New Product ideas are not easy to come by, and are not sought after just for the sake of making some New Product. First of all the new product must have better applications than the existing identical product, price advantage to customers and higher returns to the manufacturer. The new product ideas are generated from different sources.
The most important and relevant of all the sources are the developments in the market. These developments can be specific changes in geographic, demographic and psychographic characteristics of the market. These developments affect the customer needs and wants. Customersâ€™ exposure to media affects their needs and expectations. For example, as the urbanization process expands, a number of rural consumers get exposed to satellite television and video, more would be their demand for the latest products in the urban and the world market.
So, while the customers in metro and urban centers would want products which their counterparts in the North America and Europe use, the rural customers expect products which urbanities use. Firms can identify these changing needs of customers through customer surveys, projective techniques and feedback from customers in the form of suggestions and complaints. Perhaps many new products ideas come from customers, describing their problems in using the product. WIMCO, the only organized sector firm in the safety-match industry and introduced carbonized match sticks, when customers did talk about fire hazards in using the then prevalent match boxes. WIMCO could also develop match boxes that wouldnâ€™t get soggy in winter and monsoons. Both these developments in match boxes came with WIMCO listening to its customer needs. Thus when a firm listens to its customersâ€™ problems and expectation, it will always come up with ideas, which will, in the long run, be successful.
Another source of new ideas is a successful competitor firm who makes profits from a new product. A firm may be motivated to test this product idea. It might look for unfulfilled market needs or gaps in this product-market that the competitors may have left. Therefore, competitors can also act as a catalyst in the generation of new products ideas. Often, trade channels members and company sales force are the sources of information on developments in competing firms.
Though a company may turn to different sources for new product ideas, it isnâ€™t that all are equally productive It has been found that most productive sources are customers, R&D, unsolicited customer feedback, observing competitors and company sales representatives. Other productive sources are the top management and university laboratories.
One of the best examples of new product ideas can be from Industrial and consumer electronic goods. Due to invention of new electronic components and printed circuits particularly with onus on reduction in sizes, portability, multiple functions the resultant electronic appliances one can see a sea of changes in the last decade in computers, cell phones, CDs to DVDs, CTVs to Plasma TVs and so on. In all these cases the new product ideas were not only consumer friendly but also increased the revenues of the firms manufacturing them at the same time making their Brand familiar even in rural areas as a house hold name.
Once a company has carefully segmented the market, chosen its target customers, identified their needs, and determined its market positioning, it is better able to develop new products. Many companies today use customer driven engineering to design new products. Customer driven engineering gives high importance to incorporating customer preferences in the final design.
New product development requires senior management to define business domains, product categories, and specific criteria. General Motors has a hefty $400 million benchmark it must apply to new car models â€“ this is what it costs to get a new vehicle into production. One company established the following acceptance criteria;
* The product must be introduced within five years.
* The product has a market potential of at least $50 million and a 15% growth rate.
* The product would provide at least 30% return on sales and 40% on investment.
* The product would achieve technical or market leadership.
Walking the aisles at Robert McMathâ€™s New Product Showcase and Learning Center is like being in some nightmare version of a supermarket. There is Gerber food for adults â€“ pureed sweet and sour pork and chicken Madeira â€“ microwaveable ice cream sundaes, parsnip chips, aerosol mustard, Ben Gay aspirin, and Miller Clear Beer.
McMathâ€™s unusual showcase represents $4 billion in product investment. Behind each of the 80,000 products on display are squandered dollars and hopes. From them he has distilled dozens of lessons for an industry that, by its own admission, has a very short memory. McMath, a former marketer for Colgate Palmolive has now put his unique insights into a book.
The value of a brand is its good name, which it earns over time: People trust it to deliver consistent set of attributes. Do not squander this trust by attaching good name to something totally out of character. Louis Sherry No Sugar Added Gorgonzola Cheese dressing was everything that Louis Sherry, known for its rich candies and ice cream, should not be; sugar less, cheese, and salad dressing.
â€˜Me tooâ€™ marketing is the number one killer of new products: Pepsi is one of the few survivors among dozens of other brands that have challenged coke for more than a century. Ever hear of Toca-Cola? Coco-Cola? Yum Yum Cola? French Wine of Cola? How about King Cola, the royal drink?
People usually do not buy products that remind them of their shortcoming Gilletteâ€™s â€˜For Oily Hair Onlyâ€™ shampoo flopped because people did not want to confess that they had only hair; nor do they wish to advertise their faults and foibles to other people by carrying such products in their grocery carts.
Some products are too different from the products, service of experiences consumers normally purchase: You can tell that some innovative products are doomed as soon as you hear their names: Toaster Eggs, Cucumber Antiperspirant Spray, Health Sea Sausage.
We can draw the inference that the new product must have all the positive features mentioned in the aforesaid paragraphs. But the facts are that lot of research, studies, efforts, consumersâ€™ opinion prototypes go into the new product by the time it reaches the customers through retail stores.