Assess Product Idea
Article
By: Bob Cannon
In our highly competitive markets, new products are
thought by many to be the key to business growth and
profitability. The problem developing successful new
products is not a shortage of ideas, but rather the
expense in producing and marketing new products without
any guarantee of success. Sadly, this is a fact that
is little known to individual inventors and is a tremendous
hurdle for a manufacturer. Consequently much time and
effort has been devoted to developing a systematic approach
to new product development.
Individual inventors are free to go wherever their
imagination and their pocket book will take them. Existing
companies, however, have learned to restrict new product
development to product ideas that are in line with the
strategic direction of the company and the needs of
the marketplace they currently serve or plan to serve
in the future. In new product development there are
steps that are common to most all-new product development.
Step 1. Gather new product ideas.
Ideas can come from individual inventors looking to
sell their ideas or gather a royalty on the sale of
the product. Many companies encourage individual inventors
to submit ideas on their websites. Ideas can also come
from within the organization. Sometimes ideas come from
a formal research effort or sometimes from people on
the factory floor. The more product ideas you have,
the more options you have and without good options to
choose from, it is impossible to make a good decision.
Step 2. All new ideas need to be screened
to insure that the idea supports the strategic direction
of the company. Even though an idea looks interesting,
if it doesn’t support the strategic direction
of the company, it must be discarded.
Step 3. Make a business assessment
of where best to spend time, money and effort in product
development. Wendell Leimbach of MLE Consulting uses
a matrix for strategically evaluating new product ideas,
which I have modified slightly below:
This product matrix divides ideas into four quadrants
based on ease of entry into the market on one axis and
uniqueness on the other. Ideas below the line should
be discarded unless there is some way to move them above
the line. Ideas above the line should be evaluated for
intellectual property protection.
Step 3 is a decision point that frequently is the end
of the decision process about which product ideas to
pursue. They stop here because efforts beyond this point
become much more expensive and until recently, there
have not been many alternatives. If this is the last
step, then the likelihood of failure is extremely high.
It also helps to explain why so many people refer to
the process as the “Fuzzy Front End” of
product development as there is little to help predict
the success or failure of the idea at this point.
Step 4. Take the ideas and turn them
into product concepts. It involves researching customer
requirements. It also involves testing the concept to
determine if the concept will meet the needs of the
customer. Marketing will analyze market potential and
possible price points. This is also the step where engineering
gets involved in producing concept drawings, models
and possibly even prototypes. It also involves the engineers
and accountants working together to develop estimated
product costs and possibly even tooling costs. All this
is done in an effort to determine whether or not it
makes economic sense to continue to explore the development
of an particular idea.
Step 4 has become more feasible with the introduction
of new technologies (like 3D CAD Modeling, Stereo lithography,
Room Temperature Vulcanization, Reaction Injection Molding
and Rapid Solidification process) that allow for the
rapid production of prototypes and economical, small
production runs. This step is iterative in that a prototype
is produced and put in the hands of a statistically
significant number of end users. Feedback on the product
is obtained that provides an opportunity to enhance
the new product and it’s acceptance. This information
is fed back to the designers of the product. New prototypes
are developed and the process is repeated until the
product attains a level of statistical success that
can be projected against the target audience or the
idea is dropped before huge sums of money are spent
on production tooling, inventory and expensive market
introductions.
My experience and recent research confirm that most
companies spend more money determining the cost to produce
an item than they do on researching customer acceptance.
I believe this is one reason why many new products fail
to achieve commercial success. Rapid change, increasing
competition, complexity, organizational stress and high
customer expectations have combined to make successful
new products a key to profitability for inventors and
manufacturer alike. The pace of the market provides
less time to overcome new product failures and reestablish
credibility. Speed to market is important, but Step
4 (The Product Accelerator Process) is critical to financial
success with new products.
This is just one aspect of marketing a new product.
If you would like to learn more, please visit
http://www.marketingnewproduct.com and explore how
our Quickie Market Analysis can help
you with your new product.
# # #
© Copyright Bob Cannon/The Cannon Advantage,
2005. All rights reserved.
Byline
Bob Cannon helps inventors, imagineers, importers and
manufacturers successfully introduce new products to
the Hardware / Hardlines Marketplace. Check out his
blog at http:www.takingaim.blogspot.com.
Bob can be reached at (216) 408-9495 or mailto: bob@marketingnewproduct.com
This article courtesy of http://www.marketingnewproduct.com.
You may freely reprint this article on your website
or in your newsletter provided this courtesy notice
and the author name and URL remain intact.
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