... 126 4.5 - The winning elements of Ferrari S.p.A. ............................................................................... 131 Conclusions ...................................................................................................................................... 134 Bibliography..................................................................................................................................... 142 Sitography ........................................................................................................................................ 145 Acknowledgments ............................................................................................................................. 149 4 5 Abstract This thesis focuses on the launch of a new product in multiple contexts, by assuming a funnel structure that starts from a wider view and it ends on a very specific reality. The introduction summarizes the most relevant factors capable to highlight the importance of the main topic: social and historical evolution, together with macroeconomic evaluations, provide support in order to understand why the launch of a new product is a daily critical matter. The first chapter discusses the literature review of the thesis: by starting from the NPD models depicted during the last 50 years, the focus shifts from the evolutions of these processes to the identification of one ‘universal’ approach: the Booz, Allen and Hamilton (BAH) model. The second chapter is dedicated to the BAH process just identified: it explains why this model may be suitable in the mass-industry, no taking into account differences arising by the nature of the sector or specific companies. The third chapter shifts the focus towards a more specific context: the luxury industry. A rapid overview helps to understand the dynamics of this particular world, before to investigate the process of development of a new product by re-adapting