By Rhonda Campbell
You may be right to think that expanding your product line will attract new customers and increase your profits, perhaps even doubling them. After all, the more new products you offer consumers the more opportunities you have to keep your company name in front of the buying public. But first you must develop and market the right new products.
Researching the Market Before Launching New Products
The ride you are about to embark on may, at times, feel bumpy, especially if you develop new products during market or industry shifts. This is why you want to research the market and industry your new products will be marketed and sold in thoroughly. Market research alone can require days, perhaps weeks, of your time. To start, market research generally requires you to collect a range of information (i.e. product pricing trends, number of competitors, average units sold for similar products). You’ll use this information to perform data analysis on competitors and measure consumer appetite for the new products you want to introduce to the market. After all, you don’t want to spend money developing, paying for patents, licensing agreements and marketing new products that nobody wants.
Some market research data can be gathered by interviewing consumers, asking them to reveal the top 10 products they purchase weekly or monthly, changes they’d like to see regarding their favorite products and how much they’re willing to pay for items similar to the new products you’re considering developing. To gather market data, you could also send printed, email or telephone surveys to consumers, measuring their appetite for new products you’re thinking about developing.
When it comes to researching competitors, you can review quarterly and annual reports produced by companies that design and sell products similar to yours. You can also use online resources like Alexa, Hoovers and Compete. Additionally, you can find out facts about your competitors by accessing social media networks like LinkedIn, Twitter and Facebook. After all, and as noted in the May 11, 2011 “10 Tips on How to Research Your Competition” Inc. article, “given how companies are increasingly using social networking sites like Facebook, LinkedIn, and Twitter as marketing outlets these days, you might be able to pick up interesting facts about your competition.” You can also keep up with feedback, including review ratings, your competitors receive at websites like Yelp.
Market Research for New Products Requires Funding
It sounds easy enough, but research takes time which is a reason hiring an experienced market research specialist or an economist can save you weeks of work. Keep in mind that experienced market research specialists and economists may not charge low rates. However, these specialists are not only aware of market research resources you may not be familiar with, they also have contacts at colleges, universities, government agencies, financial regulatory agencies, etc. that you do not. In other words, the best market research specialists and economists are worth their price.
Another factor that makes researching the market a wise move is the fact that market research can let you know if there isn’t enough demand to support your new products. This alone can save you thousands, maybe even millions, of dollars. Of course, if you are planning to develop several new products, you will need to pay to have market research conducted on each product you’re thinking about releasing unless the new products are related (e.g. different computer models).
If you’re working to develop new products for an offline start-up, it’s also important that you research the consumer make-up of residents living near your business. It’s also important that you research products sold at brick and mortar companies located near yours, including how well these products are selling. This research can let you know if the area where you want to start selling new products in is depressed economically, causing residents to focus solely on purchasing basic household needs.
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Get Your Copy of Spiral at https://www.ebookit.com/books/0000000841/Spiral.html
http://www.entrepreneur.com/article/179084 (Entrepreneur: How to Market a New Product)
http://www.inc.com/guides/201105/10-tips-on-how-to-research-your-competition.html (Inc: 10 Tips on How to Research Your Competition)