Tuesday, November 17, 2009

Innovation and how to assess concepts - part 1

Companies spend a lot of energy and investments on bringing new concepts and products to market. But still, most of those concepts or products fail within a year after launch… Research findings vary, but I’ve seen articles that claim that as many as 90% of innovations don’t contribute to company goals i.e. they fail. The monies involved may not be linked to massive investments in production facilities or marcom. But the employee and project resource that’s required to bring a new product to market are enough to make a failure very expensive.

I’ve seen first hand how companies ignore taking the precautions necessary to ensure that they get a return on innovation investment. Human factors like ignorance, incompetence or fear of failure are often at fault. So, if you don’t want your concept to fail (and if you’re responsible and competent) - what steps do you need to take in order to assess that your concept or innovation has got the power to last? Well, the least one can do is to ensure that the concept has been thoroughly assessed based on both external and internal success criteria. External criteria are related to market and consumer factors and internal criteria are related to company capabilities.

Well, I need to try to follow the KISS principle and keep things short and simple. So, today I’ll deal only with the external assessment factors at the early stages of idea or concept assessment. And if time permits I’ll focus on the latter stages of concept screening later on this week. I will also get back to the internal assessment criteria in more detail.  

Early stage concept assessment – Assessment criteria
To make a good job out of this assessment you need to involve qual research with your target consumer or customer. Focus groups, in depth interviews…, mini groups – there are different methodologies to chose from.

I would normally include the following assessment criteria at this stage:
  • Insight relevance – does the insight that the concept is based upon correlate to a prevailing consumer need? Is this needstate large enough to be of importance? And do consumers recognise themselves in this needstate and in this situation? How often? When? Where?
  • Uniqueness – Do consumers perceive the concept to be different to what they’ve seen in the market? Does this difference or uniqueness stand out and is it appreciated as a positive factor?
  • Impact on brand – This is a relevant assessment factor if you plan to add the concept to a branded family where it may have a positive or negative impact on the mother brand and/or other brands in the portfolio. Ask consumers if this concept is something that feels natural or awkward within the branded family.
  • Clarity – is the concept clear and easy to understand? Can you simplify it even further to make it more compelling and easy to grasp?
  • Benefit relevance – Do consumers really appreciate the benefits that this concept offers? Are the relevant and interesting enough for consumers? Are they worth paying for?
  • Price – Since this is an early stage assessment I would only add a couple of short questions to check if the project teams ambitions regarding price point and margin correspond to consumer price expectations.
  • Total market potential – Based on the response to the above criteria I would then make a total summary of the concept potential.
Huh, I’ve done a serious amount of writing now. Have you fallen asleep? I hope this was helpful anyway and as promised, I will get back to the issue of later stage concept assessment as well as internal assessment. Bye!

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