Suppliers typically place a great deal of focus on maintaining their existing product ranges, especially when those products are successfully integrated into a market and have been well received by customers.
With margins getting tighter and the cost of investment and research and development (R&D) rising, the number of new product ideas generated and taken to market is often surprisingly low, leaving many supplier teams unfamiliar with the tips and steps involved in successfully identifying a new product opportunity.
We’ve worked closely with suppliers on many product launches and so here, based on years of experience helping our clients, we’re identified the key areas suppliers should focus on to quickly evaluate new product ideas.
Where to begin?
By engaging with your customers and understanding their wants and needs, you can easily establish what products they are missing, as well as what they are unsatisfied with. Ensure your customer-facing colleagues understand this and have some form of feedback loop so they can feed back customer comments to your product team.
Although many new ideas for products may be generated, it is important to have a simple, effective process by which to evaluate them so you can identify those that have a reasonable chance of success. Create a documented and widely understood strategy and you’ll have a ‘reference point’ through which to look at these new ideas and evaluate if they are aligned to your brand’s vision, mission and values.
Once you’ve identified a potential new product, consider how you may want to set about bringing these ideas to market, and always refer back to your business plan. Is manufacturing your core competency? Should you look to outsource manufacture, create a joint venture or perhaps even acquire the manufacturing skills you need? Your overall strategy, set out in your business plan, will help answer these questions.
Evaluate first
It’s paramount to understand the proposition and value matrix, identify your customers’ pain points and the value a new product idea would bring. Without fully understanding these, your likelihood of success will be much smaller.
Understanding the market size and likely demand at an early stage will help to establish exactly how strong an opportunity this product is. Every supplier has finite resources available, so it is important to focus on how they can be used to their best effect.
With all this information, you will be able to establish the buyer’s persona and begin to identify who your target customers are, their characteristics and attributes.
Then, by understanding the buyers’ journey, you can begin to formulate a successful marketing plan.
What’s your competitive landscape?
Understanding the competitive landscape, and in particular the barriers to entry faced by your existing products – and your competitors – will help your decision process.
In particular, the amount of differentiation between your new product idea and an existing incumbent will greatly influence how successful your product’s market penetration will be, and what reaction the incumbent may take.
How your product is positioned and what pricing strategy you choose to support that positioning will also be important.
Product trials and beyond
Developing a prototype and deciding what the testing objectives are (whether it’s functionality, usability or scalability) will help drive the success of the trial. Deciding on how to test (in-house user testing before test marketing is undertaken) will often address significant issues up front, allowing the full benefit of the prototype trial to be achieved.
Based on the results of the trial, including establishing that there is a strong product market fit (PMF) and the outcome of the ‘Go/No Go’ decision stage, you will need to create a marketing and sales plan specific to the product to give yourself the greatest chance of success.
Significant elements of work you will already have undertaken (the proposition, value matrix, buyers’ persona and buyers’ journey) can all be used within your marketing plan. By ensuring a collaborative approach with your sales team from the start, your sales plan, including the sales prospecting strategy, will already have been formed.
By looking at each of these areas, opportunities to evaluate new product ideas quickly and bring the best options to market will help you continue to grow your business.
If you would like to talk to us, informally and in confidence, to understand how we can help you and develop your business, please contact info@moorgatemanagement.com or call Chris Maityard on 07767 291379.