Got A Lemon?
Grow Your Business, Not Your Inbox
Preventing product flops.
Frito-Lay Lemonade. Noxema Solid Antiperspirant Deodorant. Ben-Gay Aspirin.Surprised you've never heard of these products? You shouldn't be--afterless-than-phenomenal sales, these name-brand products were shelved for good.
If a huge company with a famous name behind it can't launch a successfulproduct, what does this mean for you, the independent who doesn't have millionsto back your product? According to Robert M. McMath, author of What WereThey Thinking? Marketing Lessons I've Learned From Over 80,000 New-ProductInnovations and Idiocies (Times Books, $23, 800-733-3000), anyone launchinga successful product should have an original idea, be prepared to do a lot ofresearch and be ready for a big struggle.
As founder of the New Products Showcase and Learning Center in Ithaca, NewYork, a product-consulting firm that's amassed an extensive collection ofgrocery-store products spanning 30 years, McMath has witnessed the rise andfall of thousands of products. Here's his take on the most common mistakesnew-product entrepreneurs make--and how to avoid them:
1. Good product? I can do it better. No, you can't, cautions McMath."Too many ´me-too' products is the main reason so many products fail."During the mid-'80s, a small company introduced California Coolers to themarket. Soon, McMath recalls, there were more than 150 companies marketing winecoolers. How many do you think were stocked on supermarket shelves? You can betit wasn't 150. Find out what people want instead of what they already have. Getoff the "trendwagon" and create your own product frenzy.
2. No, really, we're the first. "[Entrepreneurs] aren't doing enoughresearch. They don't know what's happened in the past," says McMath. "We'reseeing people launch products that were done 10 years ago with no idea thatanybody had ever done it." If you research your product category, you may findyour "unique" product is already out there or maybe did poorly in a previousincarnation.
3. What do you mean, margins? McMath recalls an entrepreneur looking foradvice on selling his sports-equipment invention. McMath asked him what he wascharging for the product, and the young man said $15. How much did it cost tomake? $11. "I said, ´Don't you know anything about margins? In a sportinggoods store, they'll expect [about] 50 percent of the $15. [To profit,] you'dhave to charge $30 or $35. Will your product support that price?" Theentrepreneur didn't know because he'd never researched the product's viabilityin the sporting goods market. "You should be asking what [customers] expect topay for it, where they expect to buy it, and what the margins will be," hesays.
4. Trademark? What's a trademark? At a trade show, McMath told anexhibitor she was advertising with another company's trademarked slogan. Yep,you guessed her reply: What's a trademark? Apply for a trademark and patentbefore you start marketing. McMath advises hiring the best attorneys toensure you get a strong patent that will hold up in court if ever challenged.
5. Sure, I'll send you a sample right away. McMath estimates 95 percentof the companies he requests samples from never send them, missing out on thefree publicity he offers by using product samples in his articles, speeches andshowcase. Follow up on your leads, and make sure your marketing materialsinclude all the pertinent contact information so you can be found if you doforget to send the sample.
6. No, I've never sold one, but it's a fabulous product. Prove yourselfbefore you try to meet with large distributors or buyers. Sell your products inlocal stores, set up a Web site, create a catalog. Use these sales to provethere's interest in your product. (Who knows? You may even make enough profiton your own to ditch the whole distributor/major-store route altogether.)