1. Digital Video Recorders. These recorders allow consumers to fast-forward through advertisements.
2. Television by convenience. Internet television, PDA applications, and DVDs have all made it easier for consumers to watch what they want when they want.
3. Internet radio. Consumers can create their own music stations, making their tastes difficult to pinpoint.
4. Fee-based radio. Your customers may be listening to commercial-free radio, making it difficult to catch their attention.
5. Social networking. Face-to-face interaction is being replaced with online networking and messaging.
6. Real-time news updates. Your customers may find it more convenient to have headlines sent immediately to their cell phones than wait for tomorrow’s newspaper.
7. Blog posts. Some wonder why they would spend money on a magazine subscription when the same information is available on internet blogs.

Technological innovation has fragmented the media and has made it difficult to get the attention of target consumers. Product developers must learn to adapt in order to discover where those ideal customers are focusing their mindshare.

Three out of ten might not sound like much, but for the product developers behind those products, it is a crushing defeat. Understanding what “value” means to their target consumers might have saved their products.

Customers measure value based largely on two things: price and benefit.

PRICE is the amount a consumer is asked to spend on a company’s product. A product must live up to its price. To claim value at any price point, a company must make a customer find enough worth in its product.

BENEFIT is the “worth” that the consumer must associate with your product. Your customer must be able to justify paying a product’s asking price, and this justification is determined by the product’s perceived usefulness and benefit.

To create VALUE for your target customers, you must strike a balance between the price of your products and the benefits they will provide. Find this balance and avoid a product failure!

2. Confusion can cause ineffective results. If your employees are constantly switching their focus between tasks, details will get muddled and confusion will ensue.

3. You are not getting the most out of limited resources. Product development can suffer when resources are incorrectly allocated. Multitasking takes focus away from devoting the proper amount of time to each project.

4. Employees can become burned out. Filling every spare moment with a different task seems like the best project management strategy, but weary employees will become less productive than if they had time for mental breaks earlier in the process.

5. The team is no longer a team. Multitasking often turns into an individual’s game as each employee finds different pockets of time to devote to a product assignment. The “two heads are better than one” strategy for product development will cease to apply.

• Your customers are looking for the latest and greatest thing.

• Your product development could always be trying to catch up.

• Your products could enter the market too late, meaning your innovations have missed the boat before they even had a chance to take off.

The best way to maximize returns in a market that currently moves and changes at the speed of the internet is to enter the market early. Enhancing product development efficiency and getting your products in front of consumers before your competitors will gain your company a huge competitive advantage.

The key to increased profits and maximum returns is to set the market rather than chase it and watch it dwindle away. Adapting to fragmented segments and product digitization could make the difference between a large profit or a huge loss.

Gigerenzer’s findings were mainly focused on rational thinking in the field of medicine. However, his experiment results are widely applicable to many areas of business, including product development and innovative marketing strategies.

Gut reactions help on the development end:

• To conserve resources. If less time is spent on each problem, think of what can be accomplished.

• To utilize brainstorming sessions. Feeding off of the input of others can produce quick decisions of a higher quality.

Gut reactions help on the marketing end:

• To benefit from the impulsive nature of consumers. If their guts tell them they need it now, you and your company benefit.

• To catch the market while it’s hot. Get your product noticed before its primary marketing niche has the chance to dwindle.

Additional information from: http://en.wikipedia.org/wiki/Gerd_Gigerenzer

Many companies are learning to accept more insights from lower-level employees. The Top 3 Reasons these businesses are amassing all employee brainpower are:

1. Allowing for more than just the loudest voice to be heard.
By creating a system for “internal markets” or even games of betting anonymously on product development ideas, all individuals can give input without feeling silly or without being degraded for their opinions.

2. Acquiring knowledge from various areas of expertise.
Upper management can tend to be a small group of similarly minded people. By gathering input from all areas of the company, product development will benefit.

3. Giving employees a sense of belonging within the organization.
While you gain predictions on product pricing or sales figures, your employees are discovering that their input matters. Feeling involved will make your employees want to participate more in the future and will even instill in them company loyalty.

Source: Erick Schonfeld, “The Wisdom of the Corporate Crowd”, Business 2.0, September 2006, Pages 47–49

Your customers develop associations with your company and its products and services. Drastically trying to change those associations can alienate your target customers—the ones who helped to get your business where it is today.

• Use consumer data research to your advantage.

The Wal-Mart company has mastered the art of utilizing consumer data research to determine the shopping habits of its target consumers. Little information is more valuable than merely knowing where your target customers are shopping and what they are looking to purchase.

• Make your marketing techniques and product development sophisticated—but not too sophisticated.

Much like with your company image, you do not want to over-improve your marketing techniques and product development. Always strive to maintain a connection with your target consumers. By all means, improve upon your message and your product innovations. But always be mindful of who is listening to your message and purchasing your products.

Source: Suzanne Kapner, “Wal-Mart Enters the Ad Age”, Fortune, August 18, 2008, Page 30

The Top 5 ways indirect observation can benefit your company:

1. Tap into areas of your customers’ thoughts that are generally unobserved.
2. Make your customers feel that they are playing an integral part in your product development and innovation. A sense of involvement gives customers a feeling of belonging and loyalty.
3. Researchers gain insights with consumer data they might not have expected. More fodder is created for future observation projects.
4. Your company is better able to make its services and products run parallel with your target customers’ wants and needs.
5. Your customers are able to show you their emotional thoughts with product association. This is especially beneficial because typically target customers only reveal their analytical, rational thoughts. The “why” of their purchases is revealed, and thus the foundation of a competitive business advantage is gained.

Source:, “Technology, indirect observation yield insights”, Marketing News, May 15, 2007, Pages 25 and 27

However, it is also one of the most gratifying experiences life has to offer. Creating a new product from scratch means having to think through the technical processes of the product itself. It means understanding, in advance, what need the product fills. It means gathering the investment dollars required to bring it to market. And it means creating and sustaining a business in order to make the product successful in the marketplace. Failure at any one of these stages will doom the product.

That said, if your product makes it, you will change the ways lives are lived. And what could be better than that?

But the company can also make a claim that its longevity is no accident. The company today earns about two-thirds of its revenue from products that are less than five years old. And one of the biggest reasons why is that company is ‘fanatical’ about research and development. “Innovation is about more than invention,” the company’s CEO, Dieter Kurz said in the article. “It is about creating something useful that gives the company an advantage.”

The process that Carl Weiss goes through to ensure a stream of innovative products is as intense as the resources that go into it. Some 1,600 R&D employees bring hundreds of new ideas to its annual innovation conference; about 25-30 of those will be selected for a six-month review process. Those that make it this far then go to prototyping and further vetting. It’s a process that ensures the place of ongoing creativity within the company.