BUSINESS CONCEPT Marc Lewis A.

Brotonel
Instructor, Tanauan Institute
DEVELOPMENT
SOURCES OF NEW IDEAS
⮚Consumers
⮚Existing product & services
⮚Distribution channels &
⮚Research & development
CONSUMERS
⮚Entrepreneurs should continually pay close attention to
customers, this attention can take the form of informally
monitoring potential ideas & needs or formally arranging for
consumers to have an opportunity to express their opinions.
⮚New product or service idea may come from customer reaction to
the present product and from expected product idea.
⮚Care needs to be taken to ensure that the idea or need represents a
large enough market to support a new venture.
EXISTING PRODUCTS &
SERVICES
⮚Entrepreneurs should also establish a formal method for
monitoring & evaluating competitive products & services
on the markets.
⮚This may result in a new product or service that has
more market appeal & better sales & profit.
DISTRIBUTION CHANNEL
⮚Members of the distribution channels are also excellent
sources for new ideas because of their familiarity with
needs of the market.
⮚They suggest new products & also helps entrepreneurs
in marketing their newly developed products.
RESEARCH & DEVELOPMENT
⮚The largest source of new ideas is the entrepreneur’s own R&D
efforts.
⮚One research scientist in Fortune 500 company developed a new
plastic resin that became the basis of a new product but the
company was not interested.
⮚He started making a plastic molded modular cup pallet as a new
venture and build a company Arnolite pallet Company .
METHODS OF GENERATING
NEW IDEAS
Even with such a wide variety of sources available, coming up with
an idea to serve as the basis for a new venture can still be
problematic. The entrepreneur can use several methods to help
generate & test new ideas such as:
⮚Focus groups
⮚Brainstorming
⮚Brain writing &
⮚Problem inventory & analysis.
FOCUS GROUPS
⮚Groups of individuals providing information in a structured format.
⮚For generating new ideas, the focus group is an excellent method for
initially screening ideas & concepts.
⮚The group of 8-14 participants is stimulated by comments from each other
in creatively conceptualizing & developing a new product idea to fill a
market need.
⮚E.g. one company interested in the women’s slipper market received its new
product concept for a “warm & comfortable slipper that fits like an old shoe”
from a focus group of 12 women from various socioeconomic backgrounds
in the Boston area.
BRAINSTORMING
⮚A group method for obtaining new ideas & solutions.
⮚It is based on the fact that people can be stimulated to greater
creativity by meeting with others and participating in organized
group experiences.
⮚The characteristics of this method are keeping criticism away;
free wheeling of idea, high quantity of ideas, combinations and
improvements of ideas. Such type of session should be fun with no
scope for domination and inhibition. Brainstorming has a greater
probability of success when the effort focuses on specific product
or market area.
BRAIN WRITING
⮚ Created by Bend Rohr Bach in 1960 & named Method 635
⮚ It is the written form of brainstorming.
⮚ Brain writing is a silent, written generation of ideas by a group of people.
⮚ The participants write their ideas on special forms or cards that circulate
within the group, that consists of usually 6 members.
⮚ Each group member generates & writes down three ideas during a 5
minute period, until each form has passed all participants.
⮚ The leader monitors the time interval & can reduce or lengthen the time
given to participants according to the need of the group.
PROBLEM INVENTORY &
ANALYSIS
⮚A method for obtaining new ideas & solutions by focusing on
problems.
⮚This analysis uses individuals in a manner that is analogous to
focus groups to generate new product ideas. However, instead of
generating new ideas themselves, the consumers are provided with
list of problems and then asked to have discussion over it and it
ultimately results in an entirely new product idea.
CREATIVE PROBLEM SOLVING
⮚Creativity is the act of turning new and imaginative ideas into reality & is
an important attribute of a successful entrepreneur.
⮚While creative problem solving is the method for obtaining new ideas
focusing on the parameters.
⮚Creativity tends to decline with age, education, lack of use, and
bureaucracy.
⮚Hidden creative potential can be stifled by perceptual, cultural, and
organizational factors.
⮚Creativity can be unlocked by using any of the creative problem- solving
techniques.
CREATIVE PROBLEM SOLVING
TECHNIQUES
⮚Brainstorming
⮚Reverse Brainstorming
⮚Gordon Method
⮚Checklist Method
⮚Free Association
⮚Collective Notebook Method
⮚Attribute Listing
BRAINSTORMING
⮚This is the first technique & is probably the most well known & widely used for
both creative problem solving & idea generation.
⮚A good brainstorming session starts with a problem statement that is neither to
broad (which would diversify ideas & nothing specific would emerge) nor too
narrow (which would tend to confine responses)
⮚Once the problem statement is prepared, 6-12 individuals are selected to
participate.
⮚To avoid inhibiting responses no group member should be an expert in the field of
the problem.
⮚All ideas must be recorded.
REVERSE BRAINSTORMING
⮚It is a group method for obtaining new ideas focusing on the
negative.
⮚It is similar to brain storming except that criticism is allowed.
The main focus is on finding fault by asking questions.
⮚Hence focuses on the negative aspects of a product, service, or
idea as well as ways to overcome these problems.
⮚Care must be taken to maintain group morale.
GORDON METHOD
⮚ It is the method for developing new ideas when the individuals are
unaware of the problem.
⮚ Unlike many other creative problem-solving techniques, begins with
group members not knowing the exact nature of the problem.
⮚ Entrepreneur starts by monitoring a general concept associated with
the problem , the group responds by expressing a number of ideas.
⮚ Then a concept is developed, followed by related concepts, through
guidance of the entrepreneur.
⮚ The actual problem is then revealed, enabling the group to make
suggestions for implementation or refinement of the final solution.
CHECKLIST METHOD
⮚Developing a new idea through a list of related issues.
⮚In this method a new idea is developed through a list of related issues or
suggestions.
⮚The entrepreneur can use the list of questions or statements to guide the
direction of developing entirely new ideas or concentrating on specific
“idea” areas.
⮚E.g. modify? New twist? Change, color, odor, shape.
⮚Magnify? What to add? More time? Stronger? Larger? Thicker?
FREE ASSOCIATION
⮚Developing a new idea through a chain of word
associations.
⮚A word or phrase related to the problem is written down,
then another & another, with each new word attempting
to add something new to the ongoing thought processes,
thereby creating a chain of ideas ending with a new
product idea emerging.
COLLECTIVE NOTEBOOK
METHOD
⮚Developing a new idea by group members regularly recording
ideas.
⮚A small note book that easily fits in a pocket, containing a
statement of the problem, blank pages & any pertinent
background data is distributed.
⮚Participants consider the problem & its possible solutions,
recording ideas at least once, but preferably three times a day.
At the end of a week, a list of the best ideas is developed, along
with any suggestions.
ATTRIBUTE LISTING
⮚Developing a new idea by looking at the positives and
negatives.
⮚This method requires the entrepreneurs to list the
attributes of an item or problem & then look at each from
a variety of viewpoints that will result to form a new
combination & possible new uses that better satisfy a
need.
INNOVATION
⮚The process of translating an idea or invention into a good or service that creates
value or for which customers will pay.
OR
⮚Innovation generally refers to changing or creating more effective processes,
products and ideas, and can increase the likelihood of a business succeeding.
⮚Types:
⮚Breakthrough innovation
⮚Technological innovation &
⮚Ordinary innovation
BREAKTHROUGH
INNOVATION
⮚These extremely unique innovations often establishes the
platform on which future innovations in an area are developed.
⮚As they are the basis for further innovation in an area, these
innovations should be protected by patents, trademarks, and
copyrights.
⮚E.g. Chung Chiun Liu is a world expert on sensor technology &
holds 12 patents in electrochemical & sensor technology. These
Nano devices can find blood glucose level, hidden bombs, illegal
drugs.
TECHNOLOGICAL
INNOVATION
⮚Occurs more frequently; not at the same level of
breakthrough inventions.
⮚Offers advancements in the product/market area.
⮚Needs to be protected.
⮚E.g. personal computer, voice & text messaging.
ORDINARY INNOVATION
⮚Occurs most frequently.
⮚Extends a technological innovation into a better product
or service or one that has a different market appeal.
⮚Usually come from market analysis, not technology
push.
OPPORTUNITY RECOGNITION
⮚Some entrepreneurs have the ability to recognize a
business opportunity, which is a fundamental to the
entrepreneurial process as well as a growing business. A
business opportunity represents a possibility for the
entrepreneur to successfully fill a large enough
unsatisfied need that enough sales & profit results.
⮚The aspects of the opportunity recognition process is
indicated in the model of the opportunity recognition
process.
PRODUCT PLANNING AND
DEVELOPMENT PROCESS
Once ideas emerge from idea sources or creative problem solving, they
need further development. This product planning & development process
is divided into 5 major stages:
⮚ Idea stage
⮚ Concept stage
⮚ Product development stage
⮚ Test marketing stage &
⮚ commercialization
IDEA STAGE
⮚Promising ideas should be identified and impractical
ones eliminated in the idea stage, allowing maximum use
of the company resources.
⮚One evaluation method successfully used in this stage is
the Systematic market evaluation checklist.
⮚Determine the need for the new idea as well as its value
to the company.
CONCEPT STAGE
⮚After a new product/service idea has passed evaluation
in the idea stage, it should be further developed & refined
through interaction with consumers.
⮚The refined idea is tested to determine consumer
acceptance which can be measured through the
conversational interview method.
PRODUCT DEVELOPMENT
STAGE
⮚In this stage consumer reaction to the product/service is
determined.
⮚A consumer panel is given a product sample and
preference is determined through methods such as
multiple brand comparisons, risk analysis, etc.
TEST MARKETING STAGE
⮚A market test can be done to increase the
certainty of successful commercialization.
⮚Provides actual sales results, which reflect
consumer acceptance.
COMMERCIALIZATION
After the management is satisfied with the results of test
marketing, steps are taken to launch a full-fledged
programme for the production, promotion and marketing
of the product. It is the stage where the new product is
born; and it enters it life cycle process.
THANK YOU!