Page 165 - DMGT408DMGT203_Marketing Management

Marketing Management/Essentials of Marketing

Notes 7.2.1 Idea Generation

The focus in this first stage is on searching for new product ideas. Few ideas generated at this
stage are good enough to be commercially successful. New product ideas come from a variety of
sources. An important source of new product ideas is customers. Fundamentally, customer
needs and wants seem to be the most fertile and logical place to start looking for new product
ideas. This is equally important for both personal consumers and industrial customers. Other
sources of new product ideas include scientists, resellers, marketing personnel, researchers,
sales people, engineers, and other company personnel.
Producers of technical products sometimes study customers, making the most advanced use of
supplied products and recognise the need for improvements.

Did u know? Toyota employees are said to contribute more than 2 million new ideas
annually, and about 85 per cent of these are implemented. By studying competitors’ products
and services companies can find ideas.
Some other creative methods companies use to gain new product ideas include brainstorming,
synectics, attribute listing, forced relationship, and reverse assumption analysis.
Sometimes, new product ideas just ‘happen.’

Example: Akio Morita’s story about the development of Walkman is well-known. He
used to observe an employee carrying a heavy stereo record player with headphones. This
prompted Morita to conceive the idea of a lightweight personal stereo.
No one was very hopeful about the idea. The doubts expressed, included the market potential,
and the inability of such a stereo to record, but Morita was very optimistic about the market
potential of such a stereo. When the experimental unit was ready, marketing people were not at
all enthusiastic and said that it would not sell.
Everybody knows that Sony’s Walkman was a huge success. Morita writes:
“I do not believe that any amount of market research could have told us that the Sony Walkman
would be successful; yet, this small item literally changed the music listening habits of millions
of people all around the world. Often such a new product idea strikes us as a natural happening.”

—Akio Morita, Made in Japan, Penguin, 1986.
Though there is need to be a market-driven company, product ideas sometimes arise quite by
accident in laboratory tests.

Example: Researchers were seriously involved in developing a drug for angina (a heart
ailment). However, undesirable side effects of the drug led to the development of a drug with
huge market opportunity. Thus, the anti-impotency drug Viagra (sildenafil citrate) was born
and became a major marketing success because it provided a solution for a major problem of a
large number of consumers.

7.2.2 Idea Screening

The aim of screening is to reject the poor ideas as early as possible because the costs of new
product development keep rising sharply with each successive development phase. Many
companies use a standard format for describing new-product ideas by the review committee
and includes descriptions of new-product idea, its target market, anticipated competition,
assessment of market potential, price, estimate of development time, costs, and ROI.

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