Critical Assessment Factors for New Products

 

Summary

If you are either inventing a new product or considering developing a new product to add to your existing product lines, there are a number of critical factors to consider in assessing how practical this is. The following is a listing of several factors you should consider:

Technical Factors

Function

To what limits will your product function as you have designed or intended it to do?

Production

Can your product be produced at a reasonable and beneficial cost?

Societal Factors

Legality

Is your product subject to any laws that limit, restrict, control, regulate or ban such things as production, ownership, distribution, or operation of the product?

Safety

Is your product dangerous; even if it is not used properly?

Environment

Will your product contribute to degradation of our natural resources?

Quality of Life

Will your product generate a net benefit to society?

Marketing Factors

Potential

Is your share of the total market adequate for viable business activity?

Price

What degree of price stability can be reasonably anticipated for your product?

Penetration

Is there adequate revenue potential in a reasonable time frame to justify the effort required?

Predictability

Will changes in market demands be evident in time for adequate management decisions?

Dependence

Does your product depend on the sale of other products to be a success? Would demand for your product fade if that other product was removed from the market?

Demand Curve

Will the demand for your product last long enough to enable you to make a reasonable profit?

Development Potential

Can your product result in a family of products from which you can profit?

Compatibility

Does your product harmonize with current behaviour patterns and ways of doing things?

Learning

Can customers easily understand the correct use of the product?

Need

Does your product solve a pressing problem or fill an urgent need for the customer?

Visibility

Are the advantages and benefits of your product self-evident when the customer hears about your product?

Promotion Cost

Will the cost of promoting your product be reasonable in relation to production cost?

Distribution

Will your product fit easily into established distribution networks, or will it stand alone?

Business Risk Factors

Appearance

How does the customer judge the appearance of your product versus the alternative?

Function

Does your product work better than the alternatives?

Durability

Will your product last longer than others?

Service

Will your product require less routine service than the competitors?

Price

Do you have a price advantage?

Existing Competition

Is there a serious competitive threat in the market already?

New Competition

Can you anticipate significant, new competitive elements in the near future?

Protection

Does there appear to be a potential to protect your product through patents, trade secrets or other means in a way that is commercially worthwhile?

Stage of Development

How much additional effort and resources are required to bring your product to a marketable or a license ready state?

Research and Development

What magnitude or complexity of applied development will be required to sustain your product in the marketplace?

Marketing Research

What magnitude of effort will be required to define the product, place, price and promotion that the whole marketing channel finds acceptable?

Marketing Investment

Is a much larger investment required to bring the product to market?

Payback Period

Is the time required to recover your investment shorter than the peak demand threshold?

Profitability

Is there real potential to generate adequate profits to make the venture viable?

Commercialization

License

Does your product have more potential and greater returns in the form of royalties or assignment fees?

Existing Business

Can your product be suitably commercialized from within your own existing business?

New Business

Would commercial advantages be served if your products were used to establish a new business?

Part-Time

Could you effectively manufacture and sell your own product on a part-time basis?

Prepared by: Saskatchewan Regional Economic and Co-operative Development