Product/Service Feasibility Analysis

Product/Service Feasibility Analysis
                    Product/service feasibility analysis is an assessment of the overall appeal of the product or service being proposed. Although there are many important things to consider when launching a new venture, nothing else matters if the product or service itself doesn’t sell. There are two components to product/service feasibility analysis: product/service desirability and product/service demand.
Product/Service Desirability
                    The first component of product/service feasibility is to affirm that the proposed product or service is desirable and serves a need in the marketplace. You should ask the following questions to determine the basic appeal of the product or service:
Does it make sense? Is it reasonable? Is it something consumers will get excited about?
Does it take advantage of an environmental trend, solve a problem, or fill a gap in the marketplace?
Is this a good time to introduce the product or service to the market?
Are there any fatal flaws in the product or service’s basic design or concept?
                    The proper mind-set at the feasibility analysis stage is to get a general sense of the answers to these and similar questions, rather than to try to reach final conclusions. One way to achieve this objective is to administer a concept test.
Concept
                    Test A concept test involves showing a preliminary description of a product or service idea, called a concept statement, to industry experts and prospective customers to solicit their feedback. It is a one-page document that normally includes the following:
A description of the product or service. This section details the features of the product or service; many include a sketch of it as well.
The intended target market. This section lists the consumers or businesses who are expected to buy the product or service.
The benefits of the product or service. This section describes the benefits of the product or service and includes an account of how the product or service adds value and/or solves a problem.
A description of how the product or service will be positioned relative to competitors. A company’s position describes how its product or service is situated relative to its rivals.
A brief description of the company’s management team.
                    After the concept statement is developed, it should be shown to at least 10 people who are familiar with the industry that the firm plans to enter and who can provide informed feedback. The temptation to show it to family members and friends should be avoided because these people are predisposed to give positive feedback. Instead, it should be distributed to people who will provide candid and informed feedback and advice. A short survey should be attached to the statement. The items that should be placed in the survey are shown in Table 3.2. The information gleaned from the survey should be tabulated and carefully read. If time permits, the statement can be used in an iterative manner to strengthen the product or service idea. For example, you might show the statement to a group of prospective customers, receive their feedback, tweak the idea, show it to a second group of prospective customers, tweak the idea some more, and so on.