Marketing Strategies - How to Make Your Product a Success BEFORE You Launch

July 5, 2008

Marketing Strategies - How to Make Your Product a Success BEFORE You Launch

Ever wish you could test the waters for a new product or service before sinking a lot of time and energy into development? Well, here’s the good news: you can.

Once you have a clear idea in mind for the product or service you’d like to launch, you can conduct a do-it-yourself version of what Corporate America commonly calls a concept test. In this kind of research, you’ll get a clear idea of what your target market thinks of your idea - what they’re willing to pay for it - and most importantly, why.

The do-it-yourself Concept Test will take a little time, but will save you both time and money (and possibly even your business!) down the line.

Are you ready?

First of all, you’ll need to sit down and clearly delineate exactly what your product or service is, including what features and benefits it will offer and how much it will cost. Typically, you’ll write 2-3 paragraphs describing your idea, making sure to clearly explain the benefits to the consumer. This is your concept statement.

Now that you have your concept statement, you need to develop a survey to gauge the reaction of your target market. Your survey should consist of a brief introduction and your concept statement, followed by a handful of questions that are key in determining whether your product or service stands a chance. Those questions are:

- Purchase interest (How likely are you to buy this product, if it were available to you? A) Definitely will buy, B) Probably will, C) I might, D) Probably will not, E) Definitely will not buy.)
- Overall Likes and Dislikes (What do you particularly like about this concept? What don’t you like? What could be improved about this idea?)
- Value (How would you rate the value for the money for this product/service?)
- Uniqueness (How new and different is this concept?)

Make sure you include a range of possible responses, so it’s possible to develop a detailed picture of how your respondents feel.

Now you’ll need to find a group of people in your target market - if your product is a new all-natural diet soda, for example, your target market might be health-conscious women, ages 20-45. There are research companies that specialize in finding groups of people with just the characteristics you’re looking for, but if you’re on a budget, I suggest you talk with friends, family, and friends-of-friends, as well as those of your employees. Chances are you’ll find a significant number of people in your target market.

Another great DIY technique for getting your survey in front of your target market is working with someone who has a business that serves that market. Ask them if they will send your survey to their customer base, perhaps in exchange for something you might be able to offer in return.

If possible, offer some type of incentive or “thank you gift” for those willing to take the time to fill out your survey. An inexpensive way to do this might be to offer a drawing for an ipod Nano or another item with widespread appeal.

One thing to watch out for when approaching market research on a DIY basis is bias. Your friends, relatives, and friends-of-friends are the network most obviously available to you, but they’re also the people most likely to hesitate in being brutally honest. Let them know that the best thing they can do for you is to tell the truth, and find a way to return the survey anonymously, if possible.

Finally, a word about “sample sizes,” or the number of surveys you want to see returned. Large corporations will typically interview 150-300 people of a particular target group when they are evaluating a concept. Clearly, the more people you interview, the more reliable your results will be, but surveying people takes time. The trick is to get as many people as you can, but know that beyond 200 or so, you’re going to see diminishing returns.

Now that you’ve got this important feedback on your new product or service, it’s time to put that information to work.

When your surveys have been returned, decide what your minimum requirements will be in order for you to take the next step. Large corporations call this an “action standard.”

As a small business owner, your most logical action standard has to do with how many people are likely to buy your product.

The rule of thumb some professional marketing research firms use to gauge true demand is that 80% of the people who answered that they would “definitely purchase” your product actually will - while only 20% of those who answered they “probably will purchase” will do the same.

Using this rule of thumb, let’s say your data shows true demand of 20%. Now you have to take into account the role of advertising and exposure.

Let’s say there are 10 million potential customers in your market, but you’re advertising on a shoestring. With the budget you’ve got, how many people can you make aware of your product? Five percent? That means 50,000 people will become aware of your product. With 20% true demand, you might expect 10,000 buyers.

So - is 10,000 buyers enough to make your new product viable?

If not, it’s time to go back to the drawing board, using the feedback you received to strengthen your concept.

If so, it’s time to move confidently ahead - knowing the market is with you.

Michele DeKinder-Smith is the founder of Jane Out of the Box, an online resource dedicated to the woman’s entrepreneur community. Discover information, networking and marketing opportunities for women small business owners by joining Jane Out of the Box for free at http://www.JaneOutoftheBox.com

Tags : marketing strategies, small business marketing, marketing plans, women entrepreneur community, succe