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Damon Bonser is a Design Council Spark mentor with over 10 years' experience as an entrepreneur and investor. Here he discusses the five key factors required in taking a product from the ideas stage to the market.
The UK has long been known as a centre of excellence for invention, design and engineering, as well being one of the most popular start-up locations for new creative businesses. So, if you have a great product idea, how can you be sure that it has the highest possible chance of success in a crowded and competitive market?
Here are five essential steps that should be taken when attempting to move your product concept out of the ideas shed and launching into the marketplace:
1. Know your competitors
Many inventors, product designers and budding entrepreneurs are so passionate about their idea that they consciously, or subconsciously, avoid checking out potential competition in the marketplace. It can’t be overstated how important this step is. Without carrying out a proper competitor analysis, the chances of failing at the first point of contact with your customer is greatly increased.
Go offline and do some “real” world market research.
An initial competitor analysis can be carried out very cheaply and should at the very least consist of internet based searches for similar products. Keep track of your search terms, and the websites where you found similar products – these may become your future early adopters. Then try to find out the manufacturer or distributor of each competitor product. Make a note of the recommended retail prices if they are retailed products, and see if any discounts are being offered – this may indicate that the competitor products have not been such a success.
It is also advisable to go offline and do some “real” world market research. Walk the shops and tradeshows, take photos (if permitted), make notes of manufacturers’ details from packaging, see how the products are displayed in store and whether they are given prominent positions or not. This will help build a picture of your competitive set and what brands you will be fighting against when selling your products.
2. Profile your customers
When designing a product it is easy to get caught up in your own passion for the idea and become disconnected from who is ultimately going to buy the product. Your understanding of your customer will help to clarify your design parameters, what features are adding value and which are just adding costs.
Again, it is possible to complete this step without incurring too many costs. Much will come down to how much time you have to spend analysing your marketplace. Ideally get out and take photos of people and shoppers if your product is for retailers. If your product is for non retail corporations then go onto LinkedIn, find some buyers and use those images to build your customer profile.
Then surround each profile with call outs that highlight what makes these people tick, what problems they may have that you can solve, what jobs they do, how they spend their free time. Anything that helps you get closer to understanding your customer is useful. And it’s great to think out of the box as well. You are ultimately trying to make an abstract concept - your customer - into a real person with wants and needs.
3. Don't let costs drive your price
The determining factor of price is to be found within the marketplace.
It is easy to fall into the trap of costing up your product first, then setting the sales price. In some industries this may work, if your costs are competitive and the need for your product is great. However, the majority of the time, costs are not a determining factor of the price your product needs to sell for.
The determining factor of price is to be found within the marketplace. How much are your customers willing to pay? What are similar products selling for? What gaps in the market exist for you to sell in at a unique price? It is just as important to avoid over pricing your product, as it is to under price it. So spend as much time as you can immersing yourself in your market: talk to consumers, talk to buyers, plot out simple pricing matrixes to summarise the price points in your market and look for the gaps that you can exploit.
4. Do your legal due diligence
Legal due diligence can refer to intellectual property (IP) rights as well as product compliance and safety testing. It is possible to carry out a certain amount of due diligence yourself, but at some point you will need to spend some money to make sure your product does not infringe any IP, is itself protected, and can be legally sold in your target market.
So what can you do initially before engaging the services of lawyers and testing specialists? In the early stages of product development you can carry out a patent search to check that you are not in danger of infringing upon any existing IP. You should also check that your brand and trademarks are unique to yourself, and not similar to others in the market. This can be all be carried out using public databases such as www.ipo.gov.uk.
You should undertake some due diligence on the safety testing and other legal compliance that your product may need to adhere to. Most third party testing houses will give you free advice and a list of legal testing requirements that you will need to pass in order to launch your product.
5. Test your proposition
The final essential step is to test your proposition.
If you have analysed and fully understood your market, competitors, customers, the pricing points and made sure that your product is legally cleared for launch, then the final essential step is to test your proposition. This means talking to consumers and buyers, showing them prototypes and proof of concept models, discussing with them whether they would want to actually spend money on your product.
How much are they willing to pay for it and how many do they think they can sell? If you are talking to consumers, then get feedback on the design, the features and functionality, as well as their appetite for different price points.
This last step is all about building up a picture of how big the demand is going to be for your product. All products are capable of generating at least a few orders, but what level of demand do you need to see to know that you can achieve sufficient sales to support your personal objectives? It’s not much fun spending all your time developing a product that barely sells enough to cover your monthly food bills!
Find out more and apply to Design Council Spark: The Home Innovation Challenge.Apply