a. Application and use
Ideas should be examined for their real life use and application. If it already exists in the market, we will have to find out its present use, and then we may think of modifying it for better use. In the above mentioned example, we can clearly see that even though there are many companies manufacturing pen drives, the latest will be in consonance with the upcoming trends.
b. Level of operation
This is a crucial test for product/service identification. Depending on the use of the product/service the entrepreneur will produce it in a cottage industry or a small scale–industry or a large–scale industry.
Any product or service will face market competition at some stage. So market competition should be assessed through a study of the trends in demand and supply.