Prepare for the Market
Once a decision has been made to pursue a new idea, most companies focus on the more technical design and engineering tasks of transforming the idea into a product or process. The equally important task of developing a strategy for bringing the product to market, however, is too often overlooked.
Successful commercialization of new products requires strict attention to multiple lines of thinking—one focused on technical development; one on market development; and one on business development. In the beginning, it is important to make sure of the new product's market potential. Especially for a smaller company with limited resources, there are few things worse than developing a new product or process, only to find later that there is no market for it.
The process of creating a marketing strategy starts with an honest, objective market assessment. A good market assessment will first and foremost help the company understand how its new product is likely to be received by the marketplace and the level of sales that might be possible. When done well, however, a good assessment will also provide a good understanding of:
- the overall market environment in which the product will operate;
- the product's competitive environment, including competing products and/or other factors that could reduce sales of the new product;
- competitor pricing and marketing strategies
- market-entry barriers, which might include competing products, government regulations, or special testing requirements
- market-entry opportunities, which might include a chance to partner with an established firm or target a special market segment
A good market assessment should also help you select an appropriate commercialization strategy. Commercialization strategies vary widely. For example, maybe you have a great new idea, but lack the resources needed to bring a product onto the market. In this case, licensing the technology to a larger firm with the resources to manufacture and distribute might make sense. Alternately, if you can produce the new product, it could make sense to arrange a distribution and branding deal with a known distributor, while retaining control over manufacturing.
The characteristics of your firm will influence many of these considerations. A solo inventor is likely to be more successful by bringing on partners through a licensing deal. Larger firms with an existing sales force and distribution networks will obviously have more capability to act without partners.
Experience shows that too many firms—small, medium, and large—overlook the importance of commercialization planning. To the engineers, design and function are often the most exciting aspects of new product development. But failing to plan ahead for the marketing and other business issues can kill an otherwise winning product.
Paula Serber has written an excellent article on the Entrepreneur's Network website titled "Invention Development 101" that summarizes many of the hurdles that inventors face on the road to marketing their inventions.