Love Is Blind: Product Planning With Your Eyes Open

You’re sitting at your desk, and suddenly it hits you; a breathtakingly beautiful idea for a new product, that “one and only” offering to catapult your company into instant success. You know it will work. You know everyone will want to buy it. Even your family loves the idea. You invest a good deal of time and a substantial amount of money developing and introducing this product you love, but a year passes and not one unit sells.

What at first seemed like an exciting, profitable new concept has become an extremely expensive, disappointing undertaking for your company. How could this have happened?

Quite simply, you were blinded by love and you fell for the wrong product. More than a mere business decision the product became a powerful new passion for you or your company’s product development team. The obsession for this new product was so strong that normally pragmatic business people ignored logic to pursue the glittering profits they felt it promised. It’s not an unusual problem. Actually, it happens to 80 percent of new products and it’s not exclusive to small businesses. Remember “new” Coke, McDonald’s McLean burger and the DeLorean?

What can your business do to avoid the “love at first sight” new product mistake? Here’s how to identify the proper, and profitable, product needed for your business expansion.

A Proper Product Planning Process

We have combined a number of existing new product development systems into the following practical process. We explain each step in the process below and follow each step with a critical assessment question. This system can help you design a new product offering for your company with less risk and more control.

In the process, make sure you create a cross-functional product development team that includes representatives from sales, engineering, operations, marketing, finance, executive, legal and other areas critical to new product success. Also, guard against any one member of the team dominating the discussions or decision-making process. All team members must honestly critique and support the project, or the new product’s chances of success are minimized.

Step 1: Search for a Concept

This is the fun part of product development! Generate concepts for new products from employee recommendations, an engineering or managerial “think tank,” customer suggestions and brainstorming by the product development team.

Critical Question: None. Just be as creative as possible within the parameters of your chosen market.

Step 2: Select the Best Concept

Examine all the ideas generated in Step 1 and reduce the number of new concepts to a manageable size. Rank each new product idea by a set of criteria customized to your company’s strategic objectives. Some examples of important criteria are:

o Production / Technology Capabilities. Competitive / Legal Environment

o Financing Issues

o Marketing Requirements

Critical Question: Is the product compatible with company resources and objectives?
If the answer is no, you must modify this idea or return to Step 1.

Step 3: Develop and Test the Product Idea

Turn the broad general product concepts into a specific product idea that will appeal to your target market. You must decide how this new product will benefit your customers. It is critical to obtain their direct input or reaction to the concept through market research such as surveys and focus groups.

Critical Question: Do your potential customers have positive reactions to your new product concept?
If not, you need to modify the product or return to Step 1. Be sure to objectively analyze your primary research to confirm your answer to this question.

Step 4: Look at the Business Potential

Perform a complete financial analysis of your new product’s potential. This analysis should be as detailed and realistic as possible. Product costs, profit margins, return on investment, cash flow issues and volume projections are financial considerations to closely examine.

Critical Question: Can we manufacture this product profitably with our company’s current resources?
If the answer here is no, you must abandon the product and start over. Do not attempt to juggle the numbers to reflect positive financial impact when the impact is really negative. Remember, love is blind – trust your numbers.

Step 5: Make the Product

After answering yes to all critical questions in the previous steps, now, and only now, you can begin the prototype construction. This phase of your product development requires a complete commitment of the budgeted resources and the entire company’s support in a variety of unexpected ways. This level of commitment could strain the nerves as well as the pocketbook, so be prepared.

Critical Question: Does the product work? Do we have the ability to manufacture and market this product profitably?
If no is the response to either question, you will need to prepare for added expenses as you hire outside assistance, modify the product or develop a more suitable offering.

Step 6: Test the Product

Roll up your sleeves and get going! Manufacture a small quantity of your new product and put it in a test market. Your company should use the same marketing, selling, pricing and distribution tactics it plans to use in larger markets. This is the time to check volume potential, marketing effectiveness and customer perceptions.

Critical Question: Do the test market results indicate satisfactory market potential and customer acceptance?
If you feel the results are unacceptable, abandon or redevelop the product.

Step 7: Commercialize the Product

If your answer to each of the critical questions has been a resounding YES, you are ready to roll your product into an introductory market. Go for it! Start selling!

Critical Question: Are sales results satisfactory?
A no answer here means that you may need to modify your commercialization program or abandon the project. If the product still appears to have potential, it may be time to refine marketing strategies. Objective external assistance may help you modify your marketing program.

Although the success rates for new products are low, using these steps may help your company increase the odds of success by identifying a new product with good profit potential before you invest significant company resources.

Critical question: How can you tell you are finally in love with the proper product? Count your profits, of course.

Recommending Amazon Products on Squidoo

There are many ways to make money using Squidoo. A favorite way for many people is to recommend products for sale on Amazon which are related to your subject or niche. For example, if you have a lens built around Luke Skywalker from Star Wars, you can feature Skywalker action figures available for sale on Amazon. If you choose to use the Amazon modules on Squidoo, then you will most likely make 4.25% in commissions on your sale because Squidoo usually lands in the highest bracket for affiliate commissions on Amazon which is 8.5% on general products.

Many people like to use their own affiliate links for recommending available Amazon products, but once Squidoo axed the use of the Iframe, using your own affiliate links went the way of the dinosaurs. Squidutils.com then came along and added the ability to make your own links using their Amazon link building service. To use this service, you have to give up every 10th click on your affiliate link to Squidutils. It really isn’t a bad deal, but some commissions from your lens can be lost this way.

You can now set up your own Amazon RSS feeds for Squidoo with a small amount of work on the front end. You will first need to set up a generic Storestacker website which is real simple. Then you need to add a category to your site for the type of product you would like to feature. Once this is done, generate an RSS feed from your category, copy and paste it into the RSS module on your Squidoo lens.

The feeds produced by Storestacker and not as pretty as those generated at Squidutils; there has to be a way to make them look better and you can be sure that I will be searching for the solution.

General Mills Tackles Social Media – How Social Media Helps Market Products

The term “social media” has caught the internet, news media and other networks by storm over the last few years. What exactly is it? Social media started out as a way for people to connect with their friends, family and other people on the Internet in one central place. Websites such as Facebook, MySpace and Twitter give people the opportunity to share information, photos, news and other things with the people that they know. After only a short period of time, businesses realized that they could use social media as well to market products, services, websites or other relevant information. These days, you can find just about any large company, small business, news outlet and other media companies using social media and social networking to market their company, products or services. One of these such companies is General Mills and how they use it really goes to show how effective it can be.

Recently, General Mills rolled out a line of cookie, brownie and cake mixes that are gluten free. Food products that are gluten free are said to be healthier because some people have food allergies or sensitivities to products that contain gluten. Gluten is composed with different grains and some people cannot tolerate them. Since General Mills had this product that they wanted to market to people who were looking for gluten free cookie, cake and brownie mixes, they needed a way to get the word out fast. In order to spread the work quickly and effectively, they turned to social media.

One of the ways that General Mills has marketed to people is by sending out samples of their gluten free products to popular bloggers on the Internet. In turn, the bloggers write reviews or make posts about the products on their websites and that generates sales for General Mills. Here are a few reasons why this method of marketing is smart and effective:

  • The Internet is present in just about every area of the world, which makes it easy to access. By marketing online, companies are reaching more people than ever before.
  • Using social networking websites can easily create a fan base and following, especially for companies like General Mills that have been in business for several years and already have well known products.
  • Having a Facebook, Myspace or Twitter page is completely free. Even if free samples are provided to bloggers, it is very cheap compared to expensive television, radio and billboard ads.
  • It reaches more markets than traditional advertising.

Gluten free products are more expensive than the products that contain the grain combination, but for people who cannot tolerate it, it is money that they seem willing to pay. Social media is a market niche that seems to continuously growing and it is not letting up.

Make Product Niches Easy to Locate

The products that make you the most profit margins, are not always the best products to sell. Those types of products always seem to have more competition. And what’s worse is; the competition is usually charging a way lower price than you can afford to sell the same product.
Popular products like I-pods and cell phones are not very good money makers. Especially if you are selling on ebay. Because everyone and their mother are selling I-pods and cell phones on eBay already. That means more competition and lower prices than you can afford. Stay away from popular or general products that bring lots of profit.

Think outside the box. Think small profit, lots of sales. I would rather sell 100 items a day and make 1 dollar profit on each item; than sell one item and only 20 dollars profit a day. Think small items that people need. Think about the things you use on an everyday basis. Think about products you like, use, or need. Do you really need an I-pod or do you want to sell them because they are popular?

You have to be smart and think 3 steps ahead if you are going to get into sales online. Make things as easy as possible for you at all times. Don’t struggle by doing research on niches that might work. Use your head, stop for a few minutes and think of products you need on an everyday basis. Necessities usually sell better than luxuries online.

Necessity may be different for different people though. For example, a headset and microphone may not be a necessity to most people. But, to a tele-communications expert, it would be a necessity. Think about what products would sell and would have little to no competition. I always say sell accessories for popular items. To this day, that little strategy works great.

Even little things like cool drinking cups sell great. You can make some good money if you sell a lot of them. Today, I want you to sit back and think about all the things you use on a daily basis. I bet if you did some research on those items, you would find the sellers, sell a lot of them. They might not make a lot of money per sale. But, like I said earlier: if they sell one hundred items a day with one dollar profit on each, that’s a one hundred dollar day. When I first started selling online; a hundred dollar day was a great day.

Think about it. The most popular and obvious Niche is not always the best niche. Too many complications arise when you have 3000 other sellers trying to out-do your starting price. You need to find a new ways to get away from that kind of competition. Think about the things you buy most, besides food and clothing. I bet you could open a floodgate of new possibilities if you really think about it. Everyday items sell remarkably great compared to a new television or surround theatre system.

I probably sell everyday items 1000 to 1 compared to big luxury items. People buy what they need. Once you realize that, you can make sales happen with a more positive outcome. Stop selling items just because they have a big profit margin. Start selling items that you know will sell. Give these little insights a try. They have worked great for me through the years.