Article first published in Food & Beverage Reporter.
If you, like so many entrepreneurs before you, are thinking of launching a new product or range of products to market, then this 3-part article series is for you. In this article, we are going to explore some of the things you would need to consider when taking a new product to market.
In part 1, I am going to address market research and product development. In part 2, we will explore branding and packaging and in part 3 we will look at distribution and sales.
Perhaps you are launching a unique, never seen product, or perhaps you’re a challenger brand looking to offer a unique twist to an already existing market. Regardless of what you are launching, there are some things that you need to consider if you want to progress your innovation from the concept phase and get it into the retail market.
You will need to plan for each of these phases and budget accordingly to ensure you don’t run dry halfway through the process. Please note that I will not be covering every phase extensively, rather I am going to cover a couple of key points to help you move in the right direction.
Hopefully, by the time your product has been developed, you would have already done some level of market research, often however we find that this is not the case.
In our line of work, we meet with many different types of entrepreneurs, many of whom have already spent an excessive amount of money on R&D to develop a product that they believe will change the market. Quite often, by the time we get involved with an entrepreneur, the product has been developed and we then need to construct our market research to justify an existing product to the market.
Regardless of where you are at, I am going to propose some questions that you should aim to answer during your research phase. We will use the example of a product developer that is launching a new tomato sauce to market.
- Does the world need another tomato sauce? How saturated is this market? Who are the big players? Can I compete with them and if so, how am I going to compete with them? Would you compete on price point or perhaps with your unique recipe? It is important to dig into the market and find out if your product really is competitive and adds a unique edge.
- Is there something that the current tomato sauce suppliers are not offering? Perhaps a low-calorie sauce that offers the same level of flavour, but is wholesome and free of any additives?
- Can I / Have I produced a product that solves this need? And finally, if I can / have – would people really care, and would they adopt my product in place of what they currently have? The answer to this question is vital, if the market is not likely to adopt your product, even though it might be better in every way, no amount of marketing can help you drive sales. People must want to use your product.
- If you have already developed the product, have you done any tasting with non-biased parties? i.e., not your family and friends, who are obligated to be positive and supportive of your new venture. Test your product with complete strangers, who are not nice and will not just tell you what you would like to hear. I have worked with big and small companies and found that very often when you place your product in front of a large group of people, you are bound to get feedback that 1) you will NOT like and 2) will make your product more desirable and sellable, once you have considered your key target audience’s needs.
Many entrepreneurs develop products to soothe their own pet peeves and will become highly offended by the results of market feedback. We conducted focus groups for a new client recently. Many of the participants in our tasting sessions offered great and encouraging feedback but some said that they didn’t like the product. They didn’t like how the aftertaste lingered and felt that their throats felt a bit scratchy afterwards. Of course, the owner of this product was taken back by the feedback received but adapted quickly and reengineered her product to consider this feedback. Today we are planning a launch with a far more superior product.
This really is a part of the overall research you should do, but I wanted to list this one separately due to its level of importance. Please note again that I am not offering an exhaustive approach to research here, but rather a couple of key points that even the entrepreneur himself can do.
When running a research initiative on your competitors, it’s important to look for the right information pertaining to your product. But first, let’s look at some sources of information that will not cost you an arm and a leg.
- Go and buy products from all your competitors in various stores, consider both named brands and house brands (ie. PnP or Woolies). On-pack information will be a great way to start looking at what your competitors are doing. Look in store to see what quantities they are selling at, where they are located on shelves, which aisles they are in, how many variants are placed on the same shelf? These will all be clues that we will use later for key decision making.
- Desktop research – Browse competitors’ websites, look at google, see what is for sale at online stores and try to obtain information about the brand and their product ranges.
- Look for published articles from reputable sources.
- Search for published research papers – many products and categories already have extensive research papers created on them and can offer you immense value. They do come at a heavy price to, so make sure you shop around and look for reputable research companies before spending that kind of money.
Challenger brands (brands competing in existing categories) are slightly different to innovations (new, never seen products). When you launch a challenger brand you must allow for some level of uniqueness, if not, you end up with another ‘Me Too’ product and the chances of longevity might be dramatically impacted. When launching an innovation, you must first consider user behaviour. What are people doing right now to solve a particular problem, and would they be open to change? Please, DO NOT go and spend money on R&D if people’s behaviours are not likely to change. Also, consider legislation, perhaps it has not been done because there are restrictions, or perhaps people simply won’t care.
If you are launching a challenger brand, competitor research is easier than when you are launching an innovation. When doing research for innovation, you won’t be any direct competitors, however, you will be competing against products from other categories. Consider dishwashers competing with other dishwasher manufacturers but also competing against standard dishwashing liquids (you are competing against existing user behaviour and would need to look for ways to change that behaviour before people can adopt your product.
So back to answering our key questions, does the world need another tomato sauce? Here is an example of a product comparison chart that you might want to look at (although there is so much more information than we can explore during our research phase, a simple chart like this will help direct your thoughts):
- What price point are you going to sell at?
- Where could/should you sell your sauce?
- What packaging sizes are you going to sell?
- Is there any room for packaging innovation? What about using a recyclable material (We will explore a couple of options in part 2)
- Do I offer a healthier or tastier option?
- What is my unique selling point and/or brand promise (must be something unique, you can’t exactly go for something like “Tastes Real Good” for obvious reasons – more about this in part 3 of this series).
Target market analysis
The final part that I would like to address as part of our overall research portion of this series is to look at the target market assessment. When recently conducting market research for a client, we identified mothers of kids aged 4-12 as a key target audience. In our market research, we discovered that our market is only a subset of this audience. We were launching a healthier alternative product and found that a large portion of moms didn’t see the sugar contents of competitor products as such a great threat as we had believed.
Moms stated in our focus groups that they preferred our product, however, if we could not compete on the same price point, they are unlikely to change their buying behaviour. Our product is now targeted at moms who are willing to pay the premium and not to convert existing moms that are used to buying at a reduced rate.
We also found out that teenage girls and amateur athletes are among our top consumers.
Insights like this really help you to brand and package your product and allow you to communicate with your key target audience. Here are a couple of questions you should look to answer when looking at target market research:
- Who is likely to use my product?
- Who makes the buying decision? Kids/Mom/Dad/Singles/etc.
- How do they use my product?
- Where are they located?
- Which shops do they shop at?
- What price are they willing to pay?
- What life decisions (health, fitness, etc.) are important to them?
- What are their needs?
Once you have your market research done, it would be good to categorise your audiences into subgroups. This will make it easier to create brand messaging that speaks to each subgroup later.
I trust that the content shared here will help you and give you an indication of how important your research is, both for the product development phase, but also for the marketing phase which we will discuss more in part 3. The sooner you embark on the journey to answering these questions the more likely you are to develop a successful product launch.