Practical Marketing Magic


Here is a simple cost effective approach your team can use to decide if a new product, service or process idea is worth the time, effort, and money needed to develop it into a profitable opportunity?
by Ron LaReau

Market Information and its effective use is vital to our industry’s future. The explosion of data sources, personal computers, the Internet and statistical models will enable a business to acquire and maintain a history of user information. How-ever, to achieve new or expanded market penetration, segmentation, or product development objectives, it’s necessary to have an orderly process and rating system for evaluating promising new ideas in distribution, processing, sales, inventory control or service.

It’s easy to be overwhelmed by the kaleidoscope of expensive computer hardware that can be used to simplify the task. However, I am suggesting an alternative method that requires the investment of a firm’s human resources, its people, their intelligence, experience and skill.

Building Ideas
The approach is called the idea model. The idea model is designed to enhance the likelihood that new ideas selected will lead to ultimate success.

The first step in building the idea model is idea generation, followed by idea screening. The process is similar to the steps in effective decision-making. First, identify the problem; second, determine alternatives; third, take action that leads to an adequate solution. The difference is that idea generation is an opportunity orientation with an initial no-holds- barred approach in which any idea or alternative may have value.

There are four approaches to idea generation:

  • Idea collection
  • Idea sifting
  • Creativity sessions
  • Primary research.

Idea Collection
Ideas can come from many sources and are sought during the collection phase from current customers, prospects, global products or service systems, and company employees.

Idea Sifting
Idea sifting is reviewing information by evaluating past periodicals, and dusting off abandoned projects.This collected and sifted information can serve as creative inspiration, which is then compared to current market observations. The combination can often yield an exciting new technique, tactic, product or service strategy.

There are two basic drawbacks to the model as described thus far. First, there is no direct input from a user or receiver of this product or service. The method cannot reflect the behavior or thinking of the prospect or current customer who ultimately dictates success or failure.

Second, since it is an intentional freewheeling exercise, it does not reflect the needs, capabilities, or restrictions of the company.

Research on the company’s existing product line and service systems can also yield reliable ideas. These ideas are further segmented and evaluated to determine additional opportunities.

The value derived from this research comes from interpolation, or reading between the lines. The findings here have a basis in actual consumer behavior and thinking as reflected in marketplace conditions.

Creativity Sessions
Structured creativity sessions can be organized around several techniques to maximize the creative output of a team. These sessions tend to be among the most prolific sources of ideas and options. They generate output that is consistent with the capabilities and resources of the company.

However, this output again does not reflect consumer thinking or behavior.To gain insights into customer thinking we should involve the sales force and the service personnel. This option can help to specifically evaluate identified ideas and prioritize the opportunities through a simple Q & A survey. Thus determining the viability of these ideas in the minds of the current customer or prospect.

Primary Research
What we are defining are two quantitative research approaches that lend themselves to idea generation, problem detection, and preference or perception manipulation. Problem detection is a method to determine the customer or prospect’s needs, the importance to the prospect, and the adequacy that current products or services have in satisfying those needs.

A preference or perception manipulation study tries to identify the structure of the market or product category from the consumer’s point of view. Products that are similar appear close together on a perception map. The factors underlining and shaping the market structure are identified and dictate the positioning of the product or service being studied.

This information gives a company two options. First, it describes the gaps or holes in the market that can be pursued. Second, it defines a new product or service that can be based on one or more of the shaping factors identified in the study. The latter approach is feasible if the products or services physically or psychologically differ from those presently filling the need.

The appearance mat and the safety mat are examples of this type of manipulation. It may be argued the strategy is cosmetic and invites too much competition, but competition appears where there is a dollar to be made.

Idea generation, then, is nothing more than a mining operation. It is up to the idea screening process to identify legitimate opportunities and as usual, the explanation of the procedure is far simpler than its execution. Assuming the idea generation phase has provided 20 raw ideas for products or variations to services, the financial and human resource limitations of a firm could prevent the company from pursuing all the options.

Some of the core ideas may have considerable merit. Others have little merit and the rest are somewhere between those two extremes. The challenge is to isolate the ideas with the most potential, screen out the weak ones, and make certain available resources are being put to the best use.

A conceptual model can be determined by which to measure and structure end user response. The model should be simple so it can be applied to multiple product or service categories under a variety of business conditions.


The idea screening model presented here can best be described with the terms “reach,” which means acceptance, and “frequency,” which means the number of times the product or service would be turned or used. The first question to ask when evaluating a product idea is whether the prospect has a need for it. Assuming that zero prospects from a sufficiently large sampling do not have a need for a product or service, the product or service can then be dismissed.

If there is a need, the next question is, “How well are existing products or services meeting that need?” if the identified need is not being addressed or is not being met quite the way the product or service idea would meet it, the idea is distinctive or unique.

Also, the company must determine if consumers are interested in renting, purchasing, or using the product or service. This last hurdle is, in many ways, an obstacle in itself.

The fusions of these three measurements represent the concept of reach. All three variables deal with the notion of acceptance, but they approach it from different angles. If a product line succeeds somewhat in all three, it has potential.

Reach, alone, is not enough. The frequency of potential use also must be considered. A product might have tremendous reach, but if it will be used infrequently, the potential is questionable. For example, the acceptance of disposable towels in the ’70s showed tremendous reach, but the typical consumer had difficulty using the supply furnished in an appropriate service cycle – weekly, every four weeks, etc. – and delivery consistency was lost. With an unpredictable frequency, the disposable programs, for the most part, were dropped.

Each occasion on which a model is applied tends to take on a shape of its own; thereby exploiting the flexibility of the model. An idea in Quadrant I, for example, might not be the best for a particular company because it would lead it into an inhospitable arena.

A company’s interest in marketing does not mean trying to capture all markets at the same time. It must concentrate its limited resources or it loses the concept of focused specialization. The possibility always exists that a Quadrant I idea will spell early success for a company that may be out-maneuvered by a competitor with advantages in financing, processing, service or marketing savvy.

A Quadrant II idea with high-reach and low frequency may be perfect for a company with unused processing capacity and a distribution system. For example, a seasonal product can be processed and serviced when the company may be experiencing a seasonal slowdown.

With low-reach and high frequency, Quadrant III ideas often appear as a too narrowly defined market segment. An example would be renting blazers to automotive sales personnel of a textile rental customer currently receiving rental merchandise for its mechanics. If the company already is servicing the segment, such an idea may be worth pursuing. Otherwise, the idea’s worth is doubtful.

The simplicity of the model makes it suited to any given situation, service, or product category. At the same time, it matches the unique strengths and weaknesses of a given company with the needs and thinking of its prospective customer or current customers. All in all the idea generation and screening process, using the creativity of the people within your organization can and will produce real winners.

Ron LaReau is president of LaReau Associates, a Wilmington, NC, consulting firm that assists companies in developing and implementing marketing and sales strategies and management programs. He can be reached at (910) 256-9225.

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