Exploring the elements and components involved in arriving at a reliable and reasonably accurate evaluation of a product, concept or idea. This is inclusive of practicably any item of intellectual property irrespective of the manner of product disposition, ranging from use in a closed research environment to outright sale.
Image is everything. It is frequently the difference between success and failure; sale or no sale. Image development and product branding are both components of marketing, but the synergy of the three, seamless and consistent, complete the ultimate marketing package. Add a product that sells itself on the strength of its own value and merit, and the odds of success become very favorable.
This module includes segments on every major aspect of marketing. Identifying your market, knowing your customers and competitors & public relations. Advertising, market research, test marketing & cost benefit analyses. SWOT (strengths, weaknesses, opportunities & threats), Quality control, business to business marketing, warranties and numerous other vital marketing components are included in this module. After completion, you should be able to confidently develop your own marketing strategies and plans, based on proven techniques & formulas for success!
To market a product, you must first understand “to whom” you are marketing the product. Every market has defining attributes in terms of that market perceives and copes with its surrounding environment. Like many things in life, marketing is a discipline ruled by defining balances i.e. if you market to narrowly you may inadvertently exclude a potential powerful opportunity. If you market too broadly, you may not be able to adequately capture the market at all i.e. “you can’t be all things to all people…you end up being nothing, to nobody.” Somewhere in between is where you strike the balance.
Every once in a while, an innovation appears that is a “blue jean” moment, where you have mass adoption, like cell phones and desktop/laptop computers. There was a day in our not so distant past that such devices were so large and cumbersome that no one would have dared to believe that one would eventually be in every home, nevertheless multiple. You can even have mass industry adoption, usually based on mandate at a regulatory level, such as seatbelts and airbags. This is especially true if the invention provides some form of demonstrated safety or environmental factor. Either way, early in your thinking, do not constrain yourself, have fun and think of all the potential applications. There will be a point when you begin to narrow down your markets.
The level in which you identify and understand your target audience can be often directly correlated to how successful you will be in marketing your product. For a B2C or retail-related products, it is often necessary to segment your target audience by several attributes such as gender, age, color, race, religion and salary base. Each one of these aforementioned characteristics may have a different and important viewpoint to your product. In the world of marketing, these are simply called demographics.
If you have a B2B play or business-related product, you may be interested in firmographics i.e. industry; size; culture; privately-held or publicly-traded; follower or leader; and domestic, international or global among a select few. B2B marketing is often a little harder to accomplish mainly because there is often more than one person to convince in a company before they implement your solution whereas in retail, I only need to convince you. However, on the other hand, there tends to be more competition in the B2C world.
My preference is to as narrowly as possible define the target audience at first. Then create key messaging such as a Value Proposition (VP) and a Unique Selling Proposition (USP) that can be used to stimulate a particular target audience to a definitive “Call to Action.” Next, work your way out to include potential other markets. Each of your key messages should have a common thread, but can be tailored for each audience.
After identifying your broad market, you will need to take some time to try to identify specific groupings, or segmentation within that market…this is done for a number of reasons… to include why one segment would buy a particular product, yet the reasons for the purchase are different from another segment; 2) the characteristics and behavior patterns are different in a particular segment; and 3) there are subtle differences within certain market segments require deeper sub-segmentation. We are looking for particular categories, if they exist as to certain behavior patterns and characteristics (racial, age, ethnicity, regional, education, income).
Cadillac, the symbol of luxury was losing share to BMW, Lexus and Infinity among the younger generation…Cadillac also was tussling with the issue…especially with regard to the use of its cars in a preponderance of Gangsta Rap Videos…especially involving young, urban minorities that recently found new wealth in the music industry. Within Cadillac there were two schools of thought, save the brand from being “tarnished,” or let it ride and see where it takes us. If it wasn’t for the Rap industry, I am not sure Cadillac would have mounted such a strong comeback. Why do I tell this story, because sometimes you just don’t know what will carry you the finish line.
It is critically important to know your competitors as well as you know yourself, if not better. You must understand not only their products, but derive from those products how they think so you can anticipate their next move. However, I want to make something perfectly clear…you should not react to the market place based on what you competitor is doing…otherwise you will constantly be trailing behind them. Instead, you should be forging your own path, not relying on your competitor to guide you.
Look at the Environment through a PESTEL Analysis (Political, Economic, Social, Technology, Environmental and Legal) and determine how each one of these may contribute positively, neutrally or negatively to the launch of your innovation.
Next, look at the Landscape through a SWOT Analysis (Strength, Weaknesses, Opportunities and Threats) for each of the competitive products on the market. Then, conduct an additional analysis on your own product. Compare and contrast your analysis to that of each of your competitors. What you should hopefully find is your competitor’s product weaknesses and threats, are your product’s strengths and opportunities.
I have always been a proponent of sound public relations over advertising. Advertising has its place, and can been extremely effective, however, public relations generally costs less and affords you the opportunity to better tell your story. You are limited by how much you place in an advertisement. However, in a well-placed story, you can be much more liberal in how you describe your product. In addition, many stories are replicated, and will appear in other newspapers, magazine and online articles, whereas most advertising has a very limited life span.
Advertising can be a very powerful mechanism. My issue with most advertising is that it is expensive, and usually gives low to marginal results for a relatively short fraction of time that is can be seen. There is not a wrong or right when it comes to advertising…I have seen some of the most irreverent ads generate blistering sales. And, at the same time, I have seen ads that you would think were awesome, all out fail. It is very difficult to determine how an ad will do.
My father was of the generation that used Old Spice. I would have never thought of using Old Spice, however, through the craziest set of commercials, Old Space made a comeback and has become a favorite of a much younger generation.
When possible, conduct as much market research as you can, including patent searches before heading too far down Innovation Road. There is nothing worse than thinking you have a novel idea, and only to find out that a patent already exists for it.
There are many different ways to conduct market research, most of which can be done while sitting at your computer. However the good thing is that there is really no right or wrong way to start, only be thorough. What use to take days, can now be accomplished in hours, because the Internet is our friend. Look at industry analyst reports and news articles that pertain to your innovation essentially anything and everything that you can get your hands. Scour blogs and Web sites, especially academia for information regarding future projects. See if you can begin to quantify the need for your product. And, see if you can begin to monetize that need. You will want to find out who your competitors are and how far along are they. You will need to found out the Value Propositions and Unique Selling Propositions of your competitors and conduct the appropriate analysis to determine market size and the number of players.
If financials are available from publically-traded companies that are acting on a similar innovative concept as yours, dive in to determine revenue, profits and long term viability.
The opportunity to test your product among those in your previously defined target market is very important. Conducting a series of recorded Focus Groups aimed specifically at that target market can uncover a tremendous amount of information as members of the focus group interact with your product concept. These are often referred to as closed target markets because they generally take place in an environment that resembles a lab. Careful observation may reveal key faults, as well as critical unique points that will help you create and produce the final rendition of your product. This generally applies more for B2C plays.
The key to a good focus group lies in three areas…1) a strong cross representative cross section of your target audience; 2) the right moderator that can engage the focus group with leading them; and 3) a great set of questions that allow the focus group to think three dimensionally…What do we mean by 3D thinking…The ability to add creativity. Anyone can think two dimensionally or linearly, however, the best products are those that can think three dimensionally or even four dimensionally, by adding the element of time.
Another B2C technique is an open test market is when you test and observe the target market interact with your product in the environment it is to be used, without the target audience, at first, knowing. So, for instance, if the product is a proposed new coffee lid, and the coffee shop owner has approved the test market, you can position yourself to observe people interact with the new lid. Then, when they exit, you can quickly interview them to get their impressions of the lid.
B2B technology often deals directly with a more complex set of issues prior to a sale. For instance, instead of a standard focus group to determine the attributes, be they positive or negative of your product may be difficult to do with a focus group room full of suits…note I said difficult, but not impossible. For B2B plays, it is often more suitable to see if a company is willing to test the system out. If the test goes well, the opportunity to actually sell the company the technology is in itself a huge endorsement.
Obtaining actually quotes, that cast your product or technology in a positive light can be extremely valuable in that it could persuade other companies to follow their lead, or at least try…
With almost every product invented, there comes a point where the customer may really find value in your product, however, you cannot produce the product at a price point that the customer values. Hence, this is why we conduct a Cost Benefit Analysis (CBA). What we want to understand is how much someone is willing to spend for such a product. How do you find this? First, add it as one of the questions the facilitator will use in his or her Focus Groups. When you conduct formal or informal Voice of the Customer (VOC), add it to your list of questions. Also, do a detailed pricing of all of the NBAs on the market. If you truly have a USP that is valued by your customer, you can charge a higher price than the NBA. However, if your USP is not very strong, but the market is large and your product entry is fairly early into its maturity, you may be able to execute a “balanced” approach, meaning, that your product is no better nor worse than any of the other products on the market, and you will need to price accordingly…may be as simple as your product comes in multiple colors.
To perform a CBA, you must work with three or four manufacturers. Each of these manufacturers should be placed on Non Disclosure/Non Circumvention Agreement so they cannot steal your idea and start producing it as their own. The manufacturer will ask you a number of questions…if you don’t already, you should have a design engineer assisting you in your efforts. The goal is to tally up all of the costs associated with manufacturing your product and getting it to the point of sale such as material, machinery, tooling/re-tooling, labor, packaging and distribution. You need to thoroughly understand every cost involved from the moment every piece of raw material is bought to the point of sale. You must also understand if the material fluctuates in price; is it hard to get; should you have more than once source; and what is the difference in price of the second source. You must also understand where are the inherent or negotiable price breaks i.e. if you manufacture 1000 a month, the price of the material may come down 5%. If manufacture 5000 a month, it may come down 10%. Add all of these costs together.
Now, you have to ask yourself the hard question. How many do you expect to sell a month i.e. 100, 500, 1000, 10,000 or more? Always understand what the maximum capacity of your manufacturing center is and what the minimum capacity is so you don’t start running in the red. Now, when you have all of these numbers, run what your price is based on your cost to sell. If you are well under what you believe the acceptable price to the customer will be, then you have room to work. If you are well above, we have a problem and we need to relook at where you can drive costs out of the process, or extend the gap of your VP and USP to command more price.
As you launch your first product, and if it is successful, you will have others targeting you to get their “piece of the pie.” Always have your ear on the street…get an understanding who is coming after you…and how they are coming after you…by price, product enhancements, both...You need to always have a feel of how far you are ahead of the competition before they could effectively catch up or surpass your position. Once you first product is designed…do not rest on your laurels, be planning “what’s next.”
In general, there is not a right or wrong answer to the question of whether you should create your own sales team or you should use distribution partners. It really comes down to an issue of comfort, how hard you want to work and relationships. Sometimes the simple fact of the matter is you know your product better than anyone else therefore you should sell your product. However, sales are often based on a product demand and strong relationships. There are several good reasons to use a distributor. They tend to have established relationships with your customers. Second, they maintain the inventory, so you don’t have to…you will understand this concept better when you have to deal with Balance Sheets. However, you have to pay a distributor a cut of your profits. The question you have to ask yourself is will you sell more in quantity using a distributor that makes up for the smaller profit or will you sell more yourself and as quickly even though you may not have the reach of a distributor.
Three words…Simple, Speed and Accuracy! When placing an order and/or using an order system, either through your own or through a distributor, it needs to be very simple to use. Seconds, can make a positive or negative difference in the ordering process. Second, the order needs to be fulfilled quickly and accurately. Orders that are not backlogged need to be fulfilled within 24 hours, and customers need to have the ability to choose how they want it delivered whether that is ground or air, standard or priority.
As with the design and production of any product…quality is truly “Job One.” Quality Control must not be thought of as a destination, but rather as a process. It is important to effectively weed out as many potential quality control issues in the design process as early as possible.
Quality can destroy a product, its sales, the company’s brand reputation, and in the most extreme situations, result in injury, death and endless lawsuits that will end up with the company in bankruptcy. Product safety cannot be sacrificed so make sure your testing regimen is very robust.
Quality is also an issue of balance. All parts wear out with use over time. The issue is what is a legitimate amount of time in the eyes of the consumer vs. the manufacturer? It is funny how everything wears out the minute it is out of its warranty period. The bigger issue is to get the customer “hooked” on your product, so that even if it does wear out every once in a while you have built up enough brand loyalty that customers will return to repurchase the product, or the part that is malfunctioning. In general, the longer a product lasts, the more price it can command…however, this brings up another issue, obsolescence.
Quality is directly-related to warranty and product return. The higher level of quality, the more you are likely to offer a longer warranty. The longer the warranty offered, the more the consumer is likely to believe in the quality of the product, and the more likely the consumer is to buy it and become a loyal customer if it meets or exceeds expectation.
Quality also is tied to product returns. Standard product returns are generally set at 30 days. You want to give the customer adequate time to evaluate the product, however, not to abuse this opportunity. What is important is you must understand why the product is being returned. Is it quality, under performance, reliability or a host of other issues. This is important if you are contemplating a redesign or a next generation product.
Most people think of branding as a logo, a specific set of colors and a tagline, all inclusive referred to as the Corporate Signature. However, brands stretch far beyond the mundane of a colorful shape because they evoke a specific set of emotions in us, whether positive, negative or neutral.
Every day we are inundated with thousands of brand images from the time we wake up each morning to the time we go to sleep every evening. Just think of all of the brand images we consciously and subconsciously process…the one we see on TV and on billboards while we drive; hear on the radio; read in the newspaper; and inadvertently run into by way of car emblems, bumper stickers, corporate logos, every second of the day. Some of these sounds and imagery evoke powerful feelings within us. When we see a Lexus we have feelings of luxury and when we hear Harley-Davidson, it gives us a feeling of power, freedom and a little bit of rebelliousness.
Humans have five main senses: sight, smell, touch, taste and hearing. We also have a host of other equally powerful senses like temperature, pain and balance. In addition, the concept of emotion also plays into how we perceive our environment and specific situations.
Brands are designed to evoke certain emotions and behaviors in us. Truly great brands create conceptual frameworks that embody our very essence. For instance, Nike is not a manufacturer of sports equipment and clothing, but rather it is a symbol that embodies “heroism.” Harley does not make motorcycles; it is the conduit to “freedom.” Colt, is not a self defense weapon, it is the gun that “Won the West,” and therefore, it if you want to be a winner, you will carry a Colt. Apple does not even put instructions with its products, why…because it makes “technology intuitive.” We say that truly great brands “transcend” the boundaries of the “mundane and ordinary” and come to represent concepts that are beyond the standard senses. In most cases, your brand will start with a simple logo and tagline. However, over time, with a good product, great marketing and exceptional timing, your brand may begin to take off.
There are four key dimensions to any brand to include the following: 1) Brand Identity 2) Brand Essence; 3) Brand Personality; and 4) Brand Positioning.
The Brand Identity is the logo and the tagline…how people recognize the brand.
The Brand Essence is what people/potential customers identify with in the brand which may include concepts like trusted, performance and luxury.
Brand Personality is how the brand is perceived i.e. fun, serious, exciting, adventurous, no-nonsense, heroic, etc.
Brand Positioning is determining how we position the brand against other competitive brands in the market place.
No matter what, try to use the following as a general guide when it comes to branding a particular product or system:
Knowing you product; understanding your customer (Market); having conducted focus groups and test markets; you now should be able to assign a Value Proposition and a Unique Selling Proposition to your product. Why? The Value Proposition tells the customer why this is important, why he or she needs to buy it…essential, why it is of value to you…It will save you money; save you time; make you safe; allow you to stay connected; make you more efficient; and/or make life more comfortable. Who doesn’t want all of these things? We, in our own conscious assign a value to each one of these life altering concepts, some more than others…and so does your customer.
Second is the Unique Selling Proposition (USP). In the case that no one has ever invented what you are proposing, the Unique Selling Proposition defines what is specifically unique to your product over the Next Best Alternative (NBA). The USP should be a strong as possible to create the largest gap between your product and the NBA. Your USP should contain concepts like: because it contains [ingredient]; it processes faster because [blank]; it has better picture resolution because [blank]. This will give you maximum flexibility to set price accordingly.
The Value Proposition and the Unique Selling Proposition should be short and easy to memorize because you are asking customers to remember it as well.
Pick colors that represent the message you are trying tell your target audience. Red is racy; black is elegance or mysterious; green represents growth and sustainability; and white often represents purity. However, if your target audience is in a different country, the color palette may be completely different.
Taglines, are catchy little phrases that usually evoke a “Call to Action.” The best taglines are generally formatted in odd numbers or words such as threes, fives or sevens. For instance, Nike’s “Just Do It” or “Army of One,” or American Express’s “Don’t Leave Home Without It” or Las Vegas, “what happens here, stays here.” People remember great taglines. How many times have you and your friends said the Las Vegas tagline at parties or around the water cooler at work. Great taglines often shape the way we think and how we perceive the world around us.
Determining your Point of Sale to some degree will be based on your Cost Benefit Analysis. How much leeway, or flexibility do you have in your margin versus how much capital do you have to spend on public relations, advertising and digital media? Do you want to sell through a distributor, or in a retail store, or direct from your own storefront or over the Internet?
With the Internet, all you need is a place to store inventory, and you don’t have to pay a lot of money for a storefront, nor overhead in training and an elaborate staff. However, if you intend to take this path, you will need a strong commerce-based website with a fairly strong PR/advertising budget to get the word out about your invention in order to drive people to the web site.
If you intend to use a retail store, you need to determine whether you are going to do it yourself, or do you want to use a distributor. Doing it yourself saves money and improves your margin, however if this is your first rodeo, you may not have all of the relationships with retail stores, nor “the reach” to get to them in a consistent way, hence a distributor. However, using a distributor does mean less money in your pocket, however, that could be made up with more volume and less headache overall.
If your innovation is going to be manufactured in the United States or overseas, you will need to understand not only the manufacturing costs, but also the logistical costs in terms of shipping and warehousing, and how each affects your business model?
In terms of software and hardware, you may want to look at partnerships with Value-Added Resellers or VARS. VARS add features or services to an existing product, and then resell it to a customer, usually as a turn-key solution or as an integrated product. Many VARs have integration staffs, and have relationships with an array of medium to large companies that require systematic Information Technology (IT) products and upgrades. This may be a valuable way to sell your product or services if it is a B2B IT play.
Most importantly, understand all of your options, and which works out the best for you, your product, your business and your lifestyle.
Intellectual Property Brokerage
From Paper Napkin
Intellectual Property Management
Ideashares is a Virtual Idea Incubator that compresses the time, costs and risk associated with the early stages of Ideation. Our mission is to help great people activate great ideas by providing them with most efficient path from paper napkin to profit.
PREPARE TO HAVE THE POWER OF IDEATION PLACED BACK INTO YOUR HANDS!