This chapter discusses sources of new ideas for businesses, including consumers, existing products/services, distribution channels, government, and R&D. It also covers methods for generating ideas like focus groups, brainstorming, and analyzing problems. The chapter defines innovation and different types. It classifies new products and distinguishes new products from new markets. Finally, it outlines the five major stages of product planning and development and emphasizes establishing evaluation criteria at each stage.

1. Chapter 4
Creativity and the Business
Idea

2. SOURCES OF NEW IDEAS
1 Consumers
2 Existing Products and Services
3 Distribution Channels
4 Federal Government
5 Research & Development

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

4. Sources of New Ideas
(cont.
• Federal Government
a. New product ideas can come in
response to government regulations.
Ex. first aid kits has to contain specific item, responding to the safety
and
health act , Entrepreneur get a new idea for the first aid kits .
B. the files of the Patent Office contain
numerous new product possibilities.

5. • Research and Development
a. A formal endeavor connected with one’s
current employment.
A more formal research and development department is often
better equipped and enables the entrepreneurs to
conceptualize and develop successful new product ideas

6. METHODS OF GENERATING IDEAS
1 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.

7. INNOVATION
The use of a new idea or method
Types of Innovation
1. Breakthrough Innovation
2. Technological Innovation
3. Ordinary Innovation

8. Classification of New Product
• Continuous innovation:
products are upgraded and updated regularly in relatively small ways
that make no great changes to the customer's buying behavior.
ex. (autmobiles style changes, fashion style changes, product size or
color changes)
• Dynamically continuous innovation:
the introduction of new products with an element of significant
innovation that could require major reassessment of the
product within customers' buying behaviour. (CDs, iPod,
Sony Walkman)

9. Cont.
• Discontinuous innovation:
represents a completely new product concept unlike anything
the customer has yet experienced, and thus involves a major
learning experience for the customer with much information
searching and evaluation.
• 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

10. The major distinctionbetweennew 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

11. Product Planning and Development
Process
• The product planning and Development is
divided into 5 major stages Idea Stage
1. Concept Stage
2. Product Development Stage
3. Test Marketing Stage
4. Commercialization Stage (PLC)
5. Establishing Evaluation Criteria.

12. Establishing Evaluation
Criteria
1 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.