This chapter discusses sources of new business ideas and methods for generating ideas, including focusing on consumers, existing products and services, distribution channels, government resources, and research and development. It describes techniques for generating new ideas like focus groups, brainstorming, brainwriting, and problem inventory analysis. Methods of creative problem solving are outlined, such as brainstorming, reverse brainstorming, the Gordon method, checklist method, forced relationships, and the scientific method. The chapter also details the product planning and development process, from establishing evaluation criteria to taking an idea through the idea, concept, development, and test marketing stages.

1. Hisrich
Peters
Shepherd
Chapter 5
Creativity
and
the Business Idea
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin

2. 4-2
 Sources of New Ideas
 Consumers
Potential entrepreneur can use-
 Informal monitoring the consumers for potential
ideas and needs.
 Formal arrangement for consumers to express
their opinions.
Care must be taken to ensure that the idea
or need represents a large enough market to
support a new venture

3. 4-3
Sources of New Ideas
 Existing Products and Services
 Establish a formal method for monitoring and
evaluating the competitive product and service
on the market
 Analyze to uncover 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. 4-4
 Federal Government
 Files of the Patent Office can suggest new
product possibilities.
 New product ideas can come in response to
government regulations.
 Research and Development
 A formal endeavor connected with one’s current
employment.
 An informal lab in a basement or garage.
Sources of New Ideas (cont.)

5. 4-5
 Methods of Generating New
Ideas
 Focus Groups
 A moderator leads a group of 8 to 14
participants through an open, in-depth
discussion in a directive or nondirective manner.
 An excellent method for generating and
screening ideas and concepts.

6. 4-6
 Brainstorming
 Allows people to be stimulated to greater
creativity.
 Good ideas emerge when the brainstorming
effort focuses on a specific product or market
area.
 Rules of brainstorming:
 No criticism.
 Freewheeling is encouraged.
 Quantity of ideas is desired.
 Combinations and improvements of ideas are
encouraged.
 The brainstorming session should be fun
Methods of Generating New Ideas
(cont.)

7. 4-7
 Brainwriting
 A form of written brainstorming.
 Participants write their ideas on special forms or
cards that circulate within the group.
 Problem Inventory Analysis
 Consumers are provided with a list of problems
and are asked to identify products that have
those problems.
 Results must be carefully evaluated as they may
not actually reflect a new business opportunity.
Methods of Generating New Ideas
(cont.)

8. 4-8
Creative Problem Solving
 Creativity tends to decline with age,
education, lack of use, and bureaucracy.
 Latent creative potential can be stifled by
perceptual, cultural, emotional, and
organizational factors.
 Creativity can be unlocked by using any of
the creative problem-solving techniques.

9. 4-9
 Brainstorming
 Session starts with a problem statement.
 Once the problem statement is prepared, 6 to
12 individuals are selected to participate.
 No group member should be an expert in the
field of the problem.
 All ideas must be recorded.
Creative Problem Solving (cont.)

10. 4-10
 Reverse Brainstorming
 Similar to brainstorming, except that criticism is
allowed.
 A group method that focuses on the negative
aspects of a product, service, or idea as well as
ways to overcome these problems.
 Care must be taken to maintain group morale.
Creative Problem Solving (cont.)

11. 4-11
 Gordon Method
 Method for developing new ideas when the
individuals are unaware of the problem.
 Solutions are not clouded by preconceived ideas
and behavioral patterns.
 The entrepreneur starts by monitoring a general
concept associated with the problem.
Creative Problem Solving (cont.)

12. 4-12
 Checklist Method
 Developing a new idea through a list of related
issues.
 The entrepreneur can use a list of questions or
statements to develop new ideas.
 One general checklist is as follows:
-- Modify? Change meaning, color, motion, odor,
form, shape? Other changes?
-- Magnify? What to add? More time? Greater
frequency? Stronger? Larger? Thicker?
Creative Problem Solving (cont.)

13. 4-13
 Checklist Method
 One general checklist is as follows:
-- Minify? Smaller? Condensed? Miniature?
Lighter? Omit?
Creative Problem Solving (cont.)

14. 4-14
 Forced Relationships
 Developing a new idea by looking at product
combinations.
 A five step process which focuses on generating
ideas from relationship patterns between
elements of a problem.
 Collective Notebook Method
 Developing a new idea by group members
regularly recording ideas.
Creative Problem Solving (cont.)

15. 4-15
 Heuristics
 This method involves using thoughts, insights,
learning, an intuitive judgment, or common
sense for solving problem.
 Scientific Method
 Developing a new idea through research,
experimentation, observation.
 This approach involves defining problems,
gathering and analyzing the data, developing
and testing potential solutions, and choosing the
best solution.
Creative Problem Solving (cont.)

16. 4-16
 Attribute Listing
 Developing a new idea by looking at the
positives and negatives.
 Big-Dream Approach
 Developing a new idea by thinking without
constraints.
Creative Problem Solving (cont.)

17. 4-17
Product Planning and Development
Process
 Establishing Evaluation Criteria
 Criteria should be established at each stage of
the product planning and development process.
 It should be all-inclusive and quantitative in
nature.
 Criteria should evaluate the idea in terms of:
 Market opportunity.
 Competition.
 Marketing system.
 Financial factors.
 Production factors.

18. 4-18
Figure 4.6 - The Product Planning
and Development Process

19. 4-19
 Idea Stage
 Promising ideas should be identified and
impractical ones eliminated.
 Evaluation method – Systematic market
evaluation checklist.
 Determine the need for the new idea as well as
its value to the company.
 Concept Stage
 Refined idea is tested to determine consumer
acceptance which can be measured through the
conversational interview method.
Product Planning and Development
Process (cont.)

20. 4-20
 Product Development Stage
 Consumer reaction to the product/service is
determined.
 A consumer panel is given a product sample and
preference is determined through methods such
as multiple brand comparisons, risk analysis,
etc.
 Test Marketing Stage
 Increases certainty of successful
commercialization.
 Actual sales reflect consumer acceptance.
Product Planning and Development
Process (cont.)

21. 4-21
THE END OF THE CHAPTER