Seven Considerations to Gauge if Your Product Is Market Worthy

How do you get your product from concept to commercialization successfully, intelligently, efficiently, and fast? Developing new products is risky business. The stakes can be high.

With a successful product launch your company could see a spike in brand recognition, an increase in profitability, company growth—or— your product could fail to get off the ground, losing money with no return on investment (ROI).

It takes an immense amount of teamwork, research, planning, and a sprinkle of good luck. There is a caveat: Most industries have fresh ideas and technology solutions—anyone’s idea within the company could be the next best thing for consumers or the next big disruptive innovation.

The competition can be fierce for companies jockeying to get their product to market first. According to Harvard Business School, over 30,000 new products are launched into the market every year, out of which approximately 95% fail to meet their objective.1 Many new products stall or fail for several reasons such as inadequate market research, poor product design or execution, lack of resources or funding, or not meeting customer needs or expectations.

This blog offers a quick snapshot of the thinking and research behind getting your products to market.

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How does an idea transform into a marketable product?

A product begins with an idea. Product development is often the incubator—the place where ideas come to life or head back to the drawing board. Evaluating and understanding new product criteria is vital to getting your product to market quickly.

Product developers and product engineers need to understand the build requirements, the design concept, and what the product looks like from a business and industry lens.

Product discovery phase is critical—the team must understand the customer’s problems and needs. This is also where the important questions get resolved, and where the benefits and features start to take shape.
Whether you’re developing complex medical device products, electronic vehicle technology, or consumer electronics, it takes a great deal of collaboration, efficient processes, and effective team management to bring products to fruition.

Where do product ideas originate?

Many product ideas come from customer problems and are typically the bedrock of great products. To get your products off the drawing board and into production requires having the right people, skills, and industry knowledge. The core product development team is typically comprised of members from six functions that include:

  1. Innovation
  2. Product management
  3. Project management
  4. Product marketing
  5. Engineering
  6. Operations

The exact makeup and organization of your product development team will vary based on your company’s industry, maturity of the company, and product lines.

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Seven Important Questions to Ask When Determining if Your Product Is Market Worthy:

  1. What Problems Does Your Product Solve?
    Is there a need for the product? Does the product solve a problem or meet a need that consumers have? Spend time to identify if the problem is worth solving before building any meaningful solutions. Conducting in-depth research will pay off.
  2. Is It Something People Will Buy?
    What’s your market size or your total available market (TAM)? Understand how big the potential is for customers, for the product or service, and the possible revenue that could be generated based on the customer population size.
  3. Will It Push the World Forward?
    Is your product a game-changer? Does it have the potential to make customers’ lives easier or better—you’re not just providing an upgrade? Does the product change behavior, the way customers perform a task (perhaps faster), or is it a creative solution to a problem?
  4. Pricing—What to Charge?
    What do you charge for your new product? How do you maintain a consistent customer base regardless of what happens in the economy? Can your product be manufactured and sold at a profit? Compare your product to similar ones in the market to determine an average price range. Focus on long-term business profit, the total amount of money customers are anticipated to spend on your products over the course of an average business relationship—known as the customer lifetime value (CLV). This metric might help you understand whether your customers are genuinely interested in your product or are coming to you for a deal.
  5. Does the Company Have the Brand Loyalty to Influence the Market?
    Once established, brand loyalty is both durable and strong even though consumer preferences change constantly. A brand loyal customer might continue to buy your brand even if it’s no longer an affordable or convenient option. One way to understand your brand loyalty is to track and measure your repeat customers and look at metrics like customer churn, and the average total lifetime value of a customer.
  6. What Does the Competitive Landscape Look Like?
    Is your product different enough from the competition to be successful? What’s the unique selling proposition (USP)? Analyze your competitors: Instead of focusing on their products, focus on their marketing messages, what ads are they running and where. This can help you define your USP. Knowing how your competitors distinguish themselves and how they want to be perceived in the market can help you better understand where your product fits.
  7. Can It Be Sustainable?
    Understand what makes a product sustainable. Sustainability is no longer a linear problem. Companies are now using circular economies to create products that recycle, regenerate, and offer a lower carbon footprint. Design your product to reduce your environmental impact. Make supply chains more transparent, establish traceability, and use the least number of resources to manufacture your product.

Essential Elements for Successful Product Launch: Teamwork, Market Research, and Strategic Insight

A combination of dedicated teamwork, in-depth market research, and a solid understanding of consumer wants is needed for a product to be launched successfully. Considering that more than 95% of new items don’t live up to consumer expectations, it’s critical to evaluate market worthiness using precise standards and phases of strategic development.

To turn an idea into a commercially successful product, you need strong teamwork, a well-trained product development team, and a comprehensive grasp of the product’s potential market impact. To ensure that a product can stand out and flourish in a crowded marketplace, it is also essential to grasp the competitive environment, the product’s unique selling factors, and the possible consumer base.

Learn more about Arena PLM and how it can improve your new product development processes and help meet your next product launch.

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