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Value Chain Marketing: Mere Idea versus Good Idea Analysis

 

 

[Editor’s note: This installment is part of an ongoing series. You can start at the beginning in order to follow its logical sequence.]

product idea evaluationby Kenneth Rudich

When seriously contemplating the market feasibility of a product or service idea, one must distinguish between the personal tendency to subjectively like it, and the dispassionate necessity to objectively appraise it.

The intersection of these two perspectives forms a critical juncture for differentiating a mere idea from a good idea.

Regardless of whether the enterprise is a start-up or established, large or small, product-oriented or service-driven, certain aspects of this marketing ritual are universal in nature.

An idea is a thought or suggestion as a possible course of action. It’s commonplace for ideas to come and go like flames on matches, especially as it pertains to tinkering with them under the guise of giving birth to a product or service.

Statistically, most of these have little-to-no staying power, even among those that seemingly stand apart as the offspring of a lightbulb moment or the Eureka Effect. A majority are mere ideas and nothing more.

product idea evaulationBut for the sake of argument, let’s say you land on a kernel thought and it appears to have the right stuff to be genuinely good.

Good ideas come armed with a capacity to meet certain benchmark criteria, which can be summed up in three words: attractive, competitive and sustainable.

Weighing the idea against these benchmark criteria is simply imperative. It endeavors to find what is knownproduct-market fit as a product-market fit.

Software engineer, technology innovator and Silicon Valley venture capital partner Marc Andreesen explains this concept as being in a good market with a product that’s able to satisfy it.

The critical difference, then, is that a mere idea foresees a plausible market, while a good idea seeks to gauge potential demand.

The first hangs hope on a handful of mostly subjective assumptions, whereas the second derives understanding from the scrutiny of a largely objective analysis.

These two perspectives need not be regarded as incompatible or mutually exclusive. Each is important in its own way, and they can happily sit side-by side provided you maintain respect for the distinctly different roles that they play.

Let’s position their relationship in this way: the first is important — perhaps extremely important — and the second is a must. Together they form a near immaculate conception, an idea born of passion yet tempered by reason.

The first, by the way, often gets referred to as a founder-market fit. It suggests a meaningful relationship exists between the inventor/champion of the idea and the idea itself. The best of these generally come with unique insights drawn from real-world hands-on experience.

The founder-market fit can be just as important as the product-market fit, especially during the inception stage of a launch — and especially for startups — insofar as it often fuels the resolve, along with the knowledge, to get past the early hurdles and bumps.

Identifying Potential Demand

Proof of ConceptFleshing out potential demand typically entails the performance of a Market Opportunity Analysis (MOA).

The MOA takes stock of what you have to work with. It offers a higher degree of preparation for making prudent, and frequently pivotal, decisions — especially as they relate to understanding the nature and scope of the potential demand, and how to craft the value proposition.

It’s like having a flashlight to help guide you, as opposed to blindly groping in the dark.

A second form of evaluation, which typically comes on the heels of the MOA, is to run a provisional test for demonstrating Proof of Concept. This usually involves the employment of focus groups; and/or the deployment of a prototype, or rapid prototyping, or a minimum viable product (MVP); and/or a small trial rollout to potential customers in a certain region, locale, segment, niche or other prospective market.

The proof of concept evaluation provides a mechanism for actively probing consumer interest, acquiring feedback and deploying iterations before plunging into a deep pocket commitment or scaling up prematurely. It affords the wiggle room to add here, subtract there, or otherwise refine the core idea prior to hitting critical mass — that stage where first reactions carry the risk of turning into fixed and lasting impressions.

A customer-oriented marketing organization with real-world experience would never proceed without availing itself of this feeling out process. For example, Chipotle added a new menu item in October 2016 to all its U.S. restaurants, a chorizo, but not before test-marketing the spicy sausage in Manhattan, San Diego and other markets in June, where it reportedly was a hit.

value chain for marketingA favorable test yields a first success story, or the first bit of social proof, for closing a distribution agreement, solidifying an investor pitch, or endowing the product with a jumpstart prior to full market release.

At the very least, a demo can be assembled around the gathered information to show off a product’s features or better articulate its allure, in view of what customers appear to want — compelling intel about who, what, why, where and how.

You may not like the results of this exploratory mission, or perhaps you’ll be delighted. Either way, you’ll have subjected the idea to the one and only litmus test that really counts. As highly esteemed business scholar Peter Drucker wrote, “The customer is the foundation of a business and keeps it in existence.”

With that in mind, let’s delve into an introductory overview of the criteria for a genuinely good idea — that is, the composite mix of attractive, competitive and sustainable.

Continue: Value Chain Marketing — Product/Service Attractiveness Pt 1/2 

Twitter: http://twitter.com/KenRudich
LinkedIn: http://www.linkedin.com/in/KenRudich
Email: ken@marketing-strategy-management.com

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