Case Studies: Is This Your Business? Q: What can be done to verify if there is a market for a product you are developing when you are still at the applied research stage -- in short, when you are still three years away from getting it to market? The environment seems to be more uncertain than ever, making market studies seem less relevant. A: You have identified one of the biggest problems with product development in today's climate, namely that cycle times, or time-to-markets, are becoming increasingly contracted and difficult to predict. In today's volatile and fast-paced business environment, every company knows that its ability to create and launch new products is the key to sustainable growth. The combined effects of technology advancements, deregulation, more sophisticated and demanding customers, and competition from non-traditional sources are increasing the pressure to innovate, and innovate quickly. But, at the same time, the results of that innovation thrust are less easy to forecast. Perhaps that is why the U.S. Patent Office reports that a pathetic 3% of patents filed result in successful new products. And in the consumer sector, one-third is considered a standard success rate for new products. There are no standard success rates for industrial, or business-to-business, products, but they are considered to be higher because markets are more targeted and less diffuse. And in that target marketing lays perhaps the solution to your problem. You say that market studies are becoming less relevant, and that is true - of initial market studies. But the secret to successful product development is to continue studying the market and maintain a development process that is flexible enough to shift direction if the market tells you that is what potential customers desire. Generally, in the field of product development: A market orientation helps guarantee that products will have a market waiting for them when they are ready for commercialization. A clear but flexible definition of the proposed new product is critical to New Product Development (NPD) success. Companies must do their homework in the form of initial screenings of product ideas, preliminary market assessments, detailed market research, test marketing or test selling, and pre-commercialization business analyses. Involvement of customers throughout the NPD process minimizes the risk of developing the wrong product, develops lead customers, and speeds market penetration. This is a new form of project management that combines traditional product development with marketing. If you are worried that the market for your product will change over the two to three years it takes to develop that product, you should continually monitor potential customers' needs and desires and be prepared to change your product if the necessity appears. This can be done through regular focus groups or other forms of market intelligence gathering. Whatever method you choose, constantly listen to your market so that you can detect shifts in thinking before the product launch, and not after. Back to Resources (c) 2004, KnowPreneur Consultants

Articles Billable Hours Model Disappearing By Tony Wanless, February 2004 -- Financial Post Angels Are Not Tooth Fairies (PDF) By Tony Wanless, October 6, 2003 -- Financial Post The Big Bang -- How the BC Hydro/Accenture deal got done. By Tony Wanless, July 2003 -- BC Business Magazine Thou Art My Customer - Client Service Ideas That Deliver Business Development Bank of Canada, Summer 2003 -- E-Profit Magazine