The PDMA Handbook of New Product Development

13.3. Setting Up the Foundation: Who Are Your Customers? What Is Your Product?

It is hard to argue against the point that customer information is a critical input to a successful product development system. However, there must be some boundaries that limit which customers and products are considered. To increase the odds of new product success, the company typically must either have some existing relationship with a given set of customers or some expertise within a selected product area. Thinking broadly about current customers and products can provide useful boundaries for targeting market understanding.

13.3.1. Who Are Your Customers?

It seems simple enough to identify the customer. For many markets, the definition of a customer is the traditional "consumer" or "household" view, which characterizes an "end user" of a product or service. However, few situations are that simple, as Figure 13.2 shows. Consumer products are not usually sold directly by the manufacturer to the end users. Instead, channel partners such as retailers or distributors consolidate products and create a purchase environment. Manufacturers often struggle with designing value propositions that meet channel partner requirements, while concurrently focusing on meeting needs of the end users. For some, the retailer is the most important customer because consumers are loyal to the channel and will buy whichever brands they carry. For others, the retailer is simply a vehicle. The consumer's willingness to search ...