What are the major external sources of new product ideas? What type of information can be gathered from each of these sources? How do firms benefit from such information?

What will be an ideal response?

The major external sources of new product ideas include customers, suppliers, distributors, competitors, and research firms. These sources are close to the market and tend to reflect current tastes and preferences. Perhaps the most important sources of new product ideas are customers themselves. Companies observe customers, invite them to submit their ideas and suggestions, or even involve customers in the new product development process. Many companies are now developing crowdsourcing or open-innovation new product idea programs, which invite broad communities of people — customers, employees, independent scientists and researchers, and even the general public — into the new product innovation process. Distributors are also linked to the market and can pass along information about consumer problems and new product possibilities. Suppliers can tell a company about new concepts, techniques, and materials that can be used to develop new products. Consumers often create new products and services on their own. The company can analyze customer questions and complaints to find new products that better solve consumer problems. Or it can invite customers to share suggestions and ideas. Companies can also directly involve customers in the innovation process through customer co-creation. Other idea sources include trade magazines, shows, Web sites, and seminars; government agencies; advertising agencies; marketing research firms; university and commercial laboratories; and inventors. Companies can also watch competitors' ads to get clues about their new products. They buy competing new products, take them apart to see how they work, analyze their sales, and decide whether they should bring out a new product of their own. Companies can better match their product offerings to customer needs and wants when these sources are involved in the new product development process.