The first thing a business should do, whether formally or informally, is a SWOT analysis. Examining one’s Strengths, Weaknesses, Opportunities and Threats will uncover “gaps” in the market as well as who is or might be a competitor in that space. Then, basic secondary research, online searching, input from the field, and some form of brainstorming sessions can aid the ideation process.
Next, all ideas for opportunities should be screened without bias or judgment. Establish objective criteria for moving forward, discuss, evaluate, and prioritize the opportunities. Which will provide the best ROI? Get to market soonest? Cost the least to launch? It is not possible to predict the future, but at least you can choose a few ideas that look most promising.
By this time, you should know whether a competitive product is out there, who makes it, what its features are, who buys it and at what price it is sold. If there is no product in the market, determine whether anyone has ever tried and failed (maybe it was not a good idea!). Also, check for any patents or potential legal or regulatory issues.
Moving forward in the process
One of the most important steps is testing the concept among its intended audience. Though there may be a few exceptions where a visionary could foretell the acceptance of a new product or service, most ideas first need to be exposed to potential buyers. Do they understand what the new product is and does? Do they perceive a need for it? Does the product solve a problem? How likely is it that they would purchase it — and at what price? Finally, is there enough appeal so that potential sales will generate profits?
If the idea passes certain established criteria, it is time to create a prototype. At this time, a combination of market research techniques will be very helpful. Focus groups offer a good way to obtain interactive feedback from your target market. Where feasible, some should be held in each of a few primary regions considered as most significant to success. Findings from this effort can be complemented with online surveys (where visual renditions can be shown, and reactions to two or more versions of the product can easily be tested).
Coming to market
By now, you have assessed whether “the dog will eat the dog food”. So it is time to fine tune the costs of producing and bringing the product to market. Engineering, marketing, and financial departments all need to be involved.
A trial run or live market test can be conducted in one or more test markets. Critical information may be obtained that helps in tweaking the final product, packaging, pricing before plunging into full scale production. Also, communications can be tested at the same time to see if the desired message is being delivered and effective.