Chap 14. Identifying opportunities

• Sources of Opportunities


  Ideas for developing new products can come from a sudden flash of inspiration or from painstaking research
• Internal sources of new product ideas

  • Customer feedback
  • Market trends
  • Staff suggestions
  • Research and development
• Customer feedback


  Very useful sources of new product ideas
• Customer feedback


  • Pizza Hut launched a "4 for All" pizza with four sections each with a different topping
• Market trends


  • Reduced sugar in drinks (sugar tax)
• Staff suggestions


  • British Airways launched an online suggestion box to help reduce emissions and cut fuel bills. One unusual idea was to reduce airplane weight by descaling toilet pipes.
• Research and development


  • When trying to develop a new superglue, one firm accidentally discovered a glue that remained sticky for a few days, which led to the invention of the Post-It sticky notepads.
• Brainstorming


  Skilled personnel are gathered together in a room with the sole idea of thinking up ideas for new products
• External sources of new product ideas

  • Import substitution
  • Universities
  • International business trends
  • Producing under license
• Import substitution


  • Ireland imports 3 million tonnes of animal feed each year. Most of the feed comes from Argentina, U.S.A. and France.
• Universities


  • Elan Pharmaceutical in Athlone linked up with Trinity College to develop anti-smoking nicotine patch products.
• International business trends


  • Companies send representatives to trade shows abroad to search for new ideas or products currently unavailable in Ireland.
• Producing under license


  • Glanbia plc produce Yoplait products under a licensing agreement from Yoplait France who own the brand.
• Other examples of external sources


  • Monitoring the products of competitors
  • Keeping up to date with changing fashions
  • Developing variations on existing products
  • Trade magazines
  • Trade Fairs
• Market research


  The process of gathering and analysing information about the potential market for a product
• Reasons to conduct market research

  • Reduces risk and saves money
  • Predict sales
  • Tests customer reaction
  • Identifies competitors
  • Indicates the size of the market
• Steps in market research


  1. Decide on the information required

  2. Decide on desk research or field studies

  3. Collect the information

  4. Collate and analyse the data

  5. Make a decision based on the data
• Desk research


  Accessing information that has already been gathered by others
• Desk research


  • Reports and statistics
  • Internet
  • Newspapers
  • Commercial market research companies
• Field research


  Gathering business information directly from customers and competitors
• Field research


  • Observation research
  • Customer surveys
  • Focus groups
• Sampling


  Interviewing a small group of people who are representative of the larger target market
• Results of research from a sample will never be totally accurate. For this reason, results are expressed along with a margin of error.
• Stages in developing a new product or service

  1. Idea generation
  2. Product screening
  3. Concept development
  4. Feasibility study
  5. Prototype development
  6. Test marketing
  7. Product launch