The Manager's View provides solutions and advice based on management and marketing principles that are used by GWR Research (www.gwrresearch.com). Many of the posts are related to or are taken from the author's books "The Manager's Guide to Building a Successful Business" and "Developing Successful Marketing Strategies". More information on the books is available at Amazon.com, BarnesandNoble.com or Businessexpertpress.com
Want To Find a New Product For A Business? Here's How.
Creating A New Business Idea
How do you identify market needs? How do people come up with
ideas that people don’t know they need until they see them?
The simple truth is the need is there and the job the new
product will perform is one that needs to be done and may be getting done but
not very efficiently.
So is there an exercise that can identify jobs that need to
be done more efficiently or begin being done?
Here is a process that works. Go through this example and see if it helps you develop a new product or business.
Let’s pick an
ordinary person that is going on a business trip. Here is a list of things
that will need to be done:
Prepare for meetings
Make reservations for hotels, cars, restaurants, air travel,
Travel to and from destination
Pack clothing etc. for trip
Now break down any
one of these categories to activities. Let’s pick Pack Clothing for trip:
Lay out clothes for each day/activity
Layout toiletries and personal items for each day
Fold clothes to fit suitcase
Pack suitcase with clothing and personal items.
Unpack at destination
Keep soiled clothing separate from clean clothing
Repack for return trip.
Unpack at home
Rehang fresh clothing
Launder soiled clothing
Now let’s pick an
activity that might lead to an innovative product.
Let’s pick “Fold clothes to fit Suitcase”
There are numerous devices that are designed to help keep
clothes neat in a suitcase. Mostly they don’t work. So let’s say we’ll create a
device that will allow someone to fit clothes in a suitcase and keep them neat
First we might
describe the worst outcomes of people trying to fit clothes into a suitcase;
Suitcase is flexible and therefore will not hold clothing’s
Clothing is not uniform and won’t fit evenly into a suitcase
Clothing get’s wrinkled and must be pressed
Device to keep clothes neat actually creates unwanted
creases or wrinkles
If suitcase is damaged or gets wet there is high probability
clothing will be affected
Now let’s create the
new product by addressing the possible bad outcomes.
We could create separate packaging to put clothing in before putting them in a
We could develop packaging that fits together in uniform fashion like building
blocks to keep clothes in place during travel. One type of container for shirts, one for slacks etc.
This packaging could allow clothing to be fitted on forms to hold
clothing’s shape and prevent wrinkles.
This packaging would be water tight and durable to protect clothing
even if suitcase is damaged.
This particular example was created in about 30 minutes. With a group it might take longer because there will be more innovative thinking and more solutions that are better.
This process can be used for any activity and it can be used for businesses in any industry.
When introducing a new product or service to the market a
key, and often critical, consideration is the price for this offering. I have
seen folks simply take the cost of production and use a percent mark up as a
pricing model. This is the simplest model and it provides a good example for
the need to consider other pricing model options.
Here are 10 things to consider before setting a price for
your product or service: ·Mark up
Based on Cost Vs Retail. In the opening paragraph I gave the example of a
model being used that marked up a product by a percent over the cost. The cost
used here is generally direct cost or labor and materials. If someone wants a
30% of the asking price to be the mark up, then using 30% of cost won’t provide the
desired outcome. Simply put, it is the wrong math. If something costs $1 to
make and it is marked up by 30% for a selling price of $1.30 then the profit of
based on the asking price is 23.07%. To arrive at a 30% mark up based on the
selling price it is…
THE IMPORTANCE OF PRODUCT PRICING By
Gary Randazzo The impact of pricing
strategies can be critical for the success of new product launches, a company’s
image and ultimately a company’s short and long-term success. REACTING TO THE COMPETITION I have worked in
several industries and found that pricing is often overlooked as a key
marketing tool. In many instances pricing is driven by the sales department and
is a reaction to the competition. This reaction assumes the competition knows
the market better and has a superior marketing strategy. When reacting to
the competition it is important to understand that you are being drawn into a
game whereby you play by the competitor’s rules. You are playing their game and
changing your strategy. Your hope here is that you can play the game better or
that the competitors can’t play their own game very well. I am reminded of
a time where my company was vying for the business of a key customer. The
customer was a shrewd negotiator. We understood the valu…
TO CLARIFY YOUR MARKETING STRATEGY, START CLASSIFYING YOUR CUSTOMERS
From Texas CEO Magazine, December 2012
By Gary Randazzo
Every business, at some point, will review its marketing strategy. The cause for a strategy review can come from a difficult business environment, a windfall in profits, a change in technology or a change in customer preferences. When a marketing strategy review is in order it can be challenging to decide where to start.
Classifying customers, based on the amount of their spending, can be a good place to begin. Spending used as a metric can help the analyst understand which customers provide the biggest impact:
1) Key customers representing the largest percentage of sales and profit
2) Customers with the potential to provide greater sales (under-potential)
3) Customers that do little or no business with the organization but use products similar to those offered by the organization (nonusers)
This simple classification may…