Testing The Waters
This story appears in the February 1998 issue of Startups. Subscribe »
I am convinced that more than 90 percent of all Americans have at least one idea for a new product. Two of the major reasons you don't pursue your ideas are: 1. You don't think the market will accept a new product; and 2. You don't know how to find out if your idea has merit. But every market has room for innovative new products. More good news: There are ways to research your ideas without spending a lot of money.
Bob Black of Jacksonville, Florida, is one example of an inventor who used inexpensive research tactics to do what most people consider impossible: He introduced a product that competes with Procter & Gamble, Clorox and other major consumer products companies. Black's product, the Clean Shower, is a spray mist that when used daily after showering eliminates the need to clean your shower.
Clean Shower, which retails for about $2.49 for a 32-ounce bottle, was introduced in 1995 and can now be found in more than 25,000 grocery, drug and mass-merchandising stores, with monthly sales of more than $2 million.
Black took three inexpensive research steps before he decided to launch his product:
1. He learned all he could about potential competitors
2. He gave potential consumers a choice
3. He verified that customers were willing to buy his product.
Don Debelak, author of Bringing Your Product to Market (John Wiley & Sons, $19.95, 800-225-5945), is a marketing consultant specializing in bringing new products to market.
Know the Competition
Black started work on a new shower cleaner when his wife asked for help eliminating mildew in their shower. Black tried many products, but nothing he used--no matter how hard he scrubbed--eliminated the mildew. Then he separated the products into four categories--bleaches, solvents, acids and pesticides--and learned how they worked and how effective they were. Black started developing his new product only after he was convinced there wasn't any product on the market that met his need: a work-free shower cleaner.
Just because you can't find competitive products on supermarket shelves doesn't mean they don't exist. You may need to scan trade magazines, attend trade shows, talk to potential distributors, or acquire industry buyers' directories from trade magazines to find potential competitors.
Once you learn the names of potential competitors, check out each product. After all, your product is innovative only if it's different and significantly better than existing products. If they're too expensive for you to buy, attend trade shows where they'll be displayed.
Give People a Choice
Consumers have many choices when they buy a product, including buying a competitive product, buying another type of product or buying nothing at all. You need to be confident people will select your product from all these possibilities before you decide your product is a winner.
In the case of Clean Shower, Black gave product samples to friends, relatives and acquaintances and waited to see if they would ask for more. People had to come back and insist on getting another bottle of Clean Shower before Black could feel confident his product would sell.
If your product can be made only after a large investment and providing samples is impractical, you can still offer people a choice by showing potential users a series of products already on the market--along with your prototype--and asking them to rank the products by how likely they are to buy them.
One product I evaluated this way was the Dish-Net, a net that could be used in dishwashers to keep plastic cups, bottles and caps from overturning or falling into the dishwasher's heater core. I called a local women's group and invited them to participate in a market research group for the new product. The group was happy to participate at their next meeting, which was attended by about 40 women.
Because the product had only one indirect competitor, a dishwasher basket for small items, I displayed them both, along with four household products that were about the same price: a milk-bottle spout, a microwave bacon tray, a set of plastic storage containers and a lint-removing brush.
I asked the people to rank the products by how likely they were to buy them. I'd consider marketing the product if 20 percent of the participants ranked the product as a first or second choice. That may seem like a low percentage, but 20 percent of the people ranking a product first or second is a very strong showing if all the products are already on the market. In the case of the Dish-Net, 30 percent rated it as the first or second product they'd most likely buy.
Will They Buy It?
The ultimate test of whether or not a product is worth launching is to find out whether people will buy it. Black made Clean Shower in his garage and gave away samples for a year and a half before he was ready to introduce it to the market. At that point, he didn't have to worry if it was wise to invest a lot of money in advertising and inventory; he knew his product worked and that people would keep buying it.
Black's Clean Shower is a mixture of water and chemicals that can easily be made in small quantities. You may have a tougher time making small quantities of your product at a low cost, but there are several tactics you can use to get orders without having any product inventory:
1. Use a prototype to obtain orders. A prototype is a model that's very similar to your finished product. You can make a sales flier about the prototype and approach catalogs, retailers, manufacturers' representatives and distributors seeking orders. You can also show a prototype at a trade show--or even a flea market--and take orders for future delivery.
2. Run ads, deliver product fliers door-to-door or send out a direct mailing and see how many orders you receive. You don't need to have inventory to advertise a product for sale; all you need to do is offer customers an option to cancel the order if you can't deliver within 30 days.
3. Produce and sell a small quantity of products made with low-volume production techniques. For example, instead of buying a mold for a plastic part, you might make the part by bending and machining a flat piece of plastic. Don't worry about losing a small amount of money during market research. Consider it an investment that will tell you if your product will really sell.
Thousands of new products are introduced every year. There isn't room in the market for every product, even if they're all terrific. Take the time to do your market research. It's worth the cost, because it's the only way to know if your product will succeed.
Toy Meets World
Question: I want to test-market my new educational toy in a toy store near my house, but the store won't carry it. Do you have any suggestions on how to encourage the store to try my product?
Answer: Retailers frequently resist taking on new, unproven products. They like to wait until they're sure the product will sell. Three tactics you can try are guaranteed sales, consignment sales and small promotional campaigns.
Guaranteed sales means if your product doesn't sell, you'll take it back and issue a full credit or refund. A consignment sale is when you place a product in the store and bill the store only for actual sales. This tactic eliminates risk for the retailer, as it only pays the inventor after the product is sold.
My choice in your situation would be to run a small promotional campaign. Tell the retailer you will pass out 500 to 1,000 fliers about your product to schools, early-childhood-education programs and day-care centers in your area. Explain that you'll include a 10-percent-off coupon valid only at the retailer's store; all he or she has to do is stock the product.
The retailer might still insist on incentives such as consignment or guaranteed sales before you can close the sale. Meet those demands; you need to get your product on the shelf where people can buy it.
Contact Source
Bob Black, c/o Automation Inc., 11232 St. John's Industrial Pkwy., #1, Jacksonville, FL 32246, http://www.cleanshower.com
