IS YOUR PRODUCT READY FOR THE SHELF?
A Product in the Early Stages of Development Can Make Even the Best Marketing Plan a Risky Proposition.
By James F. Riordan
Before developing your marketing plan, it helps to do an honest evaluation of your product's stage of development. New products are normally developed from two major inputs:
1. Research which has accidentally, or as a by-product, provided a new technology or product that CREATES A NEW NEED or desire.2. Research which was undertaken specifically to come up with a product to solve a problem, fill a need or fulfill a desire WHICH ALREADY EXISTS.
For the purpose of product evaluation, "stage of development" refers to where the product is on its path to the marketplace. Having a working prototype does not guarantee a product's success, but it sure does reduce the risk of failure. When focused on "stage of development," winning products are those that are packaged and ready to be put on the shelf.
The risk of taking a new product to market is greatly increased if the product is in the early stages of development. The chance of failure decreases as a product advances through the various stages of development. To the product evaluator, the risk is inversely proportional to the present value of the product or technology. If a lot of research and development must be done to get the product to a point where it is probably viable, the risk is high and the present value is low.
Generally, a product in the early stages of development is not worth nearly as much as a product which is well along. The asking price for a new product which is only in prototype stage is so disproportionate to the asking price of a fully-tooled product which is ready to be marketed, that many product developers would be better off borrowing the money to "tool" the product and then sell it. It's also possible for a smart investor in some cases, to buy a product inexpensively at prototype stage, pay for the tooling, and then resell the product to a third party and make an excellent return on investment.
A product which has languished in early development stages for a long time without progressing is generally frowned on by evaluators, because the evaluator wonders whether the developer is serious about pursuing the product or technology and whether the idea itself is actually worth pursuing. A common question is "If you think it's such a great idea, how come you've been sitting on it for so long without doing anything with it?" A good suggestion for the product developer is--Once you think of an idea, stay after it without interruption until you have either proven it to be valuable or find that it's not worth pursuing.
The longer a product or technology has been in early stages of development without progress, the less viable the project appears.
The more complex a product is, the less the product is worth in its early stage of development, because complex products require much more time and effort to perfect and bring to market than simple ones do. Also, the chances are good that if the original product being evaluated is complex, any "follow through" products or line extensions are also likely to be of a complex nature and therefore will also be time-consuming and costly to bring to market.
If a product will require an extensive testing period, which is generally considered to be a negative factor, there can be one positive factor. It's quite possible the product may generate "goodwill" in the eyes of the users or media people who have seen the product in its early stages. The more goodwill which has been generated, the more the product is worth. A good example would be a prescription drug or a piece of medical equipment that is not through with its mandated testing period, and is therefore unavailable to the general public, but has worked so well that everyone is becoming excited about its possibilities.
The above article was taken from James F. Riordan's classic book, HOW TO EVALUATE THE POTENTIAL FOR SUCCESS OF A NEW PRODUCT OR TECHNOLOGY. Riordan's highly-acclaimed, 36-point system is a valuable tool for inventors, product evaluators or anyone interested in the invention process. Each section is followed by a comprehensive questionnaire that can be used to evaluate your product.
The highly-recommended book can be ordered through the Dream Merchant, 2309 Torrance Blvd., Suite 104, Torrance, CA 90501. The phone number is (310) 328-1925.
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