Sources for New Product Ideas: Screening, Evaluating, and Business Analysis for SMBs
The product development process started with new product ideas.
Finding promising new product ideas is the starting point in the new product development process for idea generation. New product ideas trigger planning for new products.
The idea is evaluated as it moves through the process, and new product planning expenses accumulate. There are various internal and external sources of new product ideas.
Ideas can be generated by information search, marketing research, research and development, incentives, and acquisition.
I’ll be discussing the screening, evaluation, and business analysis to help determine if a new product concept is sufficiently attractive to justify proceeding with development.
Sources of Product Ideas
New product ideas come from many sources. Limiting the search for new product ideas to internal research and development activities is far too narrow an approach for most companies.
Sources of new product ideas include company employees, customers, competitors, outside inventors, acquisitions, and channel members. Both solicited and spontaneous ideas may emerge from the sources, and some even occur by accident.
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Procter & Gamble’s Ivory soap was a result of an accident. Manufacturing over-mixed the ingredients in the manufacturing process creating air bubbles in the soap, causing it to float. Customers love it!
The essential issue that management must face is how to establish a program for generating and evaluating ideas that will meet the needs of the company. Several questions must be answered in developing such a program:
- Should ideas searches be targeted or open-ended?
- Should the search for new product ideas be restricted to those ideas that correspond to the mission, target market, and the company’s strategy?
- How extensive and aggressive should the company idea search activities be?
- Should search being an active or passive function within the firm?
- Where will responsibilities for new product ideas search be placed
- How will new product planning activities be directed and coordinated?
My research findings indicate that financial performance is higher for high-technology companies that have proven competence in their products.
Companies that focus their product strategy perform much better over a long time span than those that did not. These findings came from a study of 246 products across 26 small and medium-sized companies.
For most companies, the idea search program should be aligned with the corporate mission and objectives. While some far-out new product ideas may change the future of a company, more often, open-ended ideas search the disparates resources and misdirected efforts.
It is impossible to generalize about the other three questions since they depend on many factors.
Factors like size and type of company, technologies involved, new product needs, resources, management preferences, and corporate capabilities. Top management should develop a plan for idea generation that will satisfy the company’s requirements.
Many new product ideas start with customers, particularly ideas for industrial products. The use of a lead user analysis offers promising potential for the development of new industrial products. Lead users are those companies whose existing needs and requirements anticipate marketplace needs.
The approach is to try to identify these market leaders and analyze their needs to improve the productivity of new product development and product markets that change rapidly.
The objective is to satisfy the lead users needs, thus accelerating new product planning. Both industrial and consumer buyers are useful sources of new product ideas. [Read more]
