Handbook of Business-to-Business Marketing
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Handbook of Business-to-Business Marketing

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Edited by Gary L. Lilien and Rajdeep Grewal

This insightful Handbook provides a comprehensive state-of-the-art review of business-to-business marketing. It supplies an overview and pioneers new ideas relating to the activity of building mutually value-generating relationships between organizations – from businesses to government agencies to not-for-profit organizations – and the many individuals within them.
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Chapter 32: The Stage-Gate® System for Product Innovation in B2B Firms

Robert G. Cooper

Extract

32 The Stage-Gate® system for product innovation in B2B firms Robert G. Cooper The Stage-Gate® system has become the most widely used methodology for conceiving, developing and launching new products among B2B firms. Indeed, an estimated 70 to 75 per cent of companies that develop new products have implemented a robust ideato-launch system, such as Stage-Gate (APQC 2002; Cooper et al. 2005; Griffin 1997).1 The benefits of such a process have been well documented, and many well-managed B2B companies, such as Emerson Electric, ITT, Siemens, Corning Glass, BASF and 3M, have prospered and profited from using Stage-Gate. (Stage-Gate is trademarked, and thus it is known by different names: Emerson Electric and BASF call it Phase-Gate; General Electric uses the term Tollgate system; at Procter & Gamble, it’s called SIMPL; the US Army calls it TARGET; and the UK government uses the name Gateways). Benchmarking studies reveal that many firms still struggle with their new product systems and methodologies, though. For example, new products continue to have an alarming failure rate: of every nine new product concepts, only one becomes a commercial success, according to Product Development and Management Association (PDMA) studies (Adams and Boike 2004a, 2004b; APQC 2002; Griffin 1997). A review of many investigations suggests that about 40 per cent of new products fail at launch, even after all the voice of the customer (VoC) efforts, product tests and customer trials. And in only 21.3 per cent of companies do new product efforts meet annual profit objectives (Cooper et...

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