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.

 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. Sources of New Ideas (cont.)

 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.

 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. 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. 8 Some guidelines for brainstorming session;

Ken Youssefi UC Berkeley, ME Dept 9 Memory Map – the group leader is responsible for recording the brainstorming session

Ken Youssefi UC Berkeley, ME Dept 10 Summarize the results of the brainstorming (Example)

 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. Methods of Generating New Ideas (cont.)

 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.

 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. 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 Financial, legal or organizational Business model Internal, External, or Joint Internal, External, or Joint Internal, External or Joint Business Strategy

 Establishing Evaluation Criteria  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.

 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. Product Planning and Development Process (cont.)

32  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

33  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

34  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

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36  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

37  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

38  Determinants of the length of the product life cycle  Rate 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 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”