10 Ideas To Think About When Creating New Products

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The buyers are back.

GDP growth is expected to be 3-4% in both Canada and the US.

Whether the stimulus packages had any effect, the recession has turned into a recovery. Profits are soaring and people are looking at a new normal.

Federal governments are now considering raising interest rates to avoid inflationary pressures.

Companies are preparing for greater growth again.

While customers may be eager to buy more products, many of them are looking for new products. A great growth strategy for 2010 is to invest in new product development.

There have been many new products already this calendar year, but there is room for many more.

Here are 10 things to think about in your new product development strategy this year:

1) Think demographics. In 2001, Gary Hamel suggested in Leading the Revolution that the Big Bertha golf club was a result of an aging population. As people aged, they needed a bigger sweet spot, and were attracted to a club that would enhance their chance of hitting the ball further. Viagra has also done well by appealing to the older demographics. This year, it was Apple’s turn to give an older generation its due by making the iPad, which is essentially an iPod for older people. No longer do you have to strain your eyes on a small screen. While the youth prefer to carry the slim iPod around, older generations are attracted to the big writing and the generous keyboard size. What could you do with your products so it would attract more generations of clients?

2) Think Global. GDP growth in the US last year was -2%. Meanwhile, other economies like India and China had growth rates of 7-9%. If your products are not ready to use in these markets, then consider having the information translated and the products upgraded so that your customer base can grow. What could you do for your products so that they would appeal to a broader global customer base?

3) Think Green. Since BP’s oil pipe burst in the Gulf of Mexico, much of the world has been exposed to oil flowing quickly and constantly into our ecosystem. With Al Gore’s big push a few years ago towards climate change, many communities and businesses are looking at greener solutions. What can you do to make your products have a smaller footprint on the environment?

4) Think Value. Consumers and businesses are buying, but they are always more cautious at the beginning of a recovery. They want a good return on investment. How can you change your products so that they represent a greater ROI for clients?

5) Think Quality. When computers first became available, quality was not an issue because the time being saved from the new technology easily eclipsed problems arising from low quality. Nowadays, consumer’s expectations are very high for quality in computers, and most other products. People often pay more for better quality, and the additional amount they’ll pay far outweighs the additional costs to engineer that quality. What can you do to become or remain the quality leader in your industry?

6) Think New Markets. You don’t necessarily have to go to China to find new markets. Some companies are the experts in helping dentists or accountants or financial service firms. With the birth of a new growth cycle, now may be the best time to consider ways to upgrade your product for other markets. For example, if your product helps financial service firms attract customers quicker, consider ways of adapting this to law firms or other professional service firms. How can you change your product so that new markets will be attracted to it?

7) Think Innovation. People’s appetite for the next big thing continues to grow. 3D movies burst on the scene with Avatar becoming the largest grossing movie of all time, despite the lack of a rich or original plot. Nintendo recently introduced 3D video games, and Sony is eager to get their 3D Playstation to market later this year. While these are innovations in the entertainment industry, new ideas are popping up all over the place. Deere is perfecting their automated tractors to run without human intervention. Debit cards are adding chips for additional security. When I interviewed Isadore Sharp of the Four Seasons Hotel Chain, he told me that visionary leaders need to see things that others don’t. What is the next big thing for your industry?

8) Think Different Sizes. I went into the store the other day, and Coke was advertising their latest product. The recipe hasn’t changed, but the size of the small bottle is 414 ml, and it retails for 99 cents here. A while ago, I was surprised to see 6-packs of small cans of soft drinks for almost the same price as 6-packs of the normal size. I was shocked when the grocery stores couldn’t keep them in stock because of their immediate popularity. Technology firms can offer different sizes of their products as well. Think iPad. Can you package your products in different sizes to attract more customers?

9) Think Customer Needs. If you haven’t been keeping track of what your customers are looking for, now is a great time to ask them. Everybody wants fr.ee internet at hotels, but only a few hotels are listening. How can you incorporate more customer needs to distinguish yourself in the marketplace?

10) Think small changes. Not all new products have to be revolutionary. A few extra options might be all that is needed to help you differentiate yourself from the competition.

New products continue to garner attention, both from customers and from the media. A great weapon to add to your arsenal of growth strategies this year is new products.

The introduction of new products can ignite growth in your business as customers take notice. The R&D, Sales, Marketing and Operations staff become excited about the new offerings. It can be a win-win-win situation for the customer, the company and the employees.

Service of the Month

SHM Consulting has worked with many world-class organizations (including Costco Wholesale, Cisco Systems, TD Ameritrade and the Montreal Canadiens) to help them accelerate growth. Our consulting and coaching services are outlined on the SHM website.

This month, we are pleased to announce that we are offering a special new product development service called "Getting New Products Right." Participants will work directly with me, James Allan, to come up with breakthrough ideas for developing new products, and getting those products to market. Because of the time-sensitive nature required for this coaching program, the number of participants allowed will be limited.

Email us for full details.

Feedback

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Where is my Walkman?

There is a distinct difference in conversational tones between children and their parents. Some of this exists because of the need for teenagers to get peer acceptance. If everyone else is saying the music is “sick,” they should probably join the foray into new meanings of old words, rather than continue with the Queen’s English.

Sometimes the difference in language is due to business products. When I was a teenager, there was a device which Sony created to allow the user to play music while walking down the street. It was called a Walkman, and people loved it. People used Walkmans on the bus, as they walked down the street, and as they jogged.

The Walkman was the standard for any portable device used to play music. There were lots of cheap ripoffs that did the same thing, but everyone wanted the Walkman. As times changed, Sony introduced the DiscMan, which would allow the user to play compact discs, rather than the original tapes.

So should I be surprised that my son, who is now 15, doesn’t own a Walkman? Instead, he, and all his friends, own an iPod. The iPod is essentially a Walkman with music stored on a hard drive, rather than on a tape, or on a CD.

This is not a story of generational differences, though, but of a large Japanese company, Sony, who once dominated the market in portable music players, and now is a non-issue.

Business historians have to wonder if Sony could have done more to secure its lead.

So how did Apple come in and steal the market for portable music devices?

1. Apple made it more user-friendly. Apple gives consumers the full package of buying and downloading the music, as well as playing the music. They made it so easy that even grandparents could figure it out. Sony stuck with their traditional model of selling the music player on its own, rather than giving consumers the whole package
2. Apple has played a major role in controlling the distribution of electronic music. Apple realized early on that all the music players needed to get the music from somewhere. With the success of the internet, they leveraged their software abilities and set up iTunes stores to allow users to buy music quickly and easily on their computer. Sony could have hooked up with another major player, like Microsoft, to offer a similar service, but didn’t.
3. Sony made the same mistake twice. Sony, who trumpeted the Betamax technology in the mid-70s until VHS stole the market for personal videos, again used its own technology for digital music, atrac3, while mp3 quickly took over as the industry standard.
4. Apple took its leadership position and built on it. Apple continued to innovate with new models. They increased the memory, and increased the processing power to allow users to get much more out of their portable music players than just music. They allowed third party developers to profit by giving them a distribution source (iTunes store), and software to build upon.

For the latter half of this decade, the iPod has held a market share of over 75% of all mp3 players. Meanwhile, in dollar terms, the iPod has held over 80% of the market. It has used good business principles to steal a market from the industry leading Sony Walkman, and continues to build on that leadership position.

Although my son and I have used different terms, he has as much trouble finding his iPod in the morning, as I used to have finding my Walkman when I was his age.

Visionary Leaders Create New Industries

When you see premium coffee shops on every major street corner, it's hard to think of a time when they weren't so prevalent. In 1975, Frank O'Dea took a lot of risk in trying to create a new premium coffee industry in Canada. He started a chain of Second Cup stores, and was able to create an internationally successful franchise, with stores in 13 countries.

In the mid-80s, he started his second successful industry, despite all the nay-sayers, with Pro-Shred, a paper shredding company.

He's now embarking on a new venture: creating the social housing industry in Brazil. You know what? If I were a betting man, I would say his chances are pretty darn good.

This guy knows what it takes to create a new industry, and he shares some advice at Fast Company magazine: http://bit.ly/dkCeVU

Meanwhile, you can listen to the full interview I conducted with him at: http://www.streethockeymillionaire.com/frankodea.htm.

Frank O'Dea Speaks With James Allan

On Thursday, I spoke with Frank O'Dea, founder of Second Cup and Pro-Shred. Both industries were essentially created from scratch. So Frank knows what it takes to create a new industry in a country, and is currently looking for investors to help him create a social housing industry in Brazil.

Frank follows a personal philosophy of Hope Vision Action. While these three things are not the only things required for business success, Frank argues they are essential ingredients of any business. Furthermore, Frank believes that hope can spread throughout an organization if the company's mission and vision statements are done properly.

The interview was recorded, and it will be released when the full blog is posted on Fast Company's Visionary Leader Series next week. Watch for what Frank has to say about innovation, leadership and the two mandatory ingredients to create a new industry.

Resort Marketing

Resort and luxury hotel owners may believe that if you build it, they will come. This is only true until the competition comes, markets their resorts aggressively, and steals your competitors.

I've added a video on youtube which shows the story of a man named Roger who fell into the trap. When the competition wore him down, he moved to a new location. The competition followed, and again Roger had to consider fight or flight.

Check out the video at: http://www.youtube.com/watch?v=9Gwht1jHT1o

Comments are appreciated.

Visionary Leaders Do Things Others Don't See

How are visionary leaders created? What does it take to succeed in the luxury hotel industry? What impact does the recession, technology and the "demise of luxury" have on luxury hotels?

To find out the answers to these questions, I interviewed the best possible source: Isidore Sharp, founder of the Four Seasons luxury hotel chain.

What he said about becoming successful is on the Fast Company website at: http://tinyurl.com/ylymvjm

The full interview was transcribed at:
http://www.streethockeymillionaire.com/IsidoreSharpInterview.pdf

Mr. Sharp is a fascinating man who got into the hotel business in 1961 at the age of 30. He came up with many innovations in both the hotel industry and the way management treats its staff. He outlined much of his journey in his book "Four Seasons". I figured after reading the book that many people would try to plan out a similar life. So I was more than a bit surprised when Mr. Sharp told me, "Don't try to plan your life."

Instead, he says look for opportunity, and follow the ones that you have a fanatical belief that will work out. "Follow your passion of the moment, and let your skills direct you."

He has a deep belief in people that most people are too cynical to follow. He instituted a "Golden Rule" to dissolve the command-and-control pyramid of the day, and to create an employment scenario where every employee has a deep-rooted respect for every other employee.

His hotels span the earth, and are found at every major tourist and business destination you could think of.

Meanwhile, his life has not been without hardship. His 16-year-old son was diagnosed with cancer, and then died within a year. Shortly after, a young man named Terry Fox was running across Canada to raise money for cancer research. Mr. Sharp was an avid supporter, and remains one to this day.

Truly Visionary Leaders Create More Visionary Leaders

Please check out my blog for Fast Company magazine at:

http://tinyurl.com/ylmo3lx