Starting a new business to supply an innovative solution needs lots of research
By Ed Hatton
I have been developing a product for the health and beauty industry for the past 2 years. How do I sell and market my product both nationally and internationally?
Many wonderful inventions never see commercial reality, let alone international success so the questioner is wise to ask for advice on the way forward. If the market does not see the value of a new creative concept it will not sell. The inventor may get excited about something that solves one of her own problems, but before launching a start up business she needs to be sure that the market has the same need and sees the value of her product in addressing that need.
To do this the prospective entrepreneur must do some market research. In this case product prototypes were tested with a number of the prospective entrepreneur’s friends and family, and all of them liked the product and felt it addressed a need. This is a great start, but still only a start.
She now needs to flesh out her research before deciding how to market the product locally or internationally. She could expand her test sample group to others who are not friends or relatives, so that she gets an impartial view. She should also try to get more depth of information, rather than just whether the product is liked or not. How could it be improved? Where would they expect to buy it? What price would they pay? Would they like similar products?
The potential outlets which will sell the products must be reviewed. Where would the target consumer expect to buy the product? For instance if it is targeted primarily at beauty aspects then spas and salons could be the best outlets, but if health and fitness is the primary aim of the product then gyms and sports clubs may be appropriate. A product aimed at young professionals could sell well on-line. If retail stores are chosen the selection must be refined; should the retailers be pharmacies, health stores, boutiques, or supermarkets? She should talk to some proposed outlets to determine whether they would stock the product and their price and margin expectations. She must get estimates of the likely sales volumes in all channels.
Price is a key issue in product success or failure so she needs to test the price consumers will be prepared to pay. Working with her test group she should also consider questions like whether there should be a steady supply of consumables or refills, and whether packaging or bundling the product with similar products would make it more desirable. At some stage she is going to have to make a go-no go decision on launching this product, and when she does a very important criteria will be the sales income she expects to make. Since sales income is price multiplied by the number sold she will want to be reasonably sure of her projections in both areas. The right level of research about price and expected sales volume is critical.
No product will sell if potential customers do not know about it, so she needs to research how best to tell potential consumers about the product’s key benefits. Is it practical to advertise in newspapers and magazines? What about social media? Will publications run articles about her product? Should she do promotions at health markets, or put flyers in hairdressers’ salons? This is a difficult aspect of research, and she should try to get advice from experienced business people so that she can develop a marketing promotion plan.
Marketers will have recognised these as the ‘4Ps’ of marketing – product, price, place and promotion. There are also other aspects that need research: Are there competitors and if so how will she compete? Can imitators copy her product? Are there legal or environmental questions? Can the product be manufactured reliably and at the right cost? Has she chosen the right supplier?
None of this research needs to consume large amounts of time or money, and whatever she does spend now will be among the best investments she can make in her invention.
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