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Remedy #1 for product launches/start ups: "Get Real"

Written by: Neil Mahoney

Article Overview: Make sure there is a real & recognized need for your product. This requires thorough, unbiased market research that involves 8 basic steps, ranging from: A) "How important is your offering to prospects?" to H) "How can you best accumulate and interpret opinions?

Remedy #1 for product launches/start ups: "Get Real"

This article discusses the first remedy that assures a successful product launch -- "Make sure there's a real & recognized need for your idea."

Even this first step isn't simple -- in fact it requires 8 separate actions:

A. "Your new improvement, how important is it?" Is it disruptive technology, something that will obsolete everything out there? Or is is relatively minor? Or somewhere in between?

B. Is your product complex & expensive like a car? Or is it simple & inexpensive like a yoyo? Or is it somewhere in between?

C. "Your Company & its reputation" is a powerful factor in the sucess or failure of your product, however its not a guarantee. Remember the Edsel? Conversely, the Pet Rock was a big success -- it captured the public's fancy and sold millions. Does anyone remember who marketed the rock? If you bought one, did you care?

D. "Your prospects: who are they?" Are they well informed and particular who they buy from? Or like the Pet Rock, will they care? Or are they somewhere in between?

E. "Pricing -- what's it worth to the customer, how much can you charge?" This is one of the most-critical issues you face, and one that's critical to your company's profitability & perhaps survival. You must do extensive market research on just this issue alone. However, there are some general rules of thumb you can use:

* For package goods -- products that are blister packed or similarly packaged and hung on a Retailer's wall or rack -- the guideline is that manufacturing costs should not exceed 1/9 of selling price.

* For capital products used in industry, the rule of thumb is that design & manufacturing costs should not exceed 45% of selling price.

* For hand tools and the like, products are sold to retailers at a 30 - 50% discount. For the Big Boxes, it's a bit more.

* Manufacturer's Reps get a 12 - 20% discount on what they sell, depending on the type of product.

* Industrial Distributors usually get a 35% discount if they stock the product -- less if they don't.

F. "What type of market research should you use to learn the value of your product to the end-user?" Another complicated one that's too involved to get into. There are many types you can use, ranging from direct mail and the internet, to telephone or personal interviews, to focus groups, to beta testing -- or some or all of them.

G. "How do you prepare a questionnaire?" Another complicated one that's too involved to get into. You need to consult a pro because the way you frame the question can bias the results. Have you noticed the media like to ask: "How do you feel about. . ." This gets a totally different response than qustions that begin: "What do you think about. . ."

H. "How do you interpret the information you get from the research?" Here's one you can do yourself, BUT you should also get disinterested parties who you trust to give you their impressions.

Remember: The cardinal rule for all this is: "Take off those rose-colored glasses.

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Article Tags: blister, boxes, conversely, critical issues, disruptive technology, edsel, failure, hand tools, market research, nbsp, pet rock, product launch, profitability, prospects, remedy, reputation, rule of thumb, rules of thumb, simple amp, sucess



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