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”.

For example, a customer may find it inconvenient to shop around for a product, and they may also experience problems when they try to dispose of a product.  Therefore we need to understand where, in terms of time, the need is coming from.  For example, needs can arise:

  • Before Purchase
  • During Purchase
  • During Use
  • During Disposal
  • During Repurchase


You can also understand customer needs by thinking about how a journalist might question someone about a story.  They'd ask the following 5 questions to really understand what's going on.

  • Why – why did a customer buy a product?
  • When – when did they buy it?
  • Where – where did they buy it?
  • How – how did they buy it (what steps did they go through)?
  • Who – who bought it?


If you take the ideas we just discussed, and put them in a picture form, you could come up with a way to visualize where customer needs come from.

You can see that thinking in 3 dimensions means that you could ask people more insightful questions than “why did you buy my product?”

Instead, you would approach the situation by focusing on various parts of the cube.  For example, start with current customer needs and ask customers why are they using the product, when are they using it, where, etc.  You would also ask them about, say, the product during purchase, disposal, and repurchase.

Let's make this more concrete by focusing on just 1 dimension of this cube: Current Needs, but asking the type of journalist questions we talked about above.

  • “Why are you using this product and what do you gain by it?” (Why)
  • “On what occasions do you use this product?” (When)
  • “Where do you usually use this product?” (Where)
  • “Tell me in detail exactly how you use this product, and are there other products you use with this product?” (How)
  • “Who are the usual users of this product?” (Who)

We just looked at one small dimension of this 3 dimensional cube; so imagine doing this for all possible combinations.  Now you can start to see why we said that this process generates a lot of information about customer needs.


When you think about it, there are a reasonably limited number of ways to solve a customer's problems.  Wherever the need comes from, the following different types of solutions can satisfy them:

  • Reduction of Time required
  • Reduction of Effort required (including physical, mental, and emotional)
  • Reduction of Financial Costs (including complementary products, maintenance and repair)
  • Enhancement of sensory benefits (including visual, taste, texture, sound, etc.).

So now, imagine how you might solve the various customer needs we talked about before, using all the dimensions of the cube, and satisfying these needs through either reduction of time, effort, costs, or enhancement of sensory benefits.

This is the challenge of new product ideas.  But, hopefully you now see a broader way of thinking about this problem and feel optimistic that you too can uncover the needs of customers and build products that don't fail in the market.

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image of C.W. Park

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.