For those of you that are looking for a simple process for launching a new product or entering a new market, I have developed a checklist below that can be used for either.
1. State your company mission – This is why the business exists or will exist. Coca Cola is a good example, their mission talks about refreshing the world, creating value and inspiring happiness and optimism. Note there is nothing said about selling Coke.
2. State your company vision – This is how the company will create value for the company, the customer and collaborators. Again, Coca Cola is a good example. The coke vision talks about being a great place to work, building a portfolio of quality beverage brands, nurturing a winning network of customers and suppliers, being a responsible citizen, being a profitable company and being a lean, effective and fast moving company.
3. Does the new product or new market fit with the mission and vision? – Clearly introducing products other than beverages would not fit with the vision and would have to be scrutinized carefully. An individual in the Christmas lighting business with an aim to grow to be a lighting provider for entertainment venues shouldn’t enter into the lawn maintenance business for supplemental income.
4. Is the market large enough to be financially viable – Some basic market research can identify the market potential.
5. Will the market accept this particular offering – More advanced market research and perhaps a concept test can provide insights into how consumers would react to the product or how the product may be promoted to fit a market segment needs.
6. What are the key customer segments? – The research and concept test should be designed to uncover jobs the customer needs performed by the product. Identify product, pricing, promotion and distribution requirements that closely fit the capabilities of the company. The closer the fit, the more likely the segment will be a group of key customers.
7. Will the introduction result in a profitable contribution to operations – Using the research above to determine the size of the market, project the number of purchases and associated costs. My rule of thumb is a new product or market introduction must provide a 30% operating margin to be viable. This is usually large enough to cover hidden costs or projection errors.
8. Do workforce, cash, capital equipment and operations requirements support the mission and vision statement?
9. Does the introduction create value for the company, the customers and collaborators? Missing value creation in any of these categories jeopardizes the chances for a successful introduction. Again consider Coke and the emphasis they put on creating value for the bottlers (collaborators) which in turn creates value for the customer and ultimately the company.
Usually walking through this checklist will identify areas that need attention before a launch of a new product or entry into a new market. While it is not foolproof it does provide a simple review that can be helpful.
This is the approach we use at GWR Research and it has proven very successful.
If you have some approaches that should be included in the checklist, let me know.
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