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1: Identify the Right Target Market
Identifying the right target market can often be the difference between success and failure for new products. The right market will be more willing to accept, and ready to pay more for, the right product, and the wrong market will be slower to accept your product and will require more marketing efforts, cutting down on your profits. So choose your target market carefully. There are many factors that determine the right target market, and this chapter will cover two important factors: market size and pricing.
When you determine your market you need to answer these questions:
- Who are your customers? (income level, gender, hobbies, etc.)
- Where do they live? (city, state, region, or country)
- How will they find you? (they belong to an online community, read a certain newspaper, go to certain stores, etc.)
While many inventors want to enter a big market with lots of customers, this is most often a mistake. Your marketing efforts (unless you have a huge marketing budget) will probably be more like a drop in a bucket than a big splash and it is unlikely that consumers will notice.
You want to choose a market small enough that you can make that market notice your marketing efforts. As your budget grows, your market can expand, but you need to consider what funds and time you have now for marketing your product.
Your market maybe be local, or include specialty shops or boutiques. You may sell just through one retail outlet or through catalogs to begin with.
These Quick Strike Methods should give you a good start in bringing your product to market. Bringing a product to market is difficult, but also exciting and has potential for great rewards. At any point if you need help, let me know. Even if I personally can’t help you, the One Stop Invention Shop has a great team of associates that handle all aspects of inventing, from prototyping, patents, manufacturing to selling or licensing your product.
Most inventors don’t realize all the hidden costs in selling a product. For instance, selling to retailers through distributors means both the distributor takes a percentage of the wholesale price (sometimes more than 30%) and then retailer often takes 50% of the retail price (double the wholesale price). So if you decide to sell products this way, which many inventors do, you need to make sure that your target customers are willing to pay a high enough price so that you can produce your product and still make a profit on only 70% of the wholesale price, or 35% of the retail price.
You need to do market research to determine what price consumers are willing to pay and if they aren’t willing to pay a price that allows you to make a profit, you either need to choose different target customers who are willing to pay more, find a different distribution channel, or rework your product so it is cheaper to make, but still valued by your target customers.
When you introduce your product, you want to generate quick sales because building a history of sales, even just in one or two outlets, helps you convince other sales outlets to carry your product. But once you start selling, you need to commit yourself to continually growing your sales. Stores, catalogs, reps and distributors look for hot, up-and-coming products, and if your sales are always growing, you will have a much easier time expanding your sales network. If your sales stagnate, people will think your product has reached its peak.
Look for Small or Specialized Outlets
Small specialized stores can be a great way to get sales going, but it can be hard to find these stores. Specialized stores often have a loyal clientele who are willing to try new products and pay a higher price.
Selling local is the most common way to generate quick sales. You can personally contact store owners who may take your product on because it is a local product. You yourself can do in-store appearances, demonstrations or trials to get people to buy your product. And local news sources like to carry stories about local inventors so you can easily generate publicity. Selling locally can help you cheaply generate interest in your product and build a history of sales to launch your product regionally.
Catalogs are one of the most inventor friendly sales outlets in that they don’t mind one-product companies, marketing expenses are very low and it puts your product on an equal playing field with all other products in the catalog. Also most target customer groups have their own catalogs, which allow you to reach a national audience with minimal expense.
Partner with Reps
Once you build your initial sales success, say in local stores, start expanding your sales by partnering with sales representatives. They will cover sales in other areas, while you can continue you serving your local stores. You can even continue to build your sales rep network to sell nationally.
3: Create a Strong Market Presence
As I wrote in chapter 1, you want your marketing efforts to be more of a splash than a drop in the bucket, but how do you do that? The following items are ways that help you build sales and generate interest in your product.
Tactics that Help Brand Your Product
Branding your product means creating a name, logo, slogan or anything else that creates a strong association with your product or company. This is used to create trust and loyalty which contributes to repeat sales and word-of-mouth advertising.
Some ways to create branding are:
a. Point of purchase displays – these are special displays near your product in a store, almost like advertising. They come in different forms but are often cardboard and are on the floor next to your product.
b. Clever product name – the name of your product should grab attention and be easy to remember. Sometimes having an edgy or funny name will get people to talk about your product, but having an edgy or funny name is not appropriate for all types of products.
c. Slogans – slogans are almost a second name for some products and helps reinforce the brand.
d. Endorsements – A celebrity can sometimes help brand the product by associating your product with someone customers trust or admire.
In most sales channels, your packaging is your salesperson. Unless you provide in-store demonstrations, no one is going to push your product in a retail setting. That is why you need to create attention-grabbing packaging that effectively sells your product. Most purchase decisions are made in a few seconds,so if your package doesn’t quickly communicate your product’s benefits, your sales will not go well.
Publicity is a great way to get a lot of attention. One of the great things is that publicity can be free. If you can interest news sources in your product, you, or in the story behind you and the product, there is a good chance they will do a story about you and your product.
You can also do contests, trials, and other events to promote your product and invite news people to the event. For instance, do you have a new bike product? You can organize a bike event, even for a favorite charity if you’d like, and have people try out your product.
Keep Marketing Expenses Below 10% of Sales
Marketing can be very expensive, but it doesn’t have to be and inventors, especially when they are just starting out, need to be careful of how they spend the limited dollars they have allotted to marketing.
Low Cost, Even Free Marketing Tactics
Publicity, like I mentioned above, can be a free way of exposing your product, but there are many more low cost tactics. In store demonstrations allow you to build sales by investing only your time. You can also see if bloggers or websites will review your product and post their review online if you send them a sample.
Networking with Others
Today’s social media world makes it very easy to network with your potential customers. There are probably Facebook pages for your customer group and by getting involved you can exposure yourself and your product to a large group of people. Social media also has a large potential for creating word-of-mouth advertising as people share things they like.
Select Small Markets with Easy Communication
By choosing smaller markets, your marketing expenses will be much lower. Smaller markets have fewer publications and websites, so you will need to place fewer ads and the ads are also inexpensive. Ideally, you want a market with publications and websites that have good readership, so you can be sure that your ads are reaching potential customers. Also, you can offer to write articles for these media outlets and list your web address and that you invented such and such a product in your bio info.