“Nobody ever lost money taking a profit.”
Basic marketing 101 demands that before you introduce any new product or start a business selling a new product, you need to make sure that there is a solid demand for the product. While this sounds so elementary, we continually have entrepreneurs and inventors that just forget about this basic tenet for good marketing.
We were called in recently to help an inventor that had developed a new type of dog blanket that was easily washable and dog hairs just did not adhere to the blanket. They gave me one to try and I can attest to the ability of this blanket to give warmth and softness to my dogs’ bed.
This product came into fruition as the inventor who really needed a product like this for his dogs and then invested over $100,000 in initial production and development expenses. His teams called JMI, as they wanted some help with some partner issues. Frequently, what people call us in to help turns out not to be the critical issue like in this case.
We were able to ferret out what the real issue should have been after much discussion. After all, the partner issues, pale in comparison to whether the product has a viable market. They spent all of this money without knowing if the was a real demand for the product. Of course, they asked their friends and relatives what they thought about the product and, of course, they got rave reviews. What they did not do is ask potential customers if they would be willing to buy the product and at what price they should pay.
In order to cover the costs of getting these beds produced they would have to charge a very high price and they thought they could do this as there was going to be a landslide of demand for the product. We very kindly told them that they needed to find out if there was a real demand for the product as we thought that this product was way overpriced if the demand was there. We suggested that they try to sell the amount that they have in inventory now on the web and we suggested that they take the dog blankets around to various dog events. They could set up a small table and try to sell the blankets at these events before they invested a lot of money into this product.
While it seems so simple to check to insure that there was a demand for this product, this inventor just got sucked into falling in love with his first idea but not his best idea. Additionally, he saw this as a way to achieve financial success without thinking carefully through all of the ramifications of insuring that there is a viable demand for his product.
Now go out and make sure if you are starting a new business or a developing a new product that you know that there is a viable demand for it. Some of the ways that you can do this are through surveys, selling your potential product to a small market or asking your existing customers what they think about a new product or service.