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Screening of New Product Ideas

product, product innovation, new products, new product ideas, marketing, sales, marketing management, product management

New products can come from many sources and through many kinds of individual with widely differing backgrounds. We can, however, think in terms of three main categories, as follows:
1. Products developed to fill a known 'gap' in the range of existing products available to meet a known need. An example would be the considerable development currently going on to produce an acceptable battery-operated car, to overcome the pollution problem created by the internal combustion engine and to achieve a more economical use of fossil fuels.
2. Products arising out of scientific research probably devoted originally to quite different ends, or from 'pure' research in pursuit of knowledge with no commercial end at all in view. One famous example is penicillin, whose effect was first noticed by accident during a study of many different moulds. Another is teflon-coating of cooking utensils, a 'spin-off' from research into heat-resistant materials for the U.S. space programme.
3. Creative ideas with no very logical origin. These range from a technical break-through departing from the orthodox approach (the jet engine, hovercraft) to more trivial and less technical but nonetheless useful ideas, such as oven-ready french fries, ready-planted flowering shrubs for 'instant gardening', and self-assembly 'knock down' furniture. Generally speaking, of course, it is products that are developments of existing ones which arise from a study of the marketplace and new technology which gives rise to products with high novelty. Viewdata ('Teletext') information displayed on home TV screens is still to some degree a 'product in search of a need' and there are many 'high-tech' products in a similar situation.

Finding Gaps in the Market

The aim here is to identify a need in the market and then find the product to fill it. There are three main approaches, as follows:
1. Examine other markets. Keep a close eye on international markets. If a product is selling well in the US it has a fair chance of also succeeding in other countries. Many of the products now established in the market were first developed in the United States, including ball-point pens, aerosol sprays, credit cards and 'finger-lickin' good' Kentucky Fried Chicken.
2. Segment the market. Since people do not have identical preferences, it is unlikely that one product will completely satisfy everyone. A new product that gains a large market share may therefore suggest the possibility of a number of market segments. Thus instant coffee was originally marketed with a single flavour, which was reasonably acceptable to most people; now we see the development of special blends — mild, bitter and so on — to suit smaller groups of people prepared to pay a premium price to obtain something that suits their personal taste more closely than the 'standard' flavour.
3. Gap analysis. This is a rather complex technique of examining products on the basis of how people view them — what people 'think' they are. For example, if people viewed all existing chocolate bars as crunchy, but said they preferred a soft bar, then a gap might exist for a new chocolate bar brand promoted as 'the soft one'.

Scientific Development

Achieving new products this way is a question either of a company maintaining its own research and development team or of it keeping closely in touch with development teams in universities, research establishments and worldwide publications carrying reports of technological development. The former method is much the more expensive, but can be more directly applied to the areas in which the company is interested.

Producing Creative Ideas

The previous two categories both rely on some kind of systematic search. But the creative approach is almost by definition not systematic. Here we are looking for a new departure rather than a logical development from what already exists. The main technique used to achieve this is known as 'brainstorming'. The essence of this approach is to assemble a group of people, preferably with widely different attitudes and backgrounds, and then encourage them to 'spark off' and produce a stream of ideas. In order to encourage the maximum number of new thoughts the following 'rules of the game' are applied:
1. All ideas are written down;
2. Negatives are ruled out; even obviously idiotic ideas must be allowed to stand, because they may suggest others;
3. No critical analysis is applied until after the brainstorming session.
Once the ideas are all recorded, they can be sorted critically and further consideration given to those that look promising.

The Business Analysis of New Product Ideas

Far too many ideas have money spent on their development simply because they do seem to be good ideas, that is to say they appeal to someone, who then becomes committed to them. Two main reasons for a vast proportion of new product failures can be pointed out:
1. Reluctance to terminate a project once a relatively early stage has been passed, and
2. Corporate arrogance — either simply about the product's quality or about the company's ability to use its 'marketing power' to sell an inferior product.'
The best way to avoid this temptation is to ask at a very early stage what is the likelihood of adequate profits accumulating if the product is successfully developed and launched? Crucial questions will include the following:
1. What is the likely demand and at what price?
2. Can the product be manufactured and distributed at a cost that will fit the price/demand situation and also yield a suitable profit?
3. What will be the yield of capital and manpower invested in this way as against the comparable return from alternative ways of employing the resources? (In economic language, what is the opportunity cost?)
Published: 2007-04-29
Author: Martin Hahn

About the author or the publisher
Martin Hahn PhD has received his education and degrees in Europe in organizational/industrial sociology. He grew up in South-East Asia and moved to Europe to get his tertiary education and gain experience in the fields of scientific research, radio journalism, and management consulting.

After living in Europe for 12 years, he moved to South-East again and has worked for the last 12 years as a management consultant, university lecturer, corporate trainer, and international school administrator

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