Idea Generation
Idea generation is a continuous, systematic search for new product opportunities. It involves delineating sources of new ideas and methods for generating them. Methods for generating ideas include brainstorming (small-group sessions which stimulate a wide range of ideas), analysis of existing products, and surveys. Many marketing analysts suggest that an open perspective is essential: the ideas of different people should be sought; a large number of ideas should be generated; and ideas should not be criticized, no matter how offbeat they first appear.

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Product Screening
After the firm identifies potential products, it must screen them. In product screening, poor, unsuitable, or otherwise unattractive ideas are weeded out from further actions. Today, many companies use a new-product screening checklist for preliminary evaluation. In it, firms list the new-product attributes considered most important and compare each idea with those attributes. The checklist is standardized and allows ideas to be compared.See example of screening checklist below.

GENERAL CHARACTERISTICS OF NEW PRODUCTS
Profit potential
Existing competition
Potential competition
Size of market
Level of investment
Patentability
Level of risk

MARKETING CHARACTERISTICS OF NEW PRODUCTS
Fit with marketing capabilities
Effect on existing products (brands)
Appeal to current consumer markets
Potential length of product life cycle
Existence of differential advantage
Impact on image
Resistance to seasonal factors

PRODUCTION CHARACTERISTICS OF NEW PRODUCTS
Fit with production capabilities
Length of time to commercialization
Ease of product manufacture
Availability of labor and material resources
Ability to produce at competitive prices

Concept Testing
A firm needs to acquire consumer feedback about its product ideas. Concept testing presents the consumer with a proposed product and measures attitudes and intentions at this early stage of development.

Concept testing is a quick and inexpensive way of measuring consumer enthusiasm. It asks potential consumers to react to a picture, written statement, or oral description of a product. This enables a firm to determine initial attitudes prior to expensive, time-consuming prototype development.

In general, concept testing should ask these types of questions of consumers:

- Is the idea easy to understand?
- Do you perceive distinct benefits for this product over those products currently on the market?
- Do you find the claims about this product believable? n Would you buy the product?
- Would you replace your current brand with this new product? Would this product meet a real need?
- What improvements can you suggest in various attributes of the concept?
How frequently would you buy the product? Who would use it?

Business Analysis
Business analysis for the remaining product concepts is much more detailed than product screening. These are some of the factors considered in this stage of planning :

Demand projections : Price/sales relationship; short- and long-run sales potential: speed of sales growth: seasonally: rate of repurchases: channel intensity

Cost projections : Total and per unit costs; use of existing facilities and resources; startup vs. continuing costs: estimates of future raw materials and other costs; economies of scale; channel needs; break-even point

Competition :Short-run and long-run market shares of company and competitors; strengths and weaknesses of competitors; potential competitors; likely competitive strategies in response to new product by firm

Required investment : Product planning (engineering, patent search, product development, testing): promotion: production; distribution

Profitability: Time to recoup initial costs; short- and long-run total and per-unit profits; control over price; return on investment (ROI); risk

Because the next step is expensive and time-consuming product development, critical use of business analysis is essential to eliminate marginal items.

Product Development
Product development converts a product idea into a physical form and identifies a basic marketing strategy. It involves product construction, packaging, branding, product positioning, and attitude and usage testing.

Product-construction decisions include the type and quality of materials comprising the product, the method of production, costs and production time requirements per unit, plant capacity, alternative sizes and colors, and the time needed to move from development to commercialization. Packaging decisions include the materials used, the functions performed (such as promotion and storage), costs, and alternative sizes and colors. Branding decisions include the choice of a new or existing name, exclusivity, trademark protection, and the image sought. Product positioning involves selecting a market segment and positioning the new item against competitors and other company offerings. Attitude and usage testing center on consumer perceptions of and satisfaction with a product.

Test Marketing
Test marketing involves placing a product for sale in one or more selected areas and observing its actual performance under the proposed marketing plan. The purpose is to evaluate the product and pretest marketing efforts in a real setting prior to a full-scale introduction. Rather than inquire about intentions, test marketing allows actual consumer behavior to be observed. The firm can also learn about competitive reactions and the response of channel members. On the basis of testing, the firm can go ahead with its plans on a larger scale, modify the product and then expand its effort, modify the marketing plan and then expand its effort, or drop the product.

Commercialization
After testing is completed, the firm is ready to introduce the product to its full target market. This is commercialization and corresponds to the introductory stage of the product life cycle. Commercialization involves implementing a total marketing plan and full production.

Among the factors to be considered in the commercialization stage are the speed of acceptance by consumers and channel members, the intensity of distribution (how many outlets), production capabilities, the promotional mix, prices, competition, the time period until profitability occurs, and commercialization costs.

Source of Reference:
Joel R. Evans and Barry Berman, Marketing in the 21st Century, Atomic Dog Publishing. You can obtain this excellent book here

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