But Will It Fly?

To get a terrific new product to market, you need a lot more than a terrific new product.

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Ireceived a telephone call a few weeks ago from a young woman who, in partnership with her husband, had just set up a company to sell a new consumer product. She told me a story that I've heard many times, and one that's worth repeating. They had quit their jobs, started their company, spent their savings, and sold their house. Now they were ready to get their product into mass-merchandising outlets such as Walgreen, K mart, and the like, but didn't know where to begin. I listened to her tale of woe and began asking questions.

"Do you have a marketing plan?"

"No," she answered, "but we have a great product, and we know that once people see it they will buy it."

"How do you know that?" I asked. "Did you do some consumer research?"

"No, but all our friends told us it was a fantastic idea that would sell like hotcakes."

"Is the product ready for market?" I asked.

"Oh, sure, that's what we've spent all our money on. We're ready to go, but we're not exactly sure how we should go about getting stores to buy it."

I spent the next half hour or so telling her some of the things that stood between her and the customer. When I finished, she said, "Why didn't someone tell us all this before we spent our money?" I reminded her there were volumes written about marketing new products. "I know," she said. "I even plowed through a couple of books, but they were obviously written for people who already knew everything about marketing." After thinking about it, I realized that she was right. I couldn't think of anything I'd seen that might be called "Marketing for the Amateur."

So I thought it might be helpful if I outlined a plan for those of you with new products, but without degrees in marketing or the resources of a big company. At the very least, I can tell you some things you should find out before you quit your job and sell the old homestead. My plan doesn't take a lot of money, but it does take a lot of ingenuity, shoe power, and guts.

The first thing to understand is the terrible risk in introducing any new product. I doubt that one in 500 makes it from concept to market; in consumer products, the figure may be as low as one in 1,000. It doesn't make a hoot in hell whether you have a great product, a fantastic idea, or something that your friends say will sell like hotcakes. The rare product that does make it all the way does so only if it's the answer to a real consumer need. And even that isn't enough. You need to dot all your i's, cross all your t's, and have all the angels in heaven on your side. It also helps if you have 20 million bucks, which is probably the going price today for a large company to launch a new product. Don't think anything is going to happen just because you will it to, or because you are prepared to pour your life into it. But if you are good enough and lucky enough to make it, the rewards are incredible.

Let's start out with your idea. The first thing you need to find out is if it will pass the most important test associated with any new product. I call it the "Well, I'll be damned!" test. For any product to be successful, it must have what marketing people call a unique claim. In other words, potential buyers must say, "Well, I'll be damned!" when they see it for the first time. If they don't, your product is probably headed for the graveyard. Big companies spend millions to find out if consumers think their new-product candidates are unique, but since you don't have millions, and maybe not even thousands, let me suggest a do-it-yourself test.

To conduct this test, you must have a sample of your widget. Don't worry yet about mass production or perfection. If it's too expensive to make the actual product, then a sketch or drawing, or even a written description, will do. The important thing is to be sure that a prospective consumer can easily understand what your product is and what it's supposed to do. Now, take your sample to at least 20 people, the more the better -- not to your mother, or your brother, or your best friend, but to people who will be objective and won't say things just to make you happy. If most of them don't say, "Well, I'll be damned!" or "Why didn't I think of that?" stop right then. You still have your job, your savings, and your sanity. Go no further; your widget is a dog.

If most of the people you ask say the magic words, you're on the right track. Now ask them, "What would you be willing to pay for this widget if it were on the shelf of a local store?" Insist on a specific price. The next question is multiple choice:"If this widget were available at the price you suggest, would you (1) buy it for sure, (2) might or might not buy it instead of the widget you now use, or (3) not buy it." Then continue your questions: "How many times a year would you buy it? What are you using now? Are you happy with your present product?"

Ask these and any other questions you can think of, along with the age, occupation, income level, marital status, and so on, of each person. Keep a careful record of each answer. I can't tell you how important it is to be sure you are getting the right answers, not the ones you want to hear. If you want to be absolutely sure about the validity of the answers, ask everyone who gives you a positive response if they would like to invest their money in your widget. If they all say no or if they hem and haw, they probably lied, and you should know that your widget has fleas.

Now, take all of your questionnaires and "spread" the information. If you don't know how, find some 15-year-old kid with a computer. First, you want to know what you can charge for your widget. To get that answer, go to the "What would you be willing to pay" question, throw out the top and bottom 10% of the answers, and average the rest. That, whether you like it or not, is a rough idea of what the consumer thinks your widget is worth. Let's call it the perceived value. Now you have to subtract the approximate amount the retail store will want for its markup: around 25% if your widget is something you eat, drink, or clean your house with; 35% if it's a household item or an appliance or something you put on your face or hair or body; 40% if it's something that is normally sold in a hardware or specialty store. Because these percentages vary, to get more accurate information you should ask three or four local stores what the standard markup is for your type of product.

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