Introducing a new product or service without first testing themarket is like jumping off a cliff into the sea,blindfolded–unthinkable, life threatening, treacherous andunnecessarily risky. Many new ideas and products are successfulbecause their creators identified an unmet need in the market andverified the viability of that concept.
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.
Through correct and vigorous market research, you’ll uncover thefollowing vital information:
- Demand for a product or service in your market
- Sales figures within a market for a particular product orservice
- Who your customers are
- What those customers think about your product or service andwhat they think about your competitors’, so you can capitalize onyour strengths
- Where and how customers buy your product or service, so you canestablish the most effective distribution and marketingchannels
- How much customers are willing to pay, so you can figure out acompetitive price for them and realistic profits for you
- Who your direct and indirect competition is
- How to position your product or service so that you takeadvantage of its unique selling proposition
- Which governmental regulations your product or service will besubject to on a local, state, and federal level
- Which sales, advertising, display, and promotion method(s) aremost effective
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 this product atthe 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 from me?”Solicit the negative opinions of others. Don’t fall in love withyour idea–be an optimistic pessimist by looking for the flaws inyour marketing plan.
Visit trade shows and exhibitions–they’re a terrific placeto get immediate feedback on a new product. You can get into atrade show by signing up as either a manufacturer or wholesalebuyer. Once you’re in, find out what else is available that’ssimilar or that performs the same function as your product. Othercompanies marketing similar products will have their products ondisplay–take a good, hard look at what they have to offer. Thentalk to product buyers–sophisticated buyers at the trade show cantell you immediately whether or not your product will besuccessful.
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 enough market foryour product–at the price you’ll have to charge to make aprofit–immediately begin thinking of ways to improve both theproduct and the marketing. Continually tweaking your plans–insteadof sticking only with your original ideas–will help ensure yourproduct’s success.
