Got A Lemon?
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, thesename-brand products were shelved for good.
If a huge company with a famous name behind it can't launcha successfulproduct, what does this mean for you, the independentwho doesn't have millionsto back your product? According toRobert M. McMath, author of What WereThey Thinking? MarketingLessons I've Learned From Over 80,000 New-ProductInnovationsand Idiocies (Times Books, $23, 800-733-3000), anyonelaunchinga successful product should have an original idea, beprepared to do a lot ofresearch and be ready for a bigstruggle.
As founder of the New Products Showcase and Learning Center inIthaca, NewYork, a product-consulting firm that's amassed anextensive 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-productentrepreneurs 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 themain reason so many products fail."During the mid-'80s, asmall company introduced California Coolers to themarket. Soon,McMath recalls, there were more than 150 companies marketingwinecoolers. How many do you think were stocked on supermarketshelves? You can betit wasn't 150. Find out what people wantinstead 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'shappened in the past," says McMath. "We'reseeingpeople launch products that were done 10 years ago with no ideathatanybody had ever done it." If you research your productcategory, you may findyour "unique" product is alreadyout there or maybe did poorly in a previousincarnation.
3. What do you mean, margins? McMath recalls anentrepreneur looking foradvice on selling his sports-equipmentinvention. 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 asportinggoods store, they'll expect [about] 50 percent of the$15. [To profit,] you'dhave to charge $30 or $35. Will yourproduct support that price?" Theentrepreneur didn't knowbecause he'd never researched the product's viabilityin thesporting goods market. "You should be asking what [customers]expect topay for it, where they expect to buy it, and what themargins will be," hesays.
4. Trademark? What's a trademark? At a trade show,McMath told anexhibitor she was advertising with anothercompany's trademarked slogan. Yep,you guessed her reply:What's a trademark? Apply for a trademark andpatentbefore you start marketing. McMath advises hiring thebest attorneys toensure you get a strong patent that will hold upin court if ever challenged.
5. Sure, I'll send you a sample right away. McMathestimates 95 percentof the companies he requests samples from neversend them, missing out on thefree publicity he offers by usingproduct samples in his articles, speeches andshowcase. Follow up onyour leads, and make sure your marketing materialsinclude all thepertinent contact information so you can be found if you doforgetto send the sample.
6. No, I've never sold one, but it's a fabulousproduct. Prove yourselfbefore you try to meet with largedistributors or buyers. Sell your products inlocal stores, set up aWeb site, create a catalog. Use these sales to provethere'sinterest in your product. (Who knows? You may even make enoughprofiton your own to ditch the whole distributor/major-store routealtogether.)
