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How to Generate Effective New Product Ideas

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While there are a great number of new products every year, history shows that less than 30% of new products and services actually generate enough sales to stay afloat.  So, the question of how to design a new product or service has been one of the most puzzling questions.

To untangle this question, and try to provide insight into how to understand what customers really want, let's consider a systematic approach to understanding customer needs.

Using a systematic approach will get you out of the trap of thinking that customers don't know what they want.  You will also more likely come up with a product that customers really want or need.  But there is one more important benefit.

By using a systematic approach, you are more likely to generate more ideas, more effective ideas, and increase the chance for success.


To find new product ideas you have to start by thinking about the different types of customer needs.  For example, we can think of at least four different types of needs:

  • Current Needs – or the needs already recognized by customers.
  • Potential Needs – the needs other than current needs, but not recognized by customers yet.
  • Problem Needs – the needs related to recognized problems (these are typically the ones that improve existing products)
  • Potential Problem Needs – or how to add value to current product or usage


All the different types of needs arise at various points along a “consumption chain”.

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C. Whan Park is the Robert E. Brooker Professor of Marketing at USC's Marshall School of Business. He is co-author of a recent book on brand admiration, which blends years of best-practice thinking from academia with the real-world practice of marketing. He is internationally recognized as one of the most frequently cited researchers in the area of consumer behavior.

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