THE KEY NEEDS METHOD

The Key Needs Method, developed by Nobuyoshi Umezawa, is a highly effective framework for generating successful new products in the Japanese market. With close to 50 documented success cases, it has demonstrated a strong track record in uncovering unmet customer needs and translating them into commercially viable innovations.

It uses a 2×2 matrix in which the vertical axis represents the strength of consumer desires, while the horizontal axis represents theirdissatisfactionwith existing products or services. It generates consumer insights by helping to identify two key factors:

 
Unmet needs – Problems with no existing solutions.

Strong desires – Products people are eager to buy.

And the sweet spot, for companies of potential solutions? The top-right corner—where strong needs meet a lack of satisfactory products, which in turn point to the most promising opportunities.

In this post, I aim to elucidate the unique mathematical approach of the Key Needs Method through qualitative research, illustrating its application in facilitating the introduction of new products to the market.

 Measuring need and dissatisfaction

The analysis of consumer needs revolves around three key questions.

1.     Strength of Wish (on a scale of 1–5)

• Respondents rate a proposed product from 1 to 5.
• 1 = I absolutely want it. 5 = I’m not interested.

2.     Taking Action to Solve (For those who answered 1 or 2 to Question 1)

This question is for individuals who have a strong desire (wish). It asks whether they have taken any actions to fulfill it, using a 3-point scale:

1.   I am taking concrete actions or steps to fulfill my wish.

2.   There are products or services available that could help fulfill my wish, but I am not using them.

3.   There are no products or services available that can fulfill my wish.

3.     Satisfaction (For those who answered 1 to Question 2)

• How satisfied are you with the current product?
• 5 = Highly satisfied. 1 = Totally dissatisfied.

A formula for opportunity

Once these insights have been gathered, the Key Needs Method then uses the following formula to map them onto the 2×2 matrix.

• Strong desires (%) = A ÷ Total respondents 

(A = Those who rated 1 or 2 in Question 1)

• Unmet needs (%) = (B + C) ÷ A
  (B = Those who said no product exists. C = Those unsatisfied with current products).

Opportunities scoring above 50% in both metrics land in the top-right corner, indicating high demand and, therefore, significant potential.

Rethinking dissatisfaction

What I find particularly interesting – and valuable – about the Key Needs Method is that it assesses the availability of existing products, while also measuring consumer dissatisfaction with them. To put it simply, the degree of dissatisfaction is the percentage of people who:

1. Have no product available to meet their needs

OR

1. Are using an existing product but are still unsatisfied.

So instead of just chasing ‘popular’ needs – trying to refine what everyone is already using – this method helps you discover the ‘pain points’ – the areas ripe for innovation. And this, for me, is an often all-too-overlooked, yet crucial indicator of opportunity.

Jobs to Be Done

It’s also an approach that aligns closely with the Jobs to Be Done (JTBD) theory. This is described in the book Competing Against Luck, which suggests that people often continue using less-than-optimal products because they have no better alternative. And a great example of this comes from McDonald’s famous milkshake study.

In this study, researchers looked at why commuters preferred milkshakes over other options like, banana, energy bar or dounts. They found that it met several needs. 
 

·       It wasn’t distracting—so ensured a safe drive.

·       It left no mess—unlike other, ‘crumblier’ or ‘stickier’ alternatives.

·       It was long-lasting—and therefore enjoyable throughout the commute.

·       It was filling— and kept hunger at bay until lunchtime.

So, while a banana could have been a viable alternative, it failed on several key criteria. It was distracting to eat while driving; left the commuter with a messy, sticky skin; and was consumed too quickly to last throughout the journey.

In short, the study proved a simple yet powerful truth: People don’t always want a ‘better’ version of a product. They want a product that solves all their needs.

Turning insights into innovation

So, what conclusions can we draw from all this?

I would say that by measuring both the strength of need and the degree of dissatisfaction of existing/current products, we gain a clear, data-driven method for prioritizing opportunities for innovation. It’s not just about finding out what people want; it’s about discovering where they’re most dissatisfied, and then offering them a product that will meet their needs. 

And this in turn will sharpen our innovation strategiesand help us create products that truly matter.