Steps in Selection of New Business Ideas In the modern competitive environment of rapid change in tastes and technology a company cannot rely rolely on existing products. Customers expect new and improved products from an entrepreneur. New products, depending on now ideas, are the future of a business. Without a conscious flow of new products the marketing system would probably die. There are various steps in the selection of a new business idea and there are
(i) New Product Ideas-An attempt is made to visualise the product. An indepth study may be undertaken to anticipate features of the proposed product. Ideas may be contributed by scientists, professional designers, rivals. customers, sales force, dealers, top management, magazmes, new shapes, surveys etc. A detailed list of new ideas about potential product is prepared and an earnest attempt is made to find out commercially viable product.
(ii) Ideas Screening- Under this step detailed investigation of various ideas is carried on. Those ideas which offer less scope or are not promising are dropped. Most promising and viable ideas are carried to the next stage for indepth investigat and research.
(ii) Concept Development and Testing-All ideas chosen after preliminary screening are subjected to in depth study. These ideas are developed into mature product concepts. An attempt is made to find out minute details of the ideas and resulting features of the proposed product. Concept development and testing product ideas is undertaken keeping in mind preferences of the consumers. Concept testing enables a firm to pick up the best product concept amongst alternative product concepts.
(iv) Business Potential Analysis- After packing up
the best product concept, detailed investigation is carried out to find out its market potential, gestation period, capital investment and expected rate of return. Business potential analysis covers demand analysis, cost benefit analysis, competition analysis, profitability analysis etc. Business analysis can help in finding out soundness and viability of the selected product concept. Basic idea behind this analysis is to ascertain the viability and profitability of the proposed product.
(v) Product Development- After clearing business
potential analysis test concrete steps are taken for giving practical shape to the proposed product. Product development decisions include the type and quality of materials comprising the product, the method of production, cost and production time requirements per unit, plant capacity, alternative sizes and columns, name, trade-mark and image sought, testing of the model product will provide the ground for the final selection of the most promising model of the proposed product
(vi) Test Marketing- According to P Kotler test marketing “is the stage at which the product and marketing programs are introduced into more realistic market settings.
Test marketing involves placing a fully developed new product for sale in one or more selected areas and observing its actual performance under a proposed marketing plan. The purpose is to evaluate the product and pretest marketing efforts in real setting prior to commercialization. Before launching a new product in the market, the producer is interested in knowing about consumer opinion so that a stable and accepted product is introduced in the market. A producer can get vital clues for product improvement and for modification in marketing mix.