feasibility analysis feasibility analysis

CHAPTER 3 • FEASIBILITY ANALYSIS 75
Often, the most effective thing
an entrepreneur can do while
completing a product/service
feasibility analysis is hit the streets
and talk to potential customers.
Here, a young entrepreneur collects
feedback from a prospective
customer about a new product idea.
New product success or failure is largely decided in the first few plays of the game—
in those critical steps and tasks that precede the actual development of the product.
The upfront homework defines the product and builds the business case for
development. 8
Table 3.2 provides a summary of the benefits of conducting a detailed and thorough
product/service feasibility analysis. As shown in the table, the benefits and rewards of conducting
the analysis are well worth the effort. Two primary tests—concept testing and
usability testing—constitute product/service feasibility analysis.
Concept Testing. A concept test involves showing a preliminary description of the
product or service idea to prospective customers to gauge customer interest, desirability,
and purchase intent. 9 It was after the concept test that Retailing Insights abandoned
its plans to build the Videocart. There are three primary purposes for a concept test,
as shown in Figure 3.2. 10 The first purpose is to validate the underlying premise of
the product or service idea. This is done by showing the concept test to potential customers
and asking them to complete a short questionnaire. The questionnaire should
4. Identify three primary purposes
of concept testing.
TABLE 3.2 Benefits of Conducting a Product/Service Feasibility Analysis
Benefit
Getting the product right the first time
A beta (or early adopter) community
emerges
Avoiding any obvious flaws in product
or service design
Using time and capital more efficiently
Gaining insight into additional product
and service offerings
Explanation
You know what customers want because you asked them. You also tested a
product’s usability and the quality of the user’s experience.
The firms or individuals that participate in the feasibility analysis often become a
company’s first customers or “adopters.” These early customers provide additional
feedback as the product or service rolls out.
By asking prospective customers to test the usability of a product or the ease of use
of a service, obvious design flaws are usually uncovered.
Because you have a better idea of what customers want, you won’t spend as much
time or money chasing ideas that customers don’t want.
Often, conducting a feasibility analysis for one product or service prompts the
recognition of the need for additional products or services.