This is one of the key activities for most companies, whether to keep the current business up to date with changing market conditions or to find opportunities in markets which are new for the company concerned. There must be very few companies in the world that have a policy whereby they do not carry out much new product development; after all who wants to work for a company with a policy not to innovate in the core business and not to develop otherwise? Ferrero with its new international confectionery products, Procter & Gamble with its developments in disposable diapers, in soft cookies, in toiletries, in detergents, Amstrad with its development in home computers are just some of the companies that have shown what can be done; small companies, moving fast and flexibly against giants, can succeed just as much as the large ones.
Market researchers have long been arrogant enough to believe that market research can find ideas for new products and market segmentation techniques have often been advocated for this purpose. Yet research has proved not cost effective in the initial new product search for the following reasons: 1) consumers are not bristling with needs and do not know what they like till they see it; 2) segmentation techniques have been expensive and difficult to interpret; 3) the results have usually been obvious or not actionable. Criticism of research in idea generation does not remove its need for validation. Following identification of the market opportunity, search for a concept and development of shortlisted concepts, research is most useful in testing the developed concepts which should ideally include a representation of the product and the packaging. If the approach outlined is accepted, there is clearly need for much reorganisation both among clients and among market research organisations. Market research should be more closely integrated into the marketing and financial process of new product development and should be assessed entirely on its cost effectiveness.