creativity and business ideas.....

Creativity
and
Business Idea
Chapter-4

A. Idea Germination: Idea germination occurs before the innovation
finally takes place.
The inconvenience that he/she is facing
Personal insights blended through curiosity to solve a problem
B. Preparation: This phase is characterized by acquisition of necessary
information and materials required to practice the germinated idea.
C. Incubation(development):
Daydreaming, thinking about the problem before going to the bed,
starting to work on the different dimension of the idea etc.
D. Illumination (Enlightenment ): This is the happiest moment an individual
experiences with the real observance of the idea taking into effect. This
process gives the first evidence or symptom of success.
E. Verification: This stage is related to the development of knowledge into
workable state. The illumination is translated into practice or commercial
application which warrants an entrepreneurs to support for years.
Creativity Process

Idea Generation from Trend Analysis
Trend provides one of the greatest opportunities for
starting new venture and when the entrepreneur can be at
the start of a trend that lasts for a considerable period of
time.
Those entrepreneurs who are capable of understanding the
trend and start working on that may get success in their
venture.
Ideas can be explored analyzing different trends.

Types of Trends (seen in contemporary world)
1. Green trend (eco-friendly, green business orientation, recycling
etc.)
2. Clean energy trend (coal being the power of 19 century, oil in
the 20th century and likewise, many experts have predicted that
21 century will come from solar, wind, geothermal sources)
3. Organic orientation trend (particularly in food sector)
4. Economic and social trend (virtual meeting, virtual trading,
using social sites for business purposes, outsourcing etc.)
5. Health trend (health maintenance and concerns about health
care provisions are one of the biggest trend today as the world
population ages. The provides many opportunities for
entrepreneurs- brain gym, providing customized health care
services etc.)
6. Web-trend (blogging, online video, mobile application etc.)

Common Sources of New Venture Ideas
1. Research and development (R&D)
2. Suppliers
3. Internet
4. Distribution channels
5. Governments
6. Newspapers and magazines
7. Trade fairs
8. Brainstorming

Methods of Generating Ideas and Solving Problems

1. Focus group
2. Brainstorming
3. Reverse brainstorming
4. Brain writing
5. Problem inventory analysis
6. Collective notebook method
7. Big dream approach
8. The Delphi technique
9. Gordon method

1. Focus group
 A focus group is the group of 6 to 12 persons. They represent
various socio-economic backgrounds. They are experts in the
concerned groups. The focus discussion is facilitates by a
moderator. The group members are asked about their perception,
attitude, belief towards a product, service, concept or idea. The
participants talk with other group member and come up with
their conclusion.
 In depth discussion

2. Brainstorming
 Brainstorming is a relaxed and informal approach to problem
solving and idea development. This helps people come out from
normal ways of thinking. Ideas are not criticized and rewarded.
Brainstorming session are more like fun than pressure. It lasts for
10 min. to 1 hour and the members are also not required to
prepare much.

3. Reverse Brainstorming
 It is similar to brainstorming, except the criticism is allowed. The
technique is based on finding fault by asking question.
How many ways can this idea fail?
4. Brain writing
 Brain writing is easy. Instead of asking the participants to shout out ideas,
they are told to pen down their ideas pertaining to a specific problem or
question on sheets of paper, for a small number of minutes. After that,
each participant can pass their ideas over to someone else. This someone
else reads the ideas on the paper and adds some new ones.

•
5. Problem inventory analysis
 Instead of generating new ideas, the customers are provided with list of
problems associated with existing products. They are asked to discussed
about the products that have similar problems. The technique is used to
develop new product idea through the analysis of the problems associated
with the existing products.
6. Collective notebook method
 Developing a new idea by group members regularly recording ideas
keeping a small notebook in pocket, preferably three times a day. At the
end of a week, a list of the best ideas is developed, along with any
suggestions.
7. Big dream approach
 Developing a new ideas by thinking without constraints

8. The Delphi technique
 It is a structured forecasting technique. It relies on a penal of experts.
The experts give their opinion in two or more round. The experts are
encouraged to revise their earlier opinion. It provides a heterogeneity mix of
knowledge and ideas which have better chances of success.
 Since multiple rounds of questions are asked and the panel is told what
the group thinks as a whole, the Delphi method seeks to reach the correct
response through consensus.

9. Gordon method
 Unlike other methods, this begins with group member not
knowing the exact nature of the problem. This ensures that the
solution is not clouded by preconceived ideas and behavioral pattern.
 The entrepreneurs start with mentioning only a general concept.

 Innovation is the key to the key to the economic performance of any company,
region of a country, or the country itself. As the technology changes, old
products decrease in sales and old industries decline.
 Innovations are the building blocks of the future of any economic unit.
Innovation

Types of Innovation
A. Breakthrough innovation: The fewest innovations are of the breakthrough
types. These extremely unique innovations often establish the platform on
which future innovations in an area are developed. The steam engine, the
computer, the airplane etc.
B. Technological innovation: Occurs more frequently than breakthrough
innovation. This is usually (but not always) the introduction of a technology
that creates a new industry and transforms the way we live and work. The
jet airplane, personal computer etc.
C. Incremental innovation: This consists of small, yet meaningful
improvements in your products, services, and other ways in which you do
business. These tend to be the "new and improved" innovations we are all
bombarded with every day: new flavors, shifts to better or all-natural
ingredients, packaging improvements, faster/slower functioning etc.

Meaning of New Product or Service
Any product or service comes first in market is called new product. To be
a new product, it should be perceived as new by the consumers. Since all
kind of product found in market cannot survive for ever, new products
appear. As technology, intense competition in market, customer’s needs
and wants keep on changing; new product should be developed to cope
with these changes.
New products include original products, improved products, modified
products and new brands that the firm develops through its own research
and development efforts. Prof. Philip Kotler

Classification of New Product
A. From the consumer’s viewpoint (According to Thomas Robertson)
I. Discontinuous innovation: Involves the establishment of new
consumption pattern and the creation of previously unknown product.
Internet is one example of a discontinuous innovation that has radically
altered our society’s lifestyle.
II. Dynamically continuous innovation: Some disrupting influence on
established consumption patterns.
III. Continuous innovation: Least disrupting influence on established
consumption pattern.

Classification of New Product
B. From the firm’s viewpoint:
I. Technology newness
II. Market newness
The situation in which there is new technology and a new market
is the most complex and difficult- and it has the highest degree of
risk. The firm will need a new and carefully planned marketing
strategy.
On the other hand, extension, product improvement, market
development strategies that range in difficulty depending on
whether the firm has had prior experience with similar product or
with the similar target market.

Entrepreneurial Innovation
Joseph Schumpeter identifies five types of entrepreneurial innovation:
1. Product: The introduction of a new product – that is one with which
consumers are not yet familiar – or of a new quality of a good.
2. Process: The introduction of a new method of production, that is one
not yet tested by experience in the branch of manufacture concerned.
3. Business model: The opening of a new market, that is a market into
which the particular branch of manufacture of the country has not
previously entered, whether or not this market existed before.
4. Source of supply: The conquest of a new source of supply of raw
materials, again irrespective of whether this source already exists or it
has first to be created.
5. New organization: The carrying out of the new organization of any
industry, like the creation of a monopoly position or the breaking up of
a monopoly position.

Opportunity Recognition
Opportunity defined:

An opportunity has four essential qualities
• .

Model of Opportunity Recognition Process

Product Planning and Development Process
 Once idea emerges from idea sources or creative problem
solving, they need further development and refinement in to
final product or service to be offered. This refining process- the
product planning and development process -is divided in to five
major stages.
Idea stage,
Concept stage,
Product development stage,
Test marketing stage and
Commercializing
 It results in the product life cycle

Establishing evaluation criteria. At each stage of product planning
and development process, criteria for evaluation need to be established.These
criteria should be broad, yet quantitative enough to screen the product
carefully in the particular stage of development. Criteria should be developed
to evaluate the new product in terms of
Market opportunity (adequate market demand)
Competition
Financial factors and production factors.
Current competing producers, prices, and policies
New product’s compatibility with existing management capabilities

A. Idea Stage (rough mental picture that something company wants to do)
 Promising new product ideas should be identified and impractical ones
eliminated in the idea stage. Ideas can be evaluated on the basis of
Systematic market evaluation adopting checklist
method(questionnaire)
Each new product idea is expressed in terms of its chief values,
merits, and benefits.
Need determination should focus on the type of need, the users
involved, the importance of marketing variables
Financial scheduling (cash inflow, cash outflow, return on
investment etc.

B. Concept stage (fine-tuning of rough idea into a solid picture)
 In the concept stage the refined idea is tested to determine consumer
acceptance before manufacturing it. The conversational interview with
target respondents should be conducted. Questionnaire may be:
How does the new concept compare with competitive
products/services in terms of quality and reliability ?
Is the concept superior or deficient compared with products/services
currently available in the market ?
Is this a good market opportunity for a firm ?

C. Product development stage (pilot production/few sample test)
 In this stage, consumer reaction is determined, often through a consumer
panel.
The panel can be given samples of the product and competitors‘
products to determine consumer preference.
Participants keep the record of their use of product and comment on its
virtues and deficiencies.
The panel of consumers is also given a sample of product and one or
more competitive product simultaneously.
Brand comparison, likelihood of repeat purchase, consumes’ preference
to a new product etc. can be used to determine consumer’s preference.

D. Test marketing stage (Product is tested in small market segment)
 Although the results of product development stage provide the basis of the final
marketing plan, the market test can be done to increase the certainty of
successful commercialization. The last step in the evaluation process, the test
marketing stage, provides actual sales results which indicate the acceptance
level.
 Thus, company’s new product is tested in a small market segment before its
commercialization.

 E-commerce is simply the business process carried out with the use of
information and technology or internet.
The Internet is especially important for small and medium-sized companies as
it lets them minimize marketing costs while reaching broader markets. An
entrepreneur starting an Internet commerce venture needs to address many of
the same strategic and tactical questions.
It includes
1. Business to business(B2B)
2. Business to consumer(B2C)
3. Consumer to Business (C2B)
4. Consumer to Consumer(C2C)
E-commerce and Business Start-up

E-commerce and Business Start-up
 Benefits of E-commerce
1. Big market (growing stage in underdeveloped and developing countries)
2. Quick feedback
3. Reduce paper work
4. Cost effective (storing, investing in infrastructures etc.)
 Challenges of E-commerce
1. Security(due to website hacking, fraud etc.)
2. Order processing (it should be error free)
3. Problem in purchase decision( there is not feasible presence)

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