MODULE 2: RECOGNIZE THE POTENTIAL NEEDS

New Product/Services Idea Generation

New Product Sources
1. The Consumer
✓ Understand the needs and wants of the people who are going to patronize the
product. Submit potential ideas in accordance to the needs of the consumer.
2. The established Products and Services in the Market
✓ Also, monitoring the existing products and services in the market place could
help your product idea generation become even more credible in what
product/service to offer in the market.
3. The Distribution Channels
✓ It will help you suggest and market new product
4. The Government (Government Regulations)
✓ Records from the Patent office can give you idea what to offer in the market
5. Research and Development
✓ Research for a particular product/service (feasibility study is highly
recommended) it will help you understand the needs of the market.
Ways of Generating New Product/Service
1. Focus Group Discussion This is a very good way for generating and screening ideas
and concepts. It will teach entrepreneur to be more creative in developing what
product/service to offer. 2. Brainstorming If the entrepreneurs have an area where
he/she can focus on, the effective development of idea can occur. This is through the
help of brainstorming. 3. Problem Inventory Analysis It’s a kind of researching
product/service that has weak points in the market. Identifying those
products/services will lead you to business opportunity.
SWOT Analysis Tool
A tool that entrepreneurs can use to help them decide what is the most suitable
business idea they could introduce in the market is SWOT Analysis. It will also help
them to focus on the possible problem that arises in the particular product/service
and the potential advantages of each ideas.
S= STRENGTH (Internal) W= WEAKNESS (Internal)

O= OPPORTUNITY (External) T= THREATS (External)

Internal Factors
- Strengths- are the specific positive aspects which will give your proposed business
an advantage over similar business ventures and the competitors. - Weaknesses- are
the things that your business will not do as well as other businesses.
External Factors
- Opportunities- are on-going potential developments that will be good for your
business. - Threats- are events that may negatively affect your business.
If you already identified your SWOT, try matching your strengths and opportunities to
ascertain whether or not they will give your business an advantage.
For example:
Costumers are looking for a service that matches your proposed product/service
(that’s opportunity) and you are very service oriented and care about details (that’s
strength), you may be creating a big advantage for your proposed business.
Weaknesses and Threats can also be matched to determine if you can improve your
weak points to cope with the threats.
 Sample data using SWOT Analysis in a particular business:
SWOT Analysis
BUINESS IDEA: Car Wash Business
Strengths Weaknesses
• I have some work experience in car wash business• I do not have an available spot for
• I love seeing different car the business
• I enjoy meeting people • I do not have many source of
• I am good in car washing materials needed in the business
• I have no experience managing staff
Opportunities Threats
• There is no other car wash business shop in the • The business is easily copied I might
town lose my market share
• Other shop are expensive • The cost of renting the shop space
• People in the community has a car for daily is high
transportation
• Number of people who wants to have a car are
continuously increasing
Target Market Identification
The very big question an entrepreneur needs to answer is to whom he will be able to
sell his product/service? Every business cannot succeed without a customer.
Therefore, it is very important to know who your customer will be.
Target Market Definition
A target market is the specific group of people you want to reach with your
marketing message. They are the people who are most likely to buy your products or
services, and they are united by some common characteristics, like demographics
and behaviors.
A marketer is one who is responsible in defining the target market. It’s the foundation
of all elements of your marketing strategy, starting from how you develop and name
your products or services right through to the marketing channels you use to promote
them.
Survey of Market Size (To recognize a potential market for a particular
product)
Every entrepreneur need to understand the different sets of questions when
assessing or recognizing a potential market for a particular product. It is needed to
picture out the size of the market for a particular type of product/service and the
value of the market (the amount of money spent on that product each month or
year).
It is also possible to collect data and information about the types of people who buy a
particular product/service and where they buy it. (May help also, the entrepreneur to
identify his target market)
The information gathered from potential consumers can be analyzed by the
entrepreneur to get a good idea of the quality characteristics of the product that
consumers prefer, the total demand for the product/service and the total value of the
market.
This involves making a number of assumptions and it is important to
consider the following:
1. Are the people interviewed really representative of all potential consumers?
2. Was the number of people interviewed enough?
3. Were people giving accurate information?
Competitors
Competitors are very important to the success or failure of a new business. The
entrepreneur should recognize that there are different types of competitors.
✓ General competitors
✓ Type competitors
✓ Brand competitors