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Idea Generation Process – Entrepreneurship

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    Companies seek new ideas to enhances the performance of the exiting products and to innovate new ideas. The stages is called idea generations stages. The Major sources of new product ideas include internal sources, customers, competitors, distributors and suppliers. Almost 55% of all new product ideas come from internal sources according to one study. Companies like 3M and Toyota have put in special incentive programs or their employees to come up with workable ideas. Almost 28% of new product ideas come from watching and listening to customers.

    Customers: About 30% of new product ideas come from analysis of competitors’ products. The company can watch competitors’ ads, press releases and write-ups in the press about their activities. Companies also buy competitors information and pay for industrial espionage. Resellers and others who are close to the market, can often pass on information about new developments. Other sources are trade magazines, shows and seminars, market research firms, government reports, advertising agencies and new product consultants. Employees thought the companies can be sources of ideas.

    Toyota claims that employee submit two million ideas annually over 85% of which implemented. Companies also find good ideas by researching competitor’s products and services. They can find out what the customers like and dislike about their competitor’s products. ideas can also come from investors. External research, surveys, industrial publications research,and development etc. But main source of idea generation is the customers by their grievances ,complains and feedback. However, although ideas can flow from many sources, it is not feasible to implement all the ideas generated due to lack of time and capital.

    Idea screening: The main purpose of idea generations is to collect a large number of ideas. however, all ideas can be commercially viable. therefore companies filter the less viable ideas with the help of systematic process. Companies use various parameters to screen the ideas such market size, technical, capabilities and potential completions etc. The following issues will also help the companies to analysis the attrectiveness of the ideas.  Whether the product idea match the exiting product of the company.  The to which the new product cannibalize the sale of the exiting product. Company’s ability to produce and market the product.  Buying behavior and probable changes in environment. Errors Drop error where firm reject a very good idea. Cro error where firm select a poor idea.

    Concept testing and development: All ideas that survive in the process if screening will be studies in detailed. they will be developed into mature product. At this stage, the idea is submitted for external evaluation to get feedback from the market. it helps the firm to collect the important information like customers initial reaction towards the product development.

    During new product idea is described in the form of one or more benefits. An attractive idea has to be developed into a Product concept. As opposed to a product idea that is an idea for a product that the company can see itself marketing to customers, a product concept is a detailed version of the idea stated in meaningful consumer terms. This is different again from a product image, which is the consumers’ perception of an actual or potential product. Once the concepts are developed, these need to be tested with consumers either symbolically or physically.

    Marketing strategy: This is the next step in new product development. The strategy statement consists of three parts: the first part describes the target market, the planned product positioning and the sales, market share and profit goals for the first few years. The second part outlines the product’s planned price, distribution, and marketing budget for the first year. The third part of the marketing strategy statement describes the planned long-run sales, profit goals, and the marketing mix strategy.

    The following a sueccsseful concept test, the new product manager will develop a reliminary strategy plan  the first part describes the target market size, structure, behavior for the the first few year, the second part outlines the planned price distribution strategy and marketing budgets for the first year,  the third part of marketing strategy plan describes the long run sales and profit goals and the marketing strategy over a time.

    Business analysis: After management develops the product concept and marketing strategy, it can evaluate the business attractiveness. Business analysis are the first in –depth financial evaluation of the new product to be developed. Here management needs to prepare sales cost and profit projection to determine whether to stisfy company objectives. If they do the concept moves to development stage. Swot analysis will be prepared by the organization at this stage. It includes total sales estimation . estimations of cost and profit.

    Product development: At this stage, detailed technical analysis is conducted to know whether the product produced at costs is low enough to make final price attractive to the customers. Here the working model and prototype is developed to disclose all tangible and intangible attributes of the product. A product protocol is prepared which contains all the attributes of expected product. Ones the protocol has been developed it is handed over to research and development to develop the prototype of the the product.

    Test marketing: Test marketing is a stage where product is introduced in the few selected cities. During this stage the company has to fate the following expenses. High advertisement High manufacturing cost  High distribution cost etc. For test the product market needs to make a decision on the following issues.  The no. of the cities in which the product is to be tested. Geographic location of the cities. By this way the company can know the customer response , feedback, and suggestions.

    Complaints and other changes are required for product modifications. After successfully laughing the product in the selected cities company launches the product in all other cities. There are certain methods of product testing. Alpha testing: in this method a group of target audience is selected from the employee of the company Beta testing: it is carried out at the customers side. Generally it is applicable for industrial product where customization takes place. Gamma testing: it is carried out on long term basis where customers use the product extensively and give response after long period of time. Say six month.

    Commercialization: The result of test marketing help marketers to decide changes that are needed in the marketing mix before entering in to the market. It also help the the marketers to decide the amount of production distribution stategy, selling effort and other issues like providing guarantees and after sales service etc. the enter the market during the commercialization stage. The company launching a new product must make four decisions:

    • The first decision is introduction timing – whether the time is right to introduce the new product. If it will eat into the sales of the company’s or if the economy is down, the company may wait until the following year to launch it.
    • The company must decide where to launch the new product. Should it be in a single location, or region, several regions, the national market or the international market? Few companies have the confidence, capital and capacity to launch new products into full national or international distribution.

    They will develop a planned market rollout over time. In particular, small companies may enter attractive cities or regions one at a time. Larger companies may quickly introduce new products into several regions or into the national market. Companies with international distribution systems may introduce new products through global rollouts. Colgate-Palmolive used a ‘lead-country’ strategy for its Palmolive Options shampoo and conditioner: it was first introduced in Australia, the Philippines, Hong Kong and Mexico, then rapidly rolled out into Europe, Asia, Latin America and Africa.

    However, international firms are increasingly introducing their new products in swift global assaults, Procter & Gamble did this with the Pampers Phases line of disposable nappies.

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    Idea Generation Process – Entrepreneurship. (2016, Oct 02). Retrieved from https://graduateway.com/idea-generation-process-entrepreneurship/

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