Bringing New Products to Market

 

The introduction of new products is both a gamble and a challenge even for the most successful companies. This statement is borne out in the facts that 86% of new product ideas never get to market and 50%-70% of those that do fail. The products fail in my opinion because the people and companies bringing them to market do not have a plan, a structured process, or an understanding of what they are getting into. Since there are no guarantees the twelve-step program laid out in article will assist in this process and help especially new companies, and entrepreneurs in improving the rate of success and entry into the marketplace. Even though my background is in the retail arena and though this steps here are aimed at consumer products they can be applied to most companies selling a product or service.

The steps are:

1)      Understand the overall U.S. marketplace.

Use this step to do high level research to see if your product already exists in the marketplace or as a patented product. You can accomplish this in various ways from doing keyword searches, going to the US Patent Office website (www.uspto.gov) and by shopping retailers. Do not leave out a marketplace because you think your product does not fit because you never know who might think it was a good idea. As an example of this I was recently shown a product sample that was developed for cats and the person who developed it only needed to go to the local pet store to find it. So remember you must do research before you spend time and money on a product idea.

             2) Understand your market segment.

Once you have the broad overview of the marketplace and the various retailers the next step is to identify the area of the retail store your product would be displayed and the methods in which it is displayed. Also in this process you will look for competitors and potential partners for your product. In many cases the product maybe salable but a retailer will not take it on because it is a ONE PRODUCT LINE. I even had that highlighted recently when a call for ideas was sent out by a university and appointments were going to made with a major retailer, however, there was a disclaimer saying if you only had a one product line DO NOT APPLY. Also I have worked with an inventor of a product who figured this out and came to the company I was working for at the time to be his partner, we accepted and the product had a home in Wal-Mart and Lowe’s.

  3) Identify the latest in design and color trends.

Almost all products sold at the retail level have a need to be in line with the latest looks in both fashion and color. Organizations such as Pantone can help in understanding what are and will be the latest trends. There are fashion websites as well to show you the latest trends in fashion and other industries for your product idea.

 

  4) Identifying the target consumer

Based upon your research completed in steps one and two you now you need to decide which consumer you will attempt to reach and thereby which type of retail outlet you will be selling. As part of this step you can develop packaging ideas and concepts that will work with the product and the store you are looking to sell into. You will also need to understand the retail price point that makes sense for your product based upon where it fits in the retail environment. I recently met a gentlemen who developed two board games that were somewhat unique and different and potentially salable. However he decided on price points for his product that were twice the “acceptable” pricing for similar products also the packaging he developed was not in line with the retail price he was looking for and therefore the products did not sell.

  5) Develop your marketing story.

The next step requires the development of the strategy that will be used to the sell the product, and the story behind your branding process. The product can be marketed as the lowest priced, best quality, most features, etc. You need to develop a brand strategy that sets you apart from the competitors and will make a compelling story to the retail buyer. Remember the only FOCUS GROUP you have to please is the retail buyers doing a lot of market research and spending a lot of money with individuals and groups will only go so far. You would be better served to find sales professionals who serve the marketplace you want to be in and get their opinions on the product. Remember these people have seen the good, the bad, and the ugly of products over the years and will give you an honest answer and help your story where they can.

6)      Tradeshows as a method of becoming known.

As a new entry into the marketplace a method of gaining exposure and building credibility for a new product or company is to participate in trade show either regionally or nationally. This is also a great place to develop a sales force. I recently worked a trade show for a company looking to go into the retail arena after years in a specialty market. Even though there were not a great many retailers present there were a great many manufacturers sales organizations and representatives present and they ended up with a national sales team that could take the product to various retail channels. They also gained a large number of international contacts for the product.

7)      Develop the specifications to having the product produced.

In order to have your product produced, and produced properly there must be complete specifications and drawings made available to potential vendors. This will include methods of packaging. Also when you get to this step you can decide to get the product patented and I would advise you find an excellent Patent Attorney to develop the patent. The process could be costly and unless at the end of the day you are willing to defend the patent rights you may want to consider moving ahead without a patent. You can as I understand take some initial steps to protect yourself through the Patent Office without a great deal of expense while you are proceeding with the sourcing process. Also insure that you have a NON-DISCLOSURE AGREEMENT developed to protect yourself. This agreement should be signed by anyone who you discuss the idea with who potentially could take the idea and bring it to market by themselves. People who are in the Capital markets most likely will not sign this agreement however they are not looking to take products and run with them either.

8)      Find the source for your product.

Sourcing of your product either internationally or domestically or both must be accomplished carefully, and with the understanding of what you are seeking as a final cost for the product. If your product is patented or not, have a non-disclosure form available for potential vendors to sign.

9)      Understand the importing and purchasing of products.

There are a number of issues and costs that come with the importation of products into the US. There are ocean freight costs, duties, customs brokers fee, domestic freight costs, and others that will add to the total cost. Payment terms and alternatives must be understood as well.

 

10)  Determine your method(s) of distribution and setting them up.

Once you have determined where you are going to purchase your product then you have to determine the method of distributing the product. Established companies will use their present methods, however, new companies should look at third party logistics providers as an alternative to doing it themselves.

11)  Required information to make a sale.

In order to sell product to retail there are certain basics that a company and the products must have. These basics include establishing a UPC (uniform product code) vendor number for the company and an individual UPC number for each product the company wishes to sell.

Other specific details pertaining to the product will be needed as well.

12)  Make the sales presentation and the sale.

Now that you have established your marketing and selling story with the benefits of your product over the competitors, the method of how to produce and package your product, and the resources to produce and ship your product to the customers and the selling prices for the product. Then you are ready to put these pieces together and make presentations to potential customers.

 

Bruce Rubin

BHR Global Associates

Email: bhrglobal@aol.com 

Phone: 267-664-5165