Small Business Guide: How to Bring a Product to Market
Bringing a product to market can be a stressful and challenging task given all the details that businesses must manage. The checklist below is a quick list of items that should be considered before a new product is launched.
The list is meant to be a general guide to help small- to medium-sized businesses with limited resources launch a new item. Keep in mind that it’s rare that all items can be totally focused on, since most businesses have many moving parts and must prioritize what resources get used and where.
Know your Market: Many small- to mid-size companies simply cannot afford in-depth market research. However, this does not mean that you can overlook understanding the market. Shopping your competitors and understanding market trends is vital to any new item launch. Spending time getting your product in front of as many “test customers” is a great way to test ideas (note friends and family might not be the best approach as most might not be totally honest). The more people “not close to you” that you can have try your new product the better. These people are more likely to give you honest feedback.
Financially Speaking: This area is essential to understand before a new item launch. The list below includes questions you need to ask as early in the planning process as possible:
What is the cost to make the new item? (This should include packaging, point-of-sale support items, marketing cost, etc.)
What will your price point be?
What margin will you make (gross and then net)?
What will your retail partner (either brick and mortar store or digital) charge consumers for the item?
What financial support will you need to provide for launch (sale discounts, live or passive demo’s, free fills for stores, free samples for customers, etc)?
Will your store pricing be competitive?
Distribution: How are you going to get your new item into customer’s hands? The following questions are good to ask yourself as you evaluate this topic. Remember that selling the item will rely heavily on you. Distributors can support, but the sales push has to come from you or your team to make any new item launch successful.
Who will get your product to stores?
How much will that cost you?
Is your item perishable and, if so, will you have to guarantee the product for stores?
Can you identify 10 outlets for an initial release?
What is your production capacity (you never want to oversell your production; this could leave shelves empty)?
The previous items are ones that all companies address in one way or another. Just remember that no launch will be perfect and there will undoubtedly be areas that are overlooked and challenges that will arise. These issues will be easier to address if you pay attention to the core principles:
- Know your market, understand what your consumers are looking for and make sure you are providing a “value” to the customer (value does not have to be financial. Value can be solving a problem, saving time, or other wanted attributes).
- Understand your true cost – not just the product cost. If you spend dollars with a marketing company, consultant, or in-house, that is a real cost for the business (rent and lights are not free).
- Just as important as one and two is understanding how you are going to get the new product to the customer and the cost associated. Some full service distributors can cost 30 percent or more.
The reality is that very few new items are instant hits. Most take a lot of work, time, and money before they start to pay dividends. Being ready to sell your product and support stores with time and promotions will help to make a new launch a success.
I hope this very quick overview of some of what we feel are imperative questions to be asked before any launch will help make your launch a little easier. I look forward to seeing and purchasing your new items on store shelves soon.
Chris Girrbach owns Pangea’s Pizza and co-owns The Great Lakes Potato Chip Co. with his father Ed. Great Lakes Potato Chips celebrated its fifth anniversary last year and was named one of the “Michigan 50 Companies to Watch.”