Even a Great Product May Not be Worthwhile to Produce. Why? Because There Simply May Not Be Enough Demand.
By James F. Riordan
In evaluating a product's technical viability, we determine whether the product will work, whether it can be made, and whether it could potentially be profitable. The marketing viability evaluation, on the other hand, focuses on the market and uses the results of our marketing research. The key to marketing viability is always demand. Will there be enough demand to make it worthwhile producing the product?
Generally, "market research" means the gathering of data, including:
1. The nature and condition of the market for the product.
2. The amount and intensity of competition in the marketplace.
3. The types and "mix" of marketing strategies, promotional strategies, and packaging, pricing and distribution strategies that should be used.
4. The types of problems and challenges that others have experienced in this market.
5. End users' reactions to the features, advantages, benefits, and problems associated with using the product.
Demand, and how long it will last, is very difficult to assess, since it requires insight into the behavioral patterns of the marketplace. There is always a certain amount of guesswork involved.
The most common mistake here is to overestimate the sales potential or misjudge market trends. Both mistakes can prove fatal. An objective marketing viability evaluation is critical to new product planning.
Insufficient sales may lead to substantial losses and product failure. Long, costly introduction periods can swiftly deplete working capital reserves and generate a financial crisis. Many potentially viable new products fail because of an inadequate market evaluation.
The Marketing Viability Evaluation includes information on:
* Potential Market* Potential Sales
* Trend of Demand
* Stability of Demand
* Product Life Cycle
* Product Line Potential
* Compatibility with Habits, Lifestyles, and Values
* Revulsion Factors
* End-user Learning Curve
* Training and Educational Requirements
* Need or Desire
* Visibility to Potential Market
* Promotional Opportunities
* Distribution Possibilities
* Service Requirements
* Returnability of the Product
* Shrinkage Factors
* Aesthetics of Product and Packaging
* Functional Features, Advantages, and Benefits
* Ergonomic Factors
* Durability of the Product
* Existing Competition
* New Competition
* Protection Opportunities
Most marketing experts agree that proper attention to the "Ps" in the early stages of product development will save you lots of grief in the latter stages. The "Ps" are: Product, Purpose, Projections, Planning, Place, Positioning, Price, Packaging and Promotion.
The above article was taken from James F. Riordan's classic book, HOW TO EVALUATE THE POTENTIAL FOR SUCCESS OF A NEW PRODUCT OR TECHNOLOGY. Riordan's highly-acclaimed, 36-point system is a valuable tool for inventors, product evaluators or anyone interested in the invention process. Each section is followed by a comprehensive questionnaire that can be used to evaluate your product.
The highly-recommended book can be ordered through the Dream Merchant, 2309 Torrance Blvd., Suite 104, Torrance, CA 90501. The phone number is (310) 328-1925.
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