In a previous article, we discussed the key management areas to focus on when entering a new market. Now, we will talk about the important aspects of introducing a new product:
– The Product
– Market Strategy
– Customers
– Financing
I will discuss the key questions that should be answered within each of these areas.
The First Area: The Product
Some of the most important questions are:
- What is the unique feature or advantage of this product?
- Is the product protected by intellectual property, patents, or licenses?
- Are there similar products available?
- Are there alternatives – note the difference between alternatives and similar products?
- Does this product fit with your other products? Pay close attention to this question.
The Second Area: Market Strategy
Some key questions to address are:
- How will this product impact our other products?
- Will some customers buy this product instead of another product we offer?
- Will this product replace another one?
- What will be the impact of the product on our customers in terms of the number of customers and the average sale per customer?
- Will it attract a new customer segment?
- What is the expected response from competitors?
- If it’s a new market, what are the barriers to competition in entering this market?
- Who are the major players in the market and what are their market shares?
The Third Area: Customers
Some of the key questions are:
- Who are our customers?
- What is the best way to reach them?
- How can we reach them online – an important question today?
- How can we retain them, and what plans do we have for this?
The Fourth Area: Financing
Key questions to consider include:
- How will the new product be financed?
- What is the best way to utilize this financing – manufacturing, production line partnership, manufacturing contract, agency, or franchising?
- If it involves a loan, it is essential to study the profit margin and how it may be affected by changes in interest rates and other economic factors.
By answering these questions, you will have a clearer understanding of the critical elements needed to successfully introduce a new product.