byNorhaniza 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 ChannelsChannel members can help suggest and market

new products.

Federal GovernmentFiles 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.

Sources of New Ideas (cont.)

Focus GroupsA 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.

BrainstormingAllows 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.

Methods of Generating New Ideas (cont.)

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.

An intuitive method of generating concepts.

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.

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Some guidelines for brainstorming session;

Ken YoussefiUC Berkeley, ME Dept 9

Memory Map – the group leader is responsible for recording the brainstorming session

Ken YoussefiUC Berkeley, ME Dept 10

Summarize the results of the brainstorming (Example)

BrainwritingA 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.

Methods of Generating New Ideas (cont.)

CreativityThe 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.

Innovation1 : The introduction of something new2 : 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 InnovationBreakthrough

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.

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 ProductsConsumer’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.

Innovation (cont.)

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

Cost reductions

New product lines

Additions

Improvements

Repositionings

Firm’s 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.

Innovation (cont.)

Innovation(Tech/Non-tech)

Invention

Idea

Technology (Internal, External or Joint)

Product (Internal, External or Joint)

Functional or Technological

Form or Appearance

Marketing (Branding)

Manufacturing or Business Process

@Entrepreneur@

Financial, legal or organizational

Business model

Internal, External, or Joint

Internal, External, or Joint

Internal, External or Joint

Business Strategy

Establishing Evaluation CriteriaCriteria 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.

Idea StagePromising 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.

Product Planning and Development Process (cont.)

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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

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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

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Technology cycleQuantum innovations occur rarely

Technological discontinuityDominant design emergesEra of incremental change and innovation

during which competition is based on technology

Technological discontinuity may occur again and the process starts all over

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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 embryonic stage The growth stage The maturity stage The decline stage

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Product life cycle (cont.) Embryonic stage: a product has yet to

gain widespread acceptance Minimal demand

Growth stage: a product has been accepted by customers

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

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Determinants of the length of the product life cycleRate of technological change

Faster the rate of change, the shorter the product life cycle

Role 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

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Industrial DesignsIndustrial 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”