How to Compete in the Market With a New Product Line
Introducing a new product line presents an opportunity for small businesses to increase sales and profit by selling more to existing customers, winning new customers, or entering new market sectors, but the high rate of new product failures means that success is not guaranteed, however good your product. Consultants Booz & Company found that about 70 percent of the resources spent on new launches are allocated to products that are not successful in the market. Careful planning and research are essential to your ability to compete effectively in the market with your new product.
Your new product must meet genuine customer needs that you or your competitors do not currently satisfy. Look at product reviews on social media sites to see what potential customers are saying about products in the sectors where you compete. Review published market research to identify changing trends in customer needs. Assess your competitors’ product ranges to identify gaps that your new product can fill. Understanding customer needs enables you to focus your marketing program on communicating benefits that are relevant and important to your target audience.
Selecting the right target market ensures that you focus resources on marketing priorities. If your new line is aimed at existing customers, use established communication channels such as your sales force, customer newsletters, telesales, or email to announce the new product. If you are targeting new prospects or new market sectors, you will have to develop a different communication strategy to raise awareness of your company, as well as of your new product. Develop advertising or public relations campaigns to create awareness and generate leads for follow-up.
Training and motivating your sales force, retailers and distributors is key to a successful launch. Sales teams must understand the features and customer benefits of the new product so that they can market it effectively. Provide product guides and develop incentive programs to motivate teams to generate sales.
Running a test market before you launch the new product gives you the opportunity to assess all aspects of your launch plan and minimize the risk of failure. Choose a region with demographic characteristics similar to your target market. Test and measure launch elements, such as price, retail performance, and consumer response to advertising, packaging, and sales promotion.
To compete successfully with a new product line, you must provide customers with the right level of support from the outset. Train your customer service and technical support teams on the new product, and ensure that you have a logistics infrastructure in place to provide installation, user training and maintenance, if applicable.