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B2B News from eye4products.comToday's
article by Ilan Mochari of Inc. Magazine (October 1, 1999)
Nope. According to Los Angeles entrepreneur Larry Koenig, the first thing you do is figure out how to sell it. "A lot of people don't evaluate whether or not their product can sell," says Koenig, whose company, Concept 2 Consumer, specializes in helping people bring products to market. "They believe it can sell just because they've created it."
There is a way to be sure. Koenig recommends that you conduct two surveys in your target market. The first is to test your concept, that is, to see whether people would buy such a thing. The survey should ask no more than 10 questions, just enough to evaluate your product in broad terms. How much are people willing to pay for your product? What features do they like or dislike? Include detailed renderings and descriptions of your product. Ask for checkbox responses or one word answers, and offer a token reward for responding. "And you've gotta go to people who don't know you," insists Koenig.
A successful concept testing should be followed by a second survey. It should go out once you have a prototype of your product and should ask the same questions as the first. Koenig says a product is worth taking to market only if people will buy it for a minimum of four times the manufacturing cost. Otherwise, it won't be profitable enough.
One inventor who is testing out Koenig's formula is Jerry Drane. Four years ago Drane invented the "Underella" a hands-free umbrella that straps to your back. It seemed destined to be a hit in the $350 million plus rain-gear market. But Drane squandered $13,000 on marketing, creating prototypes, and attending small business seminars, and he didn't make a single sale. "I hadn't done a very good marketing survey, to find a price that people were willing to pay," says Drane.
Koenig encouraged Drane to conduct a test-market survey, complete with color renderings of the Underella. The first thing Drane found out was that he had to sell the product for no more than $17 retail. That lesson prompted him to go outside the United States to find a cheaper manufacturer. Now he's poised to launch the Underella with confidence. "I know this is ready to be launched," he says. "This is gonna create a whole new market."
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