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Chapter 4 Creativity and the Business Idea

Chapter 4 Creativity and the Business Idea. SOURCES OF NEW IDEAS. Consumers Existing Products and Services Distribution Channels Federal Government Research & Development. Sources of New Ideas. Consumers Informally monitor potential ideas and needs.

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Chapter 4 Creativity and the Business Idea

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  1. Chapter 4Creativity and the Business Idea

  2. SOURCES OF NEW IDEAS • Consumers • Existing Products and Services • Distribution Channels • Federal Government • Research & Development

  3. Sources of New Ideas • Consumers • Informally monitor potential ideas and needs. • Formally arrange for consumers to express their opinions. • Existing Products and Services • Analysis uncovers ways to improve offerings that may result in a new product or service. • Distribution Channels • Channel members can help suggest and market new products.

  4. Sources of New Ideas (cont. • Federal Government • New product ideas can come in response to government regulations. • Research and Development • A formal endeavor connected with one’s current employment.

  5. METHODS OF GENERATING IDEAS • Focus Groups: Groups of individuals providing information in a structured format. 2. Brainstorming: A group method for obtaining new ideas and solutions without criticize anyone. 3. Brain-writing: Writing Brainstorming 4. Problem Inventory Analysis: A method for obtaining new ideas and solution by focusing on problems • Results must be carefully evaluated as they may not actually reflect a new business opportunity.

  6. INNOVATION The use of a new idea or method Types of Innovation • Breakthrough Innovation • Technological Innovation • Ordinary Innovation

  7. Classification of New Product Continuous Innovation Least disrupting influence on established consumption patterns (autmobiles style changes, fashion style changes, product size or color changes) Dynamically Continuous Some disrupting influence on established consumption patterns (CDs, iPod, Sony Walkman) Discontinuous Innovations : Involves the establishment of new consumption patterns and the creation of previously unknown products. • These are rare and require a great deal of new learning by the consumer because these products perform either a previously unfulfilled function or an existing function in a new way. Example Internet

  8. The major distinction between new product and new markets • The major distinction between new product and new markets is: • New Products are defined in terms of the amount of improved technology, whereas market development is based on the degree of new segmentation

  9. Product Planning and Development Process • The product planning and Development is divided into 5 major stages Idea Stage • Concept Stage • Product Development Stage • Test Marketing Stage • Commercialization Stage (PLC)

  10. Establishing Evaluation Criteria • At each stage of the product Planning and Development process, Criteria should be established to evaluate the new idea in terms of market opportunity, competition, the marketing system, financial factors, and production factors.

  11. Class Work • Do you think that the internet can be a source of advantage for one firm over other firms ? Do you think it is an important to be able to compete? Justify your answer by example and reason

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