Market vs. product approach
There are two ways of approaching the development of new products. The market approach and the product approach.
In the market approach, you listen to the existing and future customers and users to find out how you can make your product appeal to them. Methods of choice in this approach are using focus groups, conducting interviews with people from the target market segment, looking at demographic stastics of what sells, and what does not. This is a somewhat passive approach that will only create products within the boundaries of what is seen before. You can argue if true innovation comes from the market approach.
Another way is the product approach. You focus is in the product itself and not on what people think of the product. It is more the product itself that dictates whether it appeals to the user or not than it is the user. When Apple released their new iPod Nano, the development wasn’t based on a market approach, but a product approach. Apple fixed something that was already doing great : The iPod Mini.
The market approach does not involve as much risk as the product approach. On the other hand, the potential return on investment (ROI) is much bigger with the product approach – as well as a negative ROI.
Sometimes it is better to just trust your own gut or seach for new product ideas in other places than with the customers – instead of listening to just what the customer wants.
You might discover something the customer didn’t know that he wanted.