Stage 2- Idea Screening

The New Product Development Process

Stage 2- Idea Screening

The New-Product Development Process (NDP) is outlined above by Kotler & Keller (2012).

Idea Screening is the stage that comes after the Idea Generation process. “Idea screening is a process, formal or informal, through which you evaluate a product or service idea to determine if it’s worth the time and money to develop further”. (Hooker & Monas 2008, p.189).

Lots of ideas are generated in the idea generation process so the idea screening process is required to filter those ideas and the ideas that pass through the filter are the ideas which are relevant and most likely to succeed. This process saves a lot of time by not going into the development of every single idea but only the relevant ideas.

“The initial screening of a new product idea is critically important. Risky projects (i.e., those with high probabilities of failure) need to be eliminated early before significant investments are made and opportunity costs incurred.” (Calantone, Benedetto & Schmidt 1999, p.65).

Examples of Idea Screening

Ideas can be screened by using various tools. Heinz have worked with In Sites Consulting to develop their own Idea Screening Tool (See Appendix A). This tool “incorporates contemporary marketing thinking in the KPI selection and utilizes Innovation Power and Purchase Power as tools to predict the potential of new ideas across categories, countries and projects. The Innovation Power as a composite score, integrating all KPIs, allows having a single score to evaluate an idea on” (Goderis 2014). 

By using this tool Heinz have been able to screen all ideas and they know which the good ideas are after using this tool as the score will indicate the likelihood of the idea being successful.

Sports organizations such as Nike and Adidas could use a Radar tool (See Appendix B) to screen their ideas. For example Nike or Adidas could use this tool to determine which sort of material would be more suitable to create a waterproof running trainer. They would list types of fabric along the outside of the graph and then score them out of 10 using cost, practicality, comfort, risk of breaking and weight as decision factors.

Decision Matrix

A decision matrix “helps to evaluate competing solutions against a weighted set of customer-oriented criteria, ensuring the most important factors carry additional weight in the final decision, reducing the probability of biasness during screening” (Velaction, 2012).

Benefits of using a Decision Matrix include;

·         Customer Focused; concepts are evaluated against customer-oriented criteria.

·         Reduced development time; using a structured approach develops a common vision and language for the design team.

·         Better group decision making; the decision is more likely to be based on objective criteria.

·         Documentation of the decision process; the method provides its own documentation.

Below is a decision matrix I created. I came up with some decision factors which I could rank and rate each idea against. (See Appendix C for Explanation of Decision Matrix Ratings). The idea with the highest score was Quick Baseball, I am going to develop this idea. 

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References

Calantone, R.J., Benedetto, A.D. & Schmidt, J.B. (1999) ‘Using the Analytic Hierarchy Process in New Product Screening’, Journal of Product Innovation Management, 16(1), pp. 65.

Goderis , T., 2014. Heinz Idea Screening. InSites Consulting. Available at: www.insites-consulting.com/cases/heinz-idea-screening/ (Accessed November 17, 2014).

Hooker, R. & Monas, S., (2008). Shoestring Venture: The Startup Bible, New York.

Launch Excel, (2014). Decision Matrix Download Page. (online) Available at: http://www.launchexcel.com/resources/decision-matrix/decision-matrix-download-page/ (Accessed 19 Nov. 2014).

Velaction (2012) Decision Matrix Template. (online) Available at: http://www.velaction.com/decision-matrix-template/ (Accessed on: 19 Nov.2014).

Appedix

Appendix A- Heinz Idea Screening Tool

Appendix B- Example of a Radar Diagram

Appendix C- Explanation of Decision Matrix Ratings

Using a decision matrix template on excel I came up with 7 different decision factors and ranked them 1-7. 1 being the most important decision factor and 7 being the least important. I then weighted the decision factors. The least important factor was weighted 1.0 and the most important factor was weighted 3.0. See below for rank and weight for each decision making factor.

Rank	Decision Factors	Weight
7	Risk of Injury- How high is the risk of injury?	1.0
6	Existing & Potential Competition- How much competition is there?	1.3
5	Size of Market- How big is the target market?	1.6
4	Cost- Upfront costs and ongoing costs.	1.9
3	Enjoyment- How much will the idea be enjoyed?	2.0
2	Practicality- How practical is the idea?	2.5
1	Profit Potential- How much profit is the idea likely to make?	3.0