Is Your Product 'Da Bomb' or Just a Bomb?
Don't waste time developing a product no one wants. These five steps to testing the market will help you launch a winner.
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Enormous amounts of money are spent every year in markettesting. Many thousands of prospective customers are surveyedextensively to determine whether or not to bring a product tomarket. But in spite of the most extensive interviews and surveys,fully 80 percent of new products and services fail within the firstyear.
Your time and money are extremely valuable to you--you can'tafford to waste them by investing them in producing a product orservice that fails in the marketplace. The more you test yourproduct before you produce and sell it, the more likely you are toearn the sales and profits that you desire. Just remember, everydollar you spend in market testing will save you many dollars oflosses later on in the marketing process.
Here's how to begin:
- Develop a prototype, model or description of the product orservice that you can show to others. Most ideas for newproducts or services don't work the first time. With a model orprototype, you can photograph it or create a picture of some kindand demonstrate it to a prospective buyer. It also allows you totry it out for yourself to make sure it works. (Be sure to keepaccurate notes of your research; you may come up with an evenbetter idea later.)
- Determine the price that you can sell the product for in thecurrent marketplace. Get accurate prices and delivery datesfrom suppliers, especially if you're purchasing the product forresale. Determine all the costs involved in bringing the product orservice to market: the costs of offices, equipment, shipping, loss,breakage, insurance, transportation, salaries, etc. Include yourpersonal labor costs at your hourly rate as a cost of doingbusiness. Ask your friends and family if they'd buy thisproduct at the price you will have to charge.
- Go to a potential customer with your sample or prototype andask if he would buy it. Be sure to call on the individual whomakes buying decisions. Then ask him how much he'd pay for thisproduct. If people criticize your new product idea, ask them why.Ask how the product could be modified to make it moreattractive.
- Compare your product with other products on the market.Continually ask, "Why would someone switch and buy fromme?" Solicit the negative opinions of others. Don't fallin love with your idea--be an optimistic pessimist by looking forthe flaws in your marketing plan.
- Visit trade shows and exhibitions--they're a terrificplace to get immediate feedback on a new product. You can getinto a trade show by signing up as either a manufacturer orwholesale buyer. Once you're in, find out what else isavailable that's similar or that performs the same function asyour product. Other companies marketing similar products will havetheir products on display--take a good, hard look at what they haveto offer. Then talk to product buyers--sophisticated buyers at thetrade show can tell you immediately whether or not your productwill be successful.
The only real test of a product is a market test, where you takeyour new product or service to a customer who can buy it to see ifhe likes it. As soon as you know your cost and price, make a salescall on a potential buyer. (The ability to sell the product is moreimportant than any other skill--this will give you a chance tosharpen yours.) Listen carefully to the comments and objections ofthe buyer--their feedback is priceless.
Then once you've determined there's a large enoughmarket for your product--at the price you'll have to charge tomake a profit--immediately begin thinking of ways to improve boththe product and the marketing. Continually tweaking yourplans--instead of sticking only with your original ideas--will helpensure your product's success.
Brian Tracy is the "Success Secrets" coach atEntrepreneur.com and one of America's leading authorities on entrepreneurialdevelopment. He's produced more than 300 audio and videolearning programs that cover the entire spectrum of human andcorporate performance.