In my previous article, I highlighted 6 good ways of generating new product ideas. In that article, I mentioned that the ideas will come in many forms. That is, you will have a lot of them. But if you have been in business long enough, or have been very observant, not all ideas that seem good at first turn out well in the end.
Therefore, this article aims to provide a guide with which you can eliminate the defective, nonviable ideas using the State-Gate Model. The guide is in form of questions that you must ask and find honest, comprehensive answers to. They are as follows:
How to Screen Your New Product Ideas
1. Will the customer in the target market benefit from the product?
If the product idea doesn't look like it will benefit the customer, scrap it. You don't need it. However, some ideas may not seem good at first but after you have given them much thought, then you wil begin to see sense in them. Some customers will never be able to make sense of some products, that doesn't mean those products don't serve their purpose to other people. So, find out who needs your product and streamline your ideas to benefit them.
2. What is the size and growth forecasts of the market segment / target market?
For example, if you have a product idea for a new type of baby food, you have to understand that not everyone will be interested in buying it. You must also realize that there are existing baby food manufacturers. Therefore, it would be wise to carve out a small niche for yourself as a small business, and then look at the target market and ask, "how large can this market grow?" If after you have made your enquiries and done your research you are not convinced to move forward with the idea, then don't. But if the potential market is large enough for you, then you should go ahead with the idea.
3. What is the current or expected competitive pressure for the product idea?
The next decider for your new product idea is the size and pressure of existing competition. The answer to this question may help you to further streamline your idea, especially when you are fully convinced that it is a good one. For example, Amazon started as an online bookstore, competing with brick and mortar businesses like Barnes and Noble and gaining the edge over them. If Amazon had started as a brick and mortar bookstore, they probably won't be where they are today.
So, take a cue from them. If your inability to deal with the existing competition means you tweaking your idea and forgoing some things, then go ahead.
4. What are the industry sales and market trends the product idea is based on?
What sort of trends and sales metrics are your product based on? You cannot think up an idea for winter coats and then decide to build your whole business on that. Winters don't last all year, and then what will happen to your sales in the process? Just because winter coats sell a lot during
winter doesn't mean they will contiue to sell a lot. Do not build your business on passive trends. However, when it comes to product ideas, you can make the most of rising trends by riding on their wings. You must then go on to sustain your customer base by releasing new products that they will like.
5. Is it technically feasible to manufacture the product?
Do you have the technical means to manufacture the product? To illustrate this, I'll cite an instance. Imagine that I run a tech retail store. And just because the iPhones are selling a lot in my store, I decided to start manufacturing phones with similar features to the iPhone. It wouldn't be wise because I neither have the money nor the impetus to succeed in that line. So, think like that when assessing your product idea.
6. Will the product be profitable when manufactured and delivered to the customer at the target price?
This question is explicit enough, I think. If the product will not make you money and profits when released, then kindly dump the idea and fish elsewhere.
The process to developing new products that will promote your business and boost your profits is one that requires great attention. Next week we will look at the steps for idea development and testing. That said, I'd like to know what your experiences with product development are? What has been the greatest challenge you have faced? And what has been your most important lesson?