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Article written by Gareth Loudon of Light Minds Ltd
When developing a new product or service many business advisors encourage businesses to undertake market research, and rightly so. Traditional market research work can study different market segments, highlight the size of the market, who the competitors are (and what they are doing) and even future trends for the market. Business advisors will also encourage businesses to undertake a SWOT analysis (strengths, weaknesses, opportunities and threats) to help with strategic planning and encourage them to conduct a study into the protection of their new ideas via patenting. However that is often where it stops. If it looks as if there is a market big enough to make a profitable product, the product is unique in the market and the product can be protected (via patenting or some other means) then businesses are commonly encouraged to dive into the expensive product development phase. After all, time to market is important.
Often, too little attention is given to whether the product actually has a useful purpose, whether the product would be easy to use and whether the product would be appealing to the target customer. Businesses, business advisors and even investors are sometimes guilty of glossing over these issues and relying on a hunch without conducting the necessary research. Businesses who dive into the product development phase straight after conducting market research are taking a very high risk strategy. It seems much more sensible to study whether the new product idea meets the needs of the target customers first, by conducting some initial customer research. Not just to ask customers what they want or if they like the new product idea or not, but to see if the new product could really add value.
Early customer research work can help clarify key product design and product positioning issues that must be right to give the new product a better chance of success in the market. One customer research method widely used in industry today to gain customer insight is called ethnographic research. Ethnography is the study of people’s everyday lives. Ethnography goes beyond questionnaires and focus groups and uses participant observation and interviews to capture and describe customer behaviour, beliefs and values. Ethnography can be used to uncover discrepancies between what people say they do and what they actually do; to identify needs that people can’t articulate explicitly; and to describe how products and services are used and the meaning people attached to them. Please check out some of my previous articles as well as the Light Minds website and links to learn more about the use of ethnography in new product development.
My personal experiences are that far too much money is wasted unnecessarily in new product development because businesses have rushed into the product development phase straight after the market research stage. Finding and fixing problems once detailed prototypes have been made, or even after the new product has been launched on the market is a very expensive way to run a business. Early customer research can help avoid some of these problems and can help put in place a clear product design and marketing plan.
from Gareth Loudon of Light Minds Ltd
Article by Gareth Loudon of Light Minds Ltd
Statistics on the success rates of new products show that for every four new products that enter development, only one becomes a commercial success. In the UK, at least 50% of new products fail within their launch year. The healthcare sector is particularly challenging.
Previously I described the importance of meeting a customer need and the benefits of using ethnographic research to discover new product opportunities or to evaluate existing products. But you still need to translate these insights into product solutions.
There are three very simple but key elements that you must consider when designing your new product solution.
Firstly, your new product must have a clear useful purpose and address a need from patients, carers or administrative staff. This purpose can be derived using the ethnographic research approach described previously. If your product does not have a clear and useful purpose that meets a need you are going to struggle.
Secondly, the use experience of your new product must meet or surpass expectations. It is not good enough just to have a clear use for the product. The design of the product must to be easy to learn and use.
Thirdly, your product must be desirable and appropriate. This affects not just the physical design of the product but everything associated with the product from packaging to marketing.
When you are creating and designing a new product you must consider the use of the product (what does the product do), the level of usability of the product (how does it work, can it be used comfortably) and the meaning that the product conveys. Meaning refers to its aesthetics, cultural messages, inherent symbolism and the metaphors it incorporates. Well-designed products consider both function (use and usability) and meaning as both affect a person’s total perception of the product. “Often the product’s meaning is most influential in the customer’s purchase decision and in the creation of a positive ownership and use experience”, (Sara Beckman & Johannes Hoech, Harvard Business Review, 2000).
However every product that you create should also have a consistency with regard use, usability and meaning covering product development, design, manufacturing, marketing, branding, advertising, packaging, etc. You cannot create a meaning of quality and elegance through design, packaging and advertising if the product’s use and usability are not of equal quality and elegance. As Michael Barry (an inventor of many successful products) puts it, “a successful product is the physical embodiment of a strategy that aligns users, technology and culture”.
When you are creating and designing your new product, take a step back for a moment and ask yourself about its use, usability and meaning. I think you will find it a useful exercise. All elements have to be spot on in order to create a successful product solution. The next article in the series will comment further on the power of prototyping, role play and product testing and how they can be used to study the use, usability and meaning of your new product.
By Gareth Loudon, co-founder of Light Minds Ltd
Article written by Gareth Loudon of Light Minds Ltd
You have probably heard many times that products must meet a customer need to be successful. However if you are in the situation where you are developing a new product in the healthcare industry, how do go about discovering whether your product will meet the needs of patients, carers and key decision makers? This can be a difficult task, as quite often, they cannot tell you what they want. And if they can, that still might not lead to the creation of a successful new product. Research by Professor Clayton Christensen from the Harvard Business School finds that leading companies who have followed what their customers say have lost out to new innovations from other companies. This he has called “The Innovators Dilemma”. If this is true then maybe the traditional way of conducting market research is not adequate in the quest for discovering unmet customer needs and creating new disruptive product opportunities. What people say they want (and do) should not be the only deciding factor in creating new disruptive product innovations. So what are the alternatives? A new approach starting to become more widespread in industry is to conduct in-depth customer research and to treat potential customers as participants in the new product development process. In simple terms the approach is to
- Listen to what potential customers have to say.
- Observe what they currently do.
- Observe what they currently use.
In formal terms, this approach of in-depth customer research is known as ethnographic research and is defined as “the description and study of human culture”. It originates from anthropology where anthropologists spend significant periods of time with people from a specific cultural group and make detailed observations of their practices. Cultural groups could be tribes in the Amazon rainforest, teenagers, hospital patients, organizations and so on. In the area of new product development the customer research is conducted in a much shorter time scale to fit the needs of industry and is known as applied ethnography or rapid ethnographic research. However the research is still conducted in-context and takes place where people live and work, for example in homes, offices, hospitals etc. The power of taking such an approach is that it provides real life accounts of customers’ everyday activities, their behaviours, beliefs and values and highlights the differences between what people do and what they say they do. As a result needs are found that have not been directly expressed. Companies including Microsoft, Ericsson, IDEO, PDD, Light Minds and Kimberley Clark are using this approach to discover new product opportunities and also to evaluate products that are in the development stage. For example, Intel used ethnography to help develop some of the Allscripts Healthcare Solutions (www.allscripts.com). Bath University used ethnographic research to help design new information systems for the waiting rooms of Hospital emergency departments. It is also interesting to note that most of the new product ideas for the healthcare industry in the UK are coming from clinicians. I suggest this is because they are using ethnographic research techniques routinely (knowingly or not) as part of their everyday work. Once you have identified unmet needs of potential customers the next challenge is to make sure you translate these findings into a successful new product solution.
Gareth Loudon is a co-founder of Light Minds Ltd.
