What sources play a role in determining the idea for the next great connector? Bill Garver of APEX looks at the information that helps determine gaps in the market.
One of the most difficult aspects of the new product development process is determining when a new product idea is marketable, if it would be profitable, and other intangibles that would warrant expenditures for its development and release to the market. Of utmost importance is that there is a void that must be filled – that there is a real need for the new connector.
Some of the more common input comes from:
- Individual customers
- In-house personnel such as the marketing and/or engineering team
- Independent market studies and reports
- Study and analysis of technological trends
- Standards committees
Typically, the input from these various sources indicates a need or a solution to a problem. The new product could range from a small modification to an existing connector or a revolutionary new device that is not similar to anything that has been produced previously. New products evolve out of a specific need: How widespread is the need? Will other people have the same requirement? Are they aware that they have the need now or will in the future? How large is the overall market for the product? What is the sensitivity to price? How elastic is the price? What is the projected life cycle of the new product?
These are all very difficult questions to answer and will, most likely, require a great deal of probing and investigation. Some considerations associated with each of the source inputs:
- Input from individual customers – Generally, input from individual customers would indicate a need from a limited number of sources. The decision-maker would determine if the need could have widespread appeal and if the overall market has the same need.
- In-house personnel – Staff members in these organizations are, or should be, continuously on the alert for new product opportunities. The input may come from a variety of sources, such as existing and potential new clients, trade magazines, outside market studies, and technological advances in related areas. For example, the introduction of the iPhone created a need for extremely small interconnection devices.
- Independent market studies and reports – Consulting firms may be engaged to conduct market studies to determine the size of the market for the new connector and the acceptable price range.
- Study and analysis of technological trends – There are independent firms that analyze and develop reports on emerging technological trends, initiated by individuals in the private sector or the federal government, to understand how technology will change over the longer term, perhaps 10 years out. The technological road maps often help to uncover new product needs in the long term. The information is updated every year or two.
- Standards committees – Participation in standards committees is extremely important to connector companies looking to identify new, emerging product requirements. Many new product needs have been identified by these committees, and the resultant products typically have large market potential. Companies may elect to be either active or passive participants. Active companies suggest new product solutions and develop new product concepts to be considered by the committee attendees. Passive participants do not try to drive the concepts, but attend in order to understand what direction the industry is taking and how the committee’s actions will affect their companies in the future.
Once the new product need is identified and quantified in terms of market potential and cycle life, a business plan should be developed to forecast sales, profits, marketing strategies, and manufacturing plans over the near-term planning cycle.
Bill Garver of APEX Electrical Interconnection Consultants has 47 years experience in the connector industry, primarily in the management and direction of new product development and operational division management. He held the titles of division manager and director of development engineering at AMP. Garver developed new products throughout the full product life cycle – concept through introduction – for numerous industries including consumer, commercial, computer, industrial, communications, and medical.