INDUSTRIAL AND ENGINEERING CHEMISTRY
April 1951
product. H e indicates his decision by completing a form called, “Sotice of Decision.” S e w products are usually approved for ,‘trial sales” initially until sales esperience proves them vorthy of taking a permanent place alongside the other members of Pennsalt’s family of product*. Approval for trial sales is indicated on the notice of decision, arid a limit as to the length of time of the program before reauthorization and quantity of material is defined. On approval of the transfer to the salrs division, the market research division suhmits a complt>te rcport of its activities during market development. This report is in great detail slid covers all technical and economic factors. I t also includes a list of the customers who were contacted m d their reactions t o the new product. T h e main purpose of this report is to supply the snles division with the information it needs t.0 sell the new product effectively. The break from market research to sales is not it sharp one. .Uthough the transfer of responsibility takes place almost inimediately, the market research division activity decreases gradu:illy as the sales division’s increases. >[embers of the research and developnient division and the market research division act as consultants during the change-over period. I t is also possible that the market research division may continue with market development of the product for uses which have not yet been firiiily established. Acceptance for Commercial Status
When the trial sales time limit has e s p i r d or the allowed quantity has been sold by the sales division, performunce is reviewed by m:trket research and summarized in a brief report to the vice prwident of sales and other top esecutives and the sales manager supervising the trial program. If sales results during the trial sales program indicate that the new product is ready for pcrmanent addition to the company’s product line, a new product authorization request for commercial status is submitted. This request is processed in the same manner a*j the request for trial sales. However, more is known about the product at the end of the trial period. Information on manufact,uring costs, Felling expenses, selling prices, trade practices, product acceptance, profit margin, and the many other new produrt ronsirlerri-
C. P. NEIDIG,
843
tions have been learned by the trial sales experience. The market research report submitted at this time is more factual, hut it u still condensed into a maximum of two pages. Commercial status will not usually be granted if there are any questionable aspects such as lorn profit margin, unproved performance or product :Lcceptance, iiisufficieiit volunie, or other doubtful features. Trial sales authorization would continue to he rcnencld until the product is rc:ad>- for commercial status or
abandoned. Oncr conimc~rcialstittiis has twen :tpproved the product no longrr receives the “new produc*t trcutmeiit~.” I t takes its plac*e
among Pennsdt’s other item- 2md m:inagemeiit rrccivrs reports on its performance pt~riot1ic:illyalong with othilr product.;; it is judged almost entirc,ly 0 1 1 its sales and profit voluinci. Request for Commercial Plant
.\s the sales volume increases further, the scmicominervial
plant rventunlly will twcome inadequat.c and a full s c d e plant is needed. An appropriate request, is then submitted by the manufacturing division. This requwt is processed in the siziiic~rnanrier :LS that for :t pilot plant under Pennualt’s appropriation request procedure. \Vhi,n the comnicrcial plant is requested, many more facts are avail:tt)le for analysis of thc. request than w : r e \\-hen the pilot plant approprintion w a s consid~red. Becausc. t,hr investment is much grpatc’r and more permarleiit in nature, tht: appropriation for commrrcial plant receiver very careful scrutiny, and all factors are examined thoroughly. Although :I great amount, of study is made, the results are again summarized into B tiyo-page report to the president as Ivith the pilot plrtnt rqiicwt. On completion of this market research report and approv:il of the new plant by the board of directors, the product h u passed its last appraiad point and is no longer considered a (‘nt*w’’ product. The profit that it returns is the reward that justifiw all the effort and espense that wrre expended during lalmratory and commercial dwelopment. Literature Cited
(1) Dnries and Collins, Chem. IndJ.. 56,T o . 6 , 949 53 (June 19431 R L C E I V L DSeptember 11, 1950
The A t l a n t k Refining Co., Philadelphia, f a .
-4s the ultimate ohjectite in the debelopnient of new chemical products is to create sales, it is important that customer contacts, including field interviews, be made as early as possible after introduction of the product. Initial field contacts are made on a limited scale when sample quantities are available. During this stage, market
potentials are determined and necessary product impro\ements are made. As much technical and useful inforiiintion as is available is given to prospective custoniers. .4fter wide sample distribution, frequent follow-ups, preferably field contacts, are necessary to push the n e w product from development to larger scale sales.
NEW PRODUCT INTRODUCTION Field Interviews S E of the most important steps in the development of neiv
0
chemical products is the field interview. The saying, “Build a hetter mousetrap and the world will beat a path t,o your door,” may be true t,oday, but chemical companies cannot afford to wait for this acceptance. Entirely too many companies are taking their ”better mousetraps” t o the consumerlint waiting for the consumer to come to them. Thus, field inter-
v i c w have become a bmic function in developing and markeb ing new or improved cheniical products. It is often inipomible to determine where the idea for a new product or group of products originates. Sometimes it begins in research laboratories where chemists are continually synthesizing new products and may develop one with unique properties. At other times, the impetus may come from the sales department
844
INDUSTRIAL AND ENGINEERING CHEMISTRY
or from a customer who has an application which requires the tic%velopment of a new product for the satisfactory solution of ii problem. This latter source can only be tapped through este1isiT.c. discussion in the field with the customer’s laborator)- personni.1. Regardless of the origin of the new product, there are certain logical steps which normally occur during it,s development. I,rt us assume t h a t preliminary research work on production has I)CY,II completed, and a process has been developed to the point whcrc~ sufficient material for sample purposes has been prep:iretl. Many hours may have been spent in deciding just d i c n initial samples should be sent out, and procedures have heen establiPhet1 for sampling and for collecting use data. There are t w o distinct procedures t h a t m a y be used in the treatment of nvw products at this stage: One is t o do a vast amount of application rzsearch work within the parent company and file as many patents as possible covering all possible end uses as a protection for the s d c s department so no future market can be controlled bj- competitive patents. I n direct contrast, many companies publicly announce a new chemical, give a few physical properties, list sonie possil)le end uses, and hope t h a t custoniers will do sufficient research work on their own t o develop a need for the product. There is much t o b e said for and against each of these methods and, in fact, the majority of new products are given a “middle of the road” treatment. This normally involves selective sampling on a limited scale without advertising, coupled with Eome application work in the producer’s laboratory ( I j. One of the principal purposes in sampling outside companies during the early development of a product is t o determine whether the produrt has any potential usefulness as is or whether niodifications must be made. One important truth must always be kept in mind : Regardless of how important a new product ma)- look in the eyes of the inventor or research chemist, it has no commercial value until someone buys it. And unless purchases increase anti are followed by purchases of other companies, the entirc project has failed. Therefore, the success of the project depends on the reaction of the customer, and it is vital t h a t contact be made as soon as possible. I t is generally advisable t o select only a feIv companies to n.ork with during this period of development. If ten companies are sampled and each suggests different changes, the laboratory malnot be able t o keep pace with the over-all development program. Before actually contacting the companies t o be sampled, all important inforniation on the new product should be collectcti. Such physical and chemical characteristics as are pertinent should be assembled on a d a t a sheet which can be left with the customer or sent to t h e customer in letter form. Formal technical d a t a sheets are not indicated here because the product may undergo complete change dependent on the results of thesc pwlimiriary field interview. Usually field discussions are carried out by markct deYclopmcut or sales development personnel (Zj. Actually these nien are acting in a liaison capacity between the manufacturer’s product dcvelopment group and the customers’ research staffs. The market development man is conveying technical information on the new product n-hich has been developed by his research 1abor:rtory t o the research laboratory of the customer. H e must keep in close touch with the work done on this new ,product by the customer and must, report all findings back t o his oivn laboratory. This transfer of information between the two companies is most important and represents an integral step in the development of the new product. This particular developmental process is slow and time-consuming, becawe in approaching a customer with a new product the manufacturer is asking the customer t o spend not only a part of his development budget on the n e x chemical but, \That may be even more valuable, his development time. And it must be remembered t h a t other chemical companies with new products are trying t o initiate customer research worli-a conipetitor may h a w R ne\T material readily available at 1015- c o d , n-hrreas another
Vol. 43, No. 4
is available in research quantities only a t an unknown fiiial ~irice. It matters not that the two products are dissimilar. IThat is important to consider is t h a t the customers’ research chemists c m only do so much work, and they will be more inclined t o wxk 011 a product t h a t can be purchased easily than one that may be years away from comniercial production. -it a recent meeting of the Commercial Cheniical Development Association, Harry bIcClure of Carbide and Carbon Cheniicals Division was presented the first annual award of the association. I n his acceptance speech he outlined some of Carbide’s recent developments : some seventeen chemicals were advanced t,o tank car status in the past 2 years; the average time from “test tube t o trink ray’’ for these cheniirals mas 5 . 5 years, ranging from :I rriirii~nuniof 1 year to a maximum of 12 years. During mu(,:i ( ~ i this time the product was undoubtedly “on the shelf” in the customer&’development laboratory waiting its turn. This t l i f ficult period taxes the ingenuity of market developnieiit men. I t also makes it imperative t o have new products introduced at I W quent intervals so that some are in each of the various stage,. ot development a t all times. T h e companies that are contacted for preliminary appraisals i i i variably suggest modifications or changes t h a t will make the product more useful to them. Some suggestions mill be practical, some definitely uneconomical, and some will be easily attainetl whereas others will require the development of an entirely new product. .ill suggestions must be appraised with a distinct view of the market possibilities of the changed product. For example, one customer might have need for a more highly purified product. On closer examination, it is found t h a t this represents a market for a few hundred pounds a year, b u t the over-all market is measured in millions of pounds. I n such a case, i t probably will not be economical t o produce the purified product unless a high premium price can be obtained. After the research and developnicnt departments have reviewed potential customers’sugyestions for modification of the new product, those changes are made which fit into a practical program, arid sample quantities of the modified product are made availnlilc. .igain these samples are tnkcn into the field, along with any further information which has been developed. T h e same coinpaniei are revisited with a view to1vard determining ivhether the chunges adopted have now made the product acceptnl)le. Frequently se ~1 cycles of cust,onicr evaluation followed by product rhmges vi11 tir necessary I)c~i’orc~ there are indications that the final product has been prepared. I n the latter stages, ariditio~i:d cu$tomcr companies are often contact,cd to make cer11 be acceptat~lct o its large a segment of ppnrent that the new product will have some s p e d field of utilization, additional application research should be done by the producer’s research laboratory. T h e primary purpose of this w ~ r kis to develop use informatinn that will ist in thc s:iccessful introduction of the product O I I a uider scale. Generully speaking, it is better to gather application inforrn:ttion on a wide range of subjects than it is t o spend this time developing one or tn-o applicationa. T h e latter procedure would be prefer:ilJlc if it were possible to predict in advance what would he t l i t a most important use for the nery product: rarely c:m this be done. S e w product iritrotiurtion, i n a normal development program, I ye:w frnin the time the first research wurk is done until the research and market development groups agree that the product is re:dy for large scale sampling. Before this step is talien a11 possilile product and application information should be accumulated and a data sheet prepared. I t is generally preferable t o have this data sheet printed as i t will probably be sent t o a relatively large number of companies, and a neat, printed data sheet will create a much better impression than a mimeographed one. The question of advertising the new product has been discussed already (3). Proper advertising is of real value in the suc-
April 1951
INDUSTRIAL AND ENGINEERING CHEMISTRY
cessful introduction of a new product, and it is probably the most economical and t h e quickest and easiest method of calling your neiv product t o the attention of the chemical industry. Soine oi the available technical information concerning the new product with a list of possible applications should be includcd in the advertisement. T h e inherent curiosity of the research chemist will be niaiiifested when he sees the announcement advertiselllent. T h e flood of sample requests usually starts early and continually grows, if your new product has many unusual Characteristics. It is essential t h a t sufficient material b e made available for samples and, of even more importance, t h a t facilities are available for continuing the pro(luct,ion of samples. Usuall>- a covering letter is sent ackno\vIedging receipt of the inquiry, advising t h a t the sample is being sent, enclosing the technical d a t a sheet, giving prices and availability information, and what is most importantoffering technical assistance. Simultaneously, i t is often advisable t o arrange field interview with companies in the same industry as those which earlier participated in the small initial sample program. This preliminary work has shoivn a definite application, and i t should be followed u p strongly. These fields xi11 usually be easier t o develop because application research has been done and a use for the new product has been developed. Thus, information is available which is of r e d assistance t o the prospective customers! research group. T h e importance of this type information cannot b e emphasized too strongly. .la previously mentioned, important though this new product may look, it has no value unless sales are made. S o t just initial sales b u t continuing and increasing sales. It sometimes happens t h a t a research chemist n4ll request a sample, develop the appli(,:ition, and order the nmv product entirely without contact or
technical assistance from the company offering the new product, This is it rare occurrence, for most frequently sales only result after re1;itively long periods of time during which there have !)eel1 frequent visits hy the market development man t o the prospective customers' 1alior:itories. After a sample has been sent, if sales :ire to be achieved, it is absolutely essential t h a t it be followed u p liy perjonal visit, phone call, letter, follow-up form, or siniilar (1t.vic.e. Obviously a personal visit on the part of the market tlrvelopment inan is preferred, but often this is impractical ani1 anothrr method must he used. T h e period which follo~vsthe sampling of a new product is :L most important one, and the success in this stage actually deteri n i i i w the ultimate success of the project. Sales cannot be ni:ictc: until the customer has been convinced t h a t a new product is better or more economical, or both, than the product he is curreritlj. using. Or perhaps the customer must be convinced that tlic n ~ \ v product v\ill enable him t o market, a new product which will illcrease his sales. T h e key points in this saleP program are the f i c ~ l i i interview, n-here technical and use information is transferred l)ct w e n tn-o cooperating organizations. I n the final analysis, it is principally the performance characteristics of a neIv product coupled with value t h a t dekrmine whether sales are to he ni:ttie. T h e ultimate success of the nen- chemical product is also in large measure dependent on the success achieved in field interviews, which ensure the initial aiid continuing evaluation of the protiric,r, so essential if its maximum use is t o be realized. Literature Cited
(1) hries, R. S.,and Copulsky, William, ISD. ENG. CHEM.,4 3 , 860 (1951). ' 2 ) S a d l e r , G . E., Ihid., p . h34. t3) Rogers. J. M., I h i d . . p. S55. R E C E I V ESe:iteniber D 11, l < J , j O ,
JAMES R. DUDLEY AND JASON M. SALSBURY', American S e w products which hale not been commercially available are often introduced by distributing information on them as widely as possible with the object of developing uses through application research by potential buyers. The technical data sheet offers one of the best media for dissemination of this information. Its form and content vary depending on the laboratory and market deveIopment resources available and on the nature of the product and
845
Cyanamid Co., N e w York,
N. Y.
the extent to which uses arc known. The methods eniployed in a large laboratory for collecting data on such products from literature sources and from research and development laboratory reports are discussed. The procedures used for correlating and editing this informatioii are described, and recommendations are made regarding the type information that should be included in preliminary data sheets and in more elaborate bulletins.
TRANSLATlNG LABORA TORY DA TA INTO NEW PRODUCT LITERA TURE HERE are t\vo bro:id ~ I : I S W F of nen- products. One class ineludes those chemicals ncn- t o an individual company but which are available from other sources. This discussion, however, is limited t o t h e second category which is coniposcd of products not previouslv available coninierciallv. These materials are usually introduced because they can fill a definite need or bec a m e of their ease of manufacture from available ran- materials. In the latter case, products are often introduced by distributing information on them aq n idrl3- as possible with the object of devcloping uses through application research b y potential users. T h e distribution of information is perhaps the most important factor in successful d e v e l o ~ n i ~of ~ na tn e w product of this type. It
T
1
Present address, .4merican C'yana:iiid C o . , Stamford, Conn.
is oril>~through the potential user's knon-ledge of the proprsrrit. of the product t h a t the fiwt stcps are taken which lead t o eveiitu:ll use. Purpose o f N e w Product Literature
Of course, the ideal way t o supply information is through presentations to pot,ential users by rep,resentativeswho have adequate knowledge of the properties of the product and the ability t o make concrctc suggestions regarding its use in each possible application. But i t is not :il\vays possible on a practical basis t o supply adequate information t o the field in this manner, since i t may l)e physicall? impossible for a field staff t o contact all potential users of a n e n product. T h e fields of utility cannot al-
