creating and starting the venture1
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CREATING AND STARTING
THE VENTURE
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SOURCES OF NEW IDEAS
1. Consumers
2. Existing companies
3. Distribution channels
4. Research and development
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Methods for generating ideas
1. Focus Groups
2. Brainstorming
3. Problem Inventory Analysis
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Focus groups
Group of individuals providing information in
a structured format.
Group of 8-14 participants In use since 1950s
The focus group is an excellent method for
initially screening ideas and concepts.
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Brainstorming
A group method for obtaining new ideas and
solutions
People can be stimulated to greater creativityby meeting with others and participating inorganized group experiences
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Rules for brainstorming
1. No criticism is allowed by anyone in the group-no negative comments
2. Freewheeling is encouraged-the wilder the idea,the better.
3. Quantity of ideas desired-the greater thenumber of ideas, the greater the likelihood of useful ideas emerging
4. Combinations and improvements of ideas areencouraged-ideas of others can be used toproduce still another new idea.
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Problem inventory analysis
A method for obtaining new ideas and
solutions by focusing on problems
Consumers are provided with a list of problems in a general product category
They are then asked to identify and discuss
products in this category that have theparticular problem
Can be used to test a new product idea for
further evaluation
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Creativity and problem solving
techniques Brainstorming
Reverse brainstorming
Forced relationships Scientific method
Attribute listing
Matrix charting Inspired(big-dream)approach
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Brain-storming
Most well-known and widely used technique
for both creative problem solving and idea
generation. Unstructured process for generating all
possible ideas about a problem within a
limited time frame through spontaneous
contributions of participants
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Process of brain-storming
Session starts with a problem statement that
is neither too broad nor too narrow
6-12 individuals are selected so that a widerange of knowledge is represented
All ideas, no matter how illogical must be
recorded, with participants not being allowedto criticize or evaluate during the
brainstorming session
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Reverse Brain-storming
A group method for obtaining new ideas
focusing on the negative.
Criticism is allowed-in how many ways thisidea can fail'? care to be taken of groupmorale
Can be effectively used before other creativetechniques to stimulate innovative thinking
Identification of everything wrong with the
idea and ways to overcome these problems
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Forced relationships
Developing a new idea by looking at productcombinations.
It is a technique that asks questions about objects or
ideas in an effort to develop a new idea Five steps-
1)isolate the elements of the problem
2)find the relationships between these elements
3)record the relationships in an orderly form 4)analyze the resulting relationships to find ideas or
patterns
5)develop new ideas from these patterns
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Scientific method
Developing a new idea through inquiring andtesting.
Consists of principles and processes,conducting observations and experimentsand validating the hypothesis
The approach involves the entrepreneur
defining the problem, analyzing the problem,gathering and analyzing data, developing andtesting potential solutions, and choosing thebest solution
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Attribute listing
Developing a new idea by looking at the
positives and negatives.
To list the attributes of an item or problemand then look at each from a variety of viewpoints
Originally unrelated objects can be broughttogether to form a new combination and
possible new uses that better satisfy a need
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Matrix charting
Developing a new idea by listing important
elements on two axes of a chart
Important elements for the product areaalong two axes of a chart and then askingquestions regarding each of these elements
E.g. where can it be used? who can use it?when can it be used? how can it be used?
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Big-dream approach
Developing a new idea by thinking aboutconstraints.
Requires that the entrepreneur dream about theproblem and its solution-THINKING BIG.
Every possibility should be recorded andinvestigated without regard to all the negativesinvolved or the resources required
Idea should be conceptualized without anyconstraints until an idea is developed into aworkable form
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Product planning and
development process The stages in developing a new product are:
1. Idea Stage
2. Concept Stage3. Product Development Stage
4. Test Marketing Stage
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Idea stage
First stage in product development process.
Promising new ideas should be identified and
impractical ones eliminated in the idea stage. Product idea is expressed in terms of its chief
values, merits and benefits.
Consumers are presented with cluster of newproduct values to determine selection
If there is no need for the suggested product,
its development be discontinued
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Determining the need for a new
product idea Type of need
Timing of need
Competing ways to satisfy need Perceived benefits/risks
Price v/s.Performance features
Market size and potential Availability of customer funds
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Determining the value for a new
product idea Cash Outflow
Cash Inflow
Net Cash Flow Profit
Relative Term
Compared To Other Investments
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Concept stage
Second stage in product development
process.
Initial reactions to the concept are obtainedfrom potential customers or members of thedistribution channel when appropriate
Favorable features be incorporated into theproduct
Features, price and promotion should be
evaluated.
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Product development stage
Third stage in product development process.
Evaluation on the basis of:
a. Consumer panelb. Product sample
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Test marketing stage
Last step in the evaluation process
Provides actual sales results, which indicate
the acceptance level of consumers Positive test results indicate the degree of
probability of a successful product launch and
company formation