Every business wants to thrive, and many want to do so with an eye on expansion. So what is one of the best ways to grow your company…Offering new products and/or services is certainly one way to approach expanding. A new product for instance lets you enter a new market, which in turn gains you exposure to customers who you might not have been reaching previously. That said, developing new products can be somewhat tricky. It is a very methodical process that takes a great deal of research. You need to identify key market needs as well as have a sound development plan in place. Below are some tips for those looking to introduce a new product or service as part of their firm’s offerings.
What Are Key Market Needs?
Knowing what the market needs are going to be critical moving forward in any sort of product/service development. Research needs to be thorough at this stage. You actively want to engage customers and gather their feedback; they are the ones after all to whom you will hopefully be selling this new product. Find out their pain points, what gaps need addressing, what wants are currently going unmet. Additionally, look to competitors. Do they have a product out that is similar to the one you have in mind? What is their approach? Have they been experiencing success with their launch?
You’ve done all your homework, gathered relevant research, now this represents the basis for coming up with that killer product idea. Review what you have in front of you and try to determine which types of products are performing best within a given market. The research you’ve done should give you insight into what demand would be for a certain product idea. You also here, want to account for the cost to develop the product in question; then create a shortlist of ideas as you move to the next stage.
Identifying Your Target Market
Identifying your target market is a critical component of the new product development process. There are always going to be risks when it comes to introducing a new product—barriers to market entry. You can try and leverage the existing customer relationships you have of course to this end. But if it is a new market, you’re essentially starting from scratch and so you have to establish who you are and what value your product brings. And of course, figure out exactly what demographic you need to be targeting in doing so.
The Development Phase
Once you’ve done all of the above and are satisfied that the product you have in mind will be a successful one, then you need to initiate the development part of it. You may want to first develop a prototype and gather some feedback before full-on production.
Carry Out Test Marketing
If you do choose to do a prototype, test marketing is a great way to see how your new product might fair. This is a small scale version of what will eventually be your full market. Doing this could save you time, energy, not to mention money because if the results aren’t as expected, you now have the information to either tweak the product or maybe even scrap the idea of feedback is too dismal.
First Union Lending would love to help! If you do have an idea for a brand new product and need capital to get it off the ground, we have a funding solution for you.