6-step process for new product development and successful launch.

Certainly, every plan is tailored

to each individual client based on where you are in the process. Depending on "where you are today

and where you want to go", the outline below will give you an idea of how we would approach working

with you toward new product launch:

1. Determine “Who is your target customer?” “Everybody” is not an acceptable answer.

2. Determine, “How do I want to go to market?”

Your options include: Produce the product yourself, Sell the idea or License the product to someone

else to produce and market. There are definite tradeoffs to each approach.

3. Explore the “The Fuzzy Front End” (outlined in the May 2004 issue of Taking Aim). Regardless of

what your answer is to question 2, this thought process will help you to find the right resources to

achieve your goal.

4. Market Research Phase:

a. Research Market size and potential.

b. Interview End users, Retailers, Wholesalers and Sales Representatives as necessary for the specific

product.

5. Analysis and Development of the Marketing Plan:

a. Competitive Analysis – Review the 4 Ps currently offered by the existing players utilizing a product

matrix to find a unique position from which to create a competitive advantage for the product.

b. Review SWOT with client.

c. Utilize SMART technique to develop the written, working plan.

6. Execute the Plan and launch the product:

a. Develop collateral materials

b. Begin placement dialogue with the first step in the preferred channel.

c. Have enough dialogue with enough different entities to uncover any previously undiscovered real

objections.

d. Review and Revise Plan as necessary with the new information.

e. Repeat until Sold.

f. Explore relationship extensions with new partner.

The new product development and introduction plan is the first step in The Product Life Cycle. It is

created in phases, giving logical break points to force the decision to proceed or not based on what is

known at each phase.

In our highly competitive markets, new products are thought by many to be the key to

business growth and profitability. The problem developing successful new products is not a

shortage of ideas, but rather the expense in producing and marketing new products

without any guarantee of success. Sadly, this is a fact that is little known to individual

inventors and is a tremendous hurdle for a manufacturer. Consequently much time and

effort has been devoted to developing a systematic approach to new product development.

Individual inventors are free to go wherever their imagination and their pocket book will

take them. Existing companies, however, have learned to restrict new product

development to product ideas that are in line with the strategic direction of the company

and the needs of the marketplace they currently serve or plan to serve in the future. In

new product development there are steps that are common to most all-new product

development.

Step 1. Gather new product ideas. Ideas can come from individual inventors looking to sell

their ideas or gather a royalty on the sale of the product. Many companies encourage

individual inventors to submit ideas on their websites. Ideas can also come from within the

organization. Sometimes ideas come from a formal research effort or sometimes from

people on the factory floor. The more product ideas you have, the more options you have

and without good options to choose from, it is impossible to make a good decision.

Step 2. All new ideas need to be screened to insure that the idea supports the strategic

direction of the company. Even though an idea looks interesting, if it doesn’t support the

strategic direction of the company, it must be discarded.

Step 3. Make a business assessment of where best to spend time, money and effort in

product development. Wendell Leimbach of MLE Consulting uses a matrix for strategically

evaluating new product ideas, which I have modified slightly below:

This product matrix divides ideas into four quadrants based on ease of entry into the

market on one axis and uniqueness on the other. Ideas below the line should be discarded

unless there is some way to move them above the line. Ideas above the line should be

evaluated for intellectual property protection.

Step 3 is a decision point that frequently is the end of the decision process about which

product ideas to pursue. They stop here because efforts beyond this point become much

more expensive and until recently, there have not been many alternatives. If this is the

last step, then the likelihood of failure is extremely high. It also helps to explain why so

many people refer to the process as the “Fuzzy Front End” of product development as

there is little to help predict the success or failure of the idea at this point.

Step 4. Take the ideas and turn them into product concepts. It involves researching

customer requirements. It also involves testing the concept to determine if the concept will

meet the needs of the customer. Marketing will analyze market potential and possible price

points. This is also the step where engineering gets involved in producing concept

drawings, models and possibly even prototypes. It also involves the engineers and

accountants working together to develop estimated product costs and possibly even

tooling costs. All this is done in an effort to determine whether or not it makes economic

sense to continue to explore the development of an particular idea.

Step 4 has become more feasible with the introduction of new technologies (like 3D CAD

Modeling, Stereo lithography, Room Temperature Vulcanization, Reaction Injection Molding

and Rapid Solidification process) that allow for the rapid production of prototypes and

economical, small production runs. This step is iterative in that a prototype is produced

and put in the hands of a statistically significant number of end users. Feedback on the
product is obtained that provides an opportunity to enhance the new product and it’s

acceptance. This information is fed back to the designers of the product. New prototypes

are developed and the process is repeated until the product attains a level of statistical

success that can be projected against the target audience or the idea is dropped before

huge sums of money are spent on production tooling, inventory and expensive market

introductions.

My experience and recent research confirm that most companies spend more money

determining the cost to produce an item than they do on researching customer

acceptance. I believe this is one reason why many new products fail to achieve commercial

success. Rapid change, increasing competition, complexity, organizational stress and high

customer expectations have combined to make successful new products a key to

profitability for inventors and manufacturer alike. The pace of the market provides less

time to overcome new product failures and reestablish credibility. Speed to market is

important, but Step 4 (The Product Accelerator Process) is critical to financial success with

new products.

Six Months Ahead

Background Research: Examine your marketplace and your position in it from both inside and outside

the company. Talk to employees, editors, analysts, and key customers or prospects. Be realistic!

Five To Six Months Ahead

Outline A Marketing Communications Plan: Address where you are today (situation analysis), where

you want to go (goals and objectives), and how you will get there (marketing vehicles such as

advertising and public relations). Include budget and evaluation criteria.

Three To Four Months Ahead

Clarify Positioning: Where do you want to be positioned in the minds of your prospects? Develop a

short statement that conveys the unique benefits of your new product or service. Use your "positioning

line" on all your literature, press kits, ads, etc.

Prepare Literature: Have data sheets, brochures, and company information ready to go when you

launch.
Prepare Advertising: Plan a media schedule that targets your core market, and prepare an ad

campaign for the recommended media. Note: Magazines generally need advertising materials two to

three months ahead of the publication date, so think ahead.

Two To Three Months Ahead

Consider A Press Tour: If your product is newsworthy, talking with editors can result in
feature articles, which can enhance the product's credibility.
You may want your press release sent out by one of the several companies that distributes
such information. Your public relations or marketing firm can help you select one. It will cost
$150 to $400, depending on how widely your release is distributed. Plan distribution for the
day of your launch.

If people outside your business would not be likely to view the product as new and important,
stick with press releases to editors. Plan to distribute the releases two to three weeks before
your product's launch day.

Throughout Your Program

Plan for Consistency: Success in marketing communications depends on consistency over time. Plan to

pound away on your target market, and chances are your product launch will succeed.

>11 Product Launch Do's.?/P>

1. Ensure a launch process is in place. A successful launch is a process, not an event. Too many

companies focus all their energies on the announcement and first trade show and then wonder six

months later why they missed their sales goals or disappointed early customers with lack of support. A

successful launch process must include buy-in from all levels of your organization to synchronize and

integrate efforts. A Launch Team should be established. A clearly written, comprehensive Launch Action

Plan should then spell out individual responsibilities and overall objectives, strategy, time-frames and

requirements. Knowledge sharing systems should then be devised to share best practices and adjust

actions as needed.

2. Set objectives and success measurements up front. Know where you're going and how to

recognize if you've gotten there. Gather and analyze market intelligence, assess your current situation

and then determine what you want your launch to accomplish within the market, company and with

prospects, analysts and editors. Now gain consensus so all stakeholders are invested in the plan.
3. Develop a formal and comprehensive integrated Product Launch Plan. This plan should

guarantee sales integration, involve all critical organizations, establish accountability with actions and

timelines and ensure alignment, consensus and success. The Product Launch Plan should address the

following 12 critical components:

 Structure and organize resources for success

 Define launch objectives

 Gather intelligence

 Develop launch strategy, action plan, budget and timeline

 Craft a supportive PR strategy and plan

 Effectively position the product

 Ensure product readiness

 Guarantee sales channel readiness

 Create critical marketing and sales tools

 Develop new product programs

 Track, monitor and report on execution

 Measure performance

4. Monitor and track execution. This works far better when you assign a launch team, enlist

management involvement and support and consistently establish ways to easily track progress.

Then regularly and frequently communicate results with the group.

5. Ensure ingredients for success. You can't succeed without the proper tools. A professional

and effective product launch normally requires a good six months to handle all the unexpected

issues, delays and snafus that will arise. You also need an adequate budget, resources, systems

and most importantly, healthy relationships with all team members, sales channels, analysts and

editors. Repair any broken relationships before product launch because these types of issues are

the greatest time-eaters.

6. Invest upfront in the right positioning. Do whatever it takes to identify your prospects,

analysts and media before engaging in a launch. Make sure your beta version of the product

works and goes to the right reviewers. Do your homework and establish the exact message you

want to convey to the market. Remember, this message will be the banner your new product

carries to the world. Invest in the right advertising, collateral materials and sales tools.

7. Have a winning public relations strategy and plan. You must capture attention by educating

pundits, opinion leaders and editors. These are the people who will be carrying your flag. Once you've

won these people over, you gain credibility and acceptance from the marketplace. This makes the

selling process far easier, maximizing the chances of hitting your goals.
8. Ensure channels can effectively sell right out of the blocks. Your sales channels are equally as

important as analysts and editors. It's critically important to continually educate the sales force about

what the product does, not only in terms of features and functions, but in terms of its real business value

to customers. You should treat the sales force just as attentively as you would prospects and

customers.

9. Involve the company. Touch everyone within your organization with your zeal for the new product.

Educate them, communicate the plans, goals and progress, use the launch as a way to build morale

and unify the team through a common cause. Let everyone share the glory of successes along the way.

10. Disseminate best practices. Identify what's working and what isn't and share this information

throughout your organization. Be flexible, be nimble, be willing to adjust your plan as results are

tabulated. Remember that a launch is a process, not an event.

11. Accelerate the launch. There are a million excuses for why the launch can't occur in the

established time frame. Don't succumb to them. Track and monitor the plan everyday. Anticipate

bottlenecks and have elimination solutions ready to implement. Hold all contributors accountable. And

finally, gain the support of top management so they will eagerly use their influence when complex issues

threaten to slow the process.

- Is my business already on a solid foundation?

If your systems, processes and personnel are not ready, efforts to expand will overload

your capabilities and set you up for failure. Before launching a new product or service,

make sure you are ready to handle the orders, deliver the product or service and collect

your money in a systematic and timely fashion.

Also, make sure you have one or more strong indications that there is a market for what

you plan to offer. Strong past sales of something similar or a part of what you are

expanding are usually a positive sign. Be careful you don't fall in love with an idea and

disregard the warning signs that the market won't support it.

2 - What is the size of the market?

Do a competitive analysis (see checklist). How is your new product or service filling a

market need? What will be your position within this market? Who is your target market

and how will you reach them? You want to reach the conclusion that your efforts have the

potential to pay off. If you are offering the same product to a new or broader market the

same principles apply.

3 - How should I price it?

Pricing is an important consideration. When you do your competitive analysis you'll learn

how similar products or services are priced. You want your price to be attractive enough to

sway people to buy; unless you're pricing a luxury product and the higher the price, the

higher the perceived value. The option for prospects to keep their money and not buy from

anyone is always one of your competitors.

I find it's better to start on the low side to make sure the perceived value is greater than

the cost. You can raise the price once demand has been established.

4 -How much revenue can I expect to generate within a specified time period

(usually one year)

This is an important question and is dependent upon the actions you take to generate

sales. You'll need to think through your Marketing Plan in order to come up with a realistic

projection of how many widgets you can sell at $XX within a specified time period. Analyze

your sales history to help you know what has worked in the past. If you have a long lead

time for sales, that should be taken into consideration. This may mean hefty upfront

expenses with corresponding delayed revenue income. To be conservative make your

revenue projections and then knock off 30%.

5 - What will it take to realize this additional revenue and profit?

What additional resources will you need when launching a new product or service? Do you

need to hire more people, buy more supplies or inventory, etc.? That additional cost must

be taken into the equation. These may be in the form of fixed or variable costs.

Consider what the competition is doing and what market insights and trends you can

utilize that will generate sales. Select one or two actions for your initial campaign and test

on a small scale before committing major dollars.

At best, making a financial revenue and expense projection is always a guesstimate.

Gathering and analyzing pertinent information is the key to accuracy.

6 - Where is the break even point and what is the potential profit?

The formula to determine how many you have to sell to start making a profit is Fixed Costs

divided by (Revenue per unit minus Variable costs per unit). A quick and simple

explanation of this can be viewed in the article, "Breakeven Analysis" . For some products

or services the upfront investment is such that the breakeven doesn't happen for more
than a year. If that is your situation, you'll definitely want to know how you're going to

capitalize such a project.

7 - Is this new direction in line with my overall Business Vision and Long Term

Goals?

This is a good time to determine if your new offering will take you closer to (or further

from) where you want your business to be going. One of the real values of having a clear

Vision and Goals is to help you make this type of decision for every opportunity that

presents itself. Think long and hard before starting something new that does not have an

obvious fit.

1. Provide a benefit. A new business stands a greater chance at success if it is

responding to a need of a consumer. Your potential customers will buy your products or
service if they see that it provides some benefits to them. You must be able to respond to
their "what is it for me" question.

As a new business owner, your main task is to understand the difference between the
features of your business and the benefits it provides. For example, if you are in the business
of selling baby gift boxes, the feature and benefits are:

Feature: Baby toys, books, CDs and videos not found in department stores Benefit: The
customer will be able to conveniently find in one location the baby gift items she or he wants.

Remember, customers buy on the basis of the benefits, and not the features of your products.
This is what you are going to use as your main selling proposition, or what you will highlight to
convince people to buy your products and services. By understanding the business and its
benefit to consumers, entrepreneurs can differentiate their business and create niches in the
market where they can enter and survive long enough to build

2. Determine the fit with your market. Before you can start marketing your new
business, you first need to determine your target market. That's right: not everyone is your
customer. Some people erroneously think that they should sell to everybody, and that
targeting will limit the scope of their pool of potential customers. Wrong! The purpose of
defining your market is to make your life easier and increase the effectiveness of your
promotional activities. You can't strike anywhere: you need to focus your energy and money.

To identify your market, you need to look at your market data and personality attributes of
those whom you think would most likely buy your products. Aside from the demographics of
your potential customers (age, gender, income level, geographic location, etc.), you also need
to determine lifestyle factors. Are there any special interest activities that they belong to? Are
there any social factors and cultural involvement that govern your customers? How do you
think your market will use your products or services?

3. Right timing is everything. Some new businesses are way ahead of their times.
You may have a brilliant idea, but if the market is not ready for your products, the venture will
fall by the wayside.

If you have a product that is so new in the market, be prepared to take on the cost of
informing the buyers. Since they are not familiar with your products, show them how it will
benefit their lives and demonstrate how they can use it. Infomercials, while costly, are very
good vehicles for very new products.

4. Be ready to support your business . One business reality is that you need money
to earn more money. You need resources to allow you to buy equipment, supplies, procure or
manufacture products, package your products well and market it. Will your existing capital
allow you to buy all the assets that you need in your business? How are you going to finance
your inventory? If you are starting an online business, do you have the resources to create
your site and pay for its upkeep? If your business does not show a profit within the year, do
you have the money to support yourself?

When starting a new business, you need to consider three major expenses and plan for them
accordingly: your living expenses, direct costs and overhead. Living expenses is the "salary"
you must produce to support yourself and your family. Direct costs include supplies,
materials, and others that you need to produce your product or deliver your service. Overhead
is the cost of running a business, and it covers marketing, utilities, office furniture and
equipment.

Sure, you can start a business even with little cash, but you need to be extremely creative in
stretching your money and be prepared to compromise the growth of your business. You will
have no choice except to build your business gradually.

However, having money is not enough to assure success. The dot-com woes, especially,
showed that you can burn millions and millions of dollars only to end up a failure. Digital
Convergence, for example, got $250 million of funding for investors to distribute Cue Cats
barcode readers for free yet laid-off most of their staffs after their business model showed to
be unsustainable. The key is to use whatever money you have-- smartly.
5. Develop a blueprint for success. You cannot go into a business unprepared. It is
important to have a plan. Think of going to business like going to war: you need to develop
strategies to help you overcome your enemies. Without thinking through what you want to
achieve and how to get there, you are a sitting duck waiting to be clobbered.

Starting a new business entails a thorough and objective analysis of both your personal
abilities and the business requirements. You need to have a clear strategy for marketing and
the production aspects of your business. If you are a retail store, you need to have a plan in
terms of procurement and sourcing. For all the excitement of a new business, you need to
know where and how you will get the funds to finance your business. Do you have the
available resources to make this business a success? And a million other details.

A business plan is essential. Even if you do not want to write it all down (especially if you do
not have investors), the process of preparing a business plan allows you to think through of
every aspect of your business. It makes you think about the viability of your business and
helps you avoid costly mistakes. When starting a business, you base your projected
performance on a set of assumptions. If you have a plan, you will be able to test your
planning assumptions and create fall-back measures in the event that real life proves to be
vastly different from your initial visions.

If you think through your business well, you can discover problem areas early on and initiate
efforts to correct the problem. Remember, the business owner with a realistic plan has the
best chances for success.

6. Market, market, market. In this world dominated by hype, you must be prepared to
publicize the business or its chance for success will be slim. Unless you are a nationally
known name with built-in clientele or your business is located in a prime location, you need to
promote customer awareness for your business. If you're on the Web, you cannot expect to
just sit in a corner and expect people to stumble on your site.

Your marketing plan should revolve around three goals. The first is to inform customers what
you have. You can do this by letting customers know what you have for sale, either through
press releases for possible publication in print and TV media, brochures for your customers
and leaflets distributed in your neighborhood.

The second goal is to persuade potential customers to do what you want them to do - buy
from you. If you're in e-business, you do this by writing a very good sales copy on your site
including testimonials from satisfied clients. If you have sales representatives, they could do
the persuading in your behalf.
The third function of marketing your business is to remind existing customers to come and
buy again. If you are a Web marketer, you do this by sending a regular product updates,
special offers and promos to customers' emails. As a smart marketer, you know that you need
to hold on to your existing customer base as it is much harder (and more expensive) to get a
new customer than to sell to someone who already knows your product and the quality of
your customer service.