by Norhaniza Abdul Latiff Consumers Informally monitor potential
by Norhaniza Abdul Latiff
Consumers Informally monitor potential ideas and needs. Formally arrange for consumers to express their opinions. Existing Products and Services Analysis uncovers ways to improve offerings that may result in a new product or service. Distribution Channels Channel members can help suggest and market new products.
Sources of New Ideas (cont. ) Federal Government Files of the Patent Office can suggest new product possibilities. New product ideas can come in response to government regulations. Research and Development A formal endeavor connected with one’s current employment. An informal lab in a basement or garage.
Focus Groups A moderator leads a group of 8 to 14 participants through an open, in-depth discussion in a directive or nondirective manner. An excellent method for generating and screening ideas and concepts.
Methods of Generating New Ideas (cont. ) Brainstorming Allows people to be stimulated to greater creativity. Good ideas emerge when the brainstorming effort focuses on a specific product or market area. Rules of brainstorming: No criticism. Freewheeling is encouraged. Quantity of ideas is desired. Combinations and improvements of ideas are encouraged.
BRAINSTORMING An intuitive method of generating concepts. The overall goal is to obtain several concepts that might work. All team members are encouraged to be open and uninhabited during the early sessions. No need to adhere to product specifications, focus on the functional needs of the product. The primary advantage of brainstorming is the ability of set of individuals to collectively build on each other to generate new ideas that would not arise individually.
BRAINSTORMING Some guidelines for brainstorming session; Select a group leader, to prevent judgments and to encourage participation by all. Form the group with 5 to 15 people. Do not confine the group to experts in the area. Individuals could come to the session with a set of ideas. Limit the brainstorming to 45 minutes. Do not include bosses, managers or supervisors in the group. 8
BRAINSTORMING Memory Map – the group leader is responsible for recording the brainstorming session UC Berkeley, ME Dept Ken Youssefi 9
BRAINSTORMING Summarize the results of the brainstorming (Example) UC Berkeley, ME Dept Ken Youssefi 10
Methods of Generating New Ideas (cont. ) Brainwriting A form of written brainstorming. Participants write their ideas on special forms or cards that circulate within the group. Problem Inventory Analysis Consumers are provided with a list of problems and are asked to identify products that have those problems. Results must be carefully evaluated as they may not actually reflect a new business opportunity.
IDEAS, CREATIVITY AND INNOVATION Creativity The ability to make or otherwise bring into existence something new, whether a new solution to a problem, a new method or device, or a new artistic object or form. Innovation 1 : The introduction of something new 2 : A new idea, method, or device Creativity = Idea + Action Innovation = Creativity + Productivity Innovation = Idea + Action + Productivity
Run informal sessions with customers Allow time off for technical people to putter on pet projects Make customer brainstorming a part of plant tours Survey your customers Undertake “fly on the wall” research to customers
Use iterative rounds with customers Set up a keyword search to scan trade publications Treat trade shows as intelligence missions Have employees visit supplier labs Set up an idea vault
Observe customers using product Ask customers about problems with products Ask customers about their dream products Use a customer advisory board or a brand community of enthusiasts to discuss product
Types of Innovation Breakthrough Fewest number of innovations. Establishes the platform on which future innovations in an area are developed. Should be protected by patents, trademarks, and copyrights. Technological Occurs more frequently; not at the same level of breakthrough inventions. Offers advancements in the product/market area. Needs to be protected.
Innovation (cont. ) Ordinary Occurs most frequently. Extends a technological innovation into a better product or service or one that has a different market appeal. Usually come from market analysis and pull, not technology push.
Innovation (cont. ) Defining a New Innovation (Product or Service) Newness can be: In the consumer concept. A change in the package or container. Slight changes or modifications in the appearance of the product. (Industrial market) Companies also add products to their product line that are already marketed by other companies; products are new to the manufacturer but not the consumer.
Innovation (cont. ) Classification of New Products Consumer’s Viewpoint The continuum proposed by Thomas Robertson is based on the disrupting influence that use of the product has on established consumption patterns. Continuous innovations. Dynamically continuous. Discontinuous innovations. This approach is consistent with the marketing philosophy that “satisfaction of consumer needs” is fundamental to a venture’s existence.
NEW/IMPROVED PRODUCT DEVELOPMENT Stages in a New/Improved Product Development process: • Ideas Generation • Ideas Screening • Concept Development and Testing • Business Analysis • Beta Testing and Market Testing • Technical Implementation • Commercialization
New-to-the-world New product lines Additions Improvements Repositionings Cost reductions
Innovation Firm’s (cont. ) Viewpoint Distinction can be made between new products and new markets. Situations with a new technology and a new market are the most complicated and pose the highest degree of risk.
IDEA TO PRODUCT Internal, External, or Joint @Entrepreneur@ Internal, External or Joint Business model Idea Business Strategy Manufacturing or Business Process Invention Functional or Technological Innovation (Tech/Non-tech) Form or Appearance Marketing (Branding) Technology (Internal, External or Joint) Financial, legal or organizational Product (Internal, External or Joint)
Establishing Evaluation Criteria should be established at each stage of the product planning and development process. It should be all-inclusive and quantitative in nature. Criteria should evaluate the idea in terms of: Market opportunity. Competition. Marketing system. Financial factors. Production factors.
Product Planning and Development Process (cont. ) Idea Stage Promising ideas should be identified and impractical ones eliminated. Evaluation method – Systematic market evaluation checklist. Determine the need for the new idea as well as its value to the company. Concept Stage Refined idea is tested to determine consumer acceptance which can be measured through the conversational interview method.
Product Planning and Development Process (cont. ) Product Development Stage Consumer reaction to the product/service is determined. A consumer panel is given a product sample and preference is determined through methods such as multiple brand comparisons, risk analysis, etc. Test Marketing Stage Increases certainty of successful commercialization. Actual sales reflect consumer acceptance.
Innovation: process by which new goods and services or new production and operating systems are developed Enables better response to customer needs Quantum technological change: a rare, fundamental shift in technology that revolutionizes products or the way they are produced Quantum innovation: new products or operating systems that incorporate quantum technological improvement 32
Incremental technological change: technological change that represents a refinement of some base technology Incremental innovations: products or operating systems that incorporate refinements of some base technology 33
Technology cycle Quantum innovations occur rarely Technological discontinuity Dominant design emerges Era of incremental change and innovation during which competition is based on technology Technological discontinuity may occur again and the process starts all over 34
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Product life cycle: the changes in demand for a product that occur over time Demand for most successful products passes through four stages: The The embryonic stage growth stage maturity stage decline stage 36
Product life cycle (cont. ) Embryonic stage: a product has yet to gain widespread acceptance Growth stage: a product has been accepted by customers Minimal demand Demand increases Mature stage: market demand peaks because most customers have already bought the product Decline stage: occurs if and when demand for a product falls 37
Determinants of the length of the product life cycle Rate Faster the rate of change, the shorter the product life cycle Role of technological change of fads and fashion Determine the attractiveness of products to customers “Creative destruction”: new companies use new global and technological opportunities to make better products that drive old, inefficient companies out of business 38
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Industrial Designs Business (Idea) point of view: • Make your product appealing to consumers • Customize products in order to target different customers (e. g. Swatch) • Develop the brand (e. g. Apple ’s « Think Different » strategy; i Pod)
“Bringing together ideas that were previously unrelated”
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