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Product Development Checklist
Part 1
by Joe Gracia

Stands to reason, you've got to have a product or a service to sell to have a successful business. Selecting the right product or service is crucial to your company's survival.

Here are the first five of ten steps to help you choose and develop a successful product:

1. Select prospects first
Most people select a product first and then go searching for someone to buy it. That approach is backwards, incredibly expensive and very often ends in failure.

It is much easier to succeed by first identifying a group of targeted prospects, finding out exactly what they want, and then giving it to them.

Start by identifying target groups of consumers for practice. It might help to complete the following phrases. Think of as many as you can.

"People who love . . ."       or       "People who would love to . . ."

"People who hate . . ."       or       "People who would hate to . . ."

For example:

People who love chocolate.
People who love their dogs (or cats).
People who love to travel.

People who would love to lose weight.
People who would love to start a business.
People who would love to learn a new language.

People who hate having headaches.
People who hate having a disorganized home.
People who hate working at their jobs.

People who would hate to retire poor.
People who would hate to be late for appointments.
People who would hate to lose their possessions to burglars.

With a little practice you will begin to see that every product or service that people buy is because they want to acquire more of what they love, or they want to eliminate what they hate.

Every product or service falls into one of these two categories. Yours will too.

2. Identify a problem
Once you have selected a target group of prospects, it's time to identify their problem. Every product is the solution to a problem, not necessarily a major problem, but a problem nevertheless. If there wasn't a problem to begin with, the product would not have been developed.

Think about the light bulb. The primary problem was darkness. The secondary problem was messy, smelly and dangerous gas or oil lamps. The electric light bulb was an excellent solution to all of those problems.
  • Restaurants solve the problem of hunger.
  • Movie theaters solve the problem of boredom.
  • Light bulbs solve the problem of darkness.
  • Toothpaste solves the problem of tooth decay.
  • An alarm clock solves the problem of getting up late.
  • Books solve the problem of lack of information or lack of entertainment.
  • Computers solve many problems from communicating, to writing, to calculating, etc.
3. Develop a solution
Until you identify a specific problem that your particular prospects have and want to solve, you can't develop a solution. That's why you must start with your prospects' problems first before you jump into developing products.

Once you have pinpointed your prospects' problem, it's a lot easier to think of what kinds of products or services would help to solve that problem.

If their problem is disorganization, then you may be able to develop an organizing service or an organizing product as a solution to help them overcome this particular problem.

If their problem is that they love to travel, but have a difficult time finding reasonably priced travel packages, perhaps your solution could be to find those types of packages for them as a travel consultant.

Your solution doesn't have to be earth shattering, nor does it have to be totally unique.

There is usually room for more than one solution provider in most any market. In our city there are over 1,000 dentists providing the solution of dental care. There are also hundreds of restaurants, insurance agents and hair salons.

In fact, if your product or service is so unique that people are unfamiliar with it, you may have a very difficult time educating your marketplace about your product or service. This will make your marketing efforts very expensive and risky.

It's often much wiser and more profitable to offer a product or service that is already being sold successfully to a large target market, rather than trying to be a pioneer. The early pioneers had a high mortality rate.

When people try to create totally unique products or services, the failure rate is very high -- from 80 - 90%.

If you stick with already established products and services -- like the ones you see people buying like crazy in your target market -- you'll have a much easier road to success.

4. Find out if they want it
Now that you've selected a target group of prospects who have an identifiable problem and you've started developing a solution to that problem, it's time to test the demand for your proposed solution.

If it turns out that your target prospects aren't really interested in your solution, or that there just aren't enough of them to make it profitable, then it's better to find that out now, rather than later.

Here are a few ways you can test the demand for your new product or service idea.
  • Offer free samples: Samples are not just for candy and food vendors. An author can offer a free chapter from the book he or she is about to write. A massage therapist or self-defense instructor can offer one free session. This technique can be applied to any product or service.
  • Take a survey: Ask people for their opinions about your proposed product or service. Ask for their input.
  • Offer free information: Put together a short info or tips sheet related to your new product or service and offer it free of charge to potential customers.
  • Offer a special price: Offer a special low, low price for a beta model. If they're not interested in a low priced version, chances are they aren't going to be interested in the higher priced one either.
  • Offer a free demonstration: If your product lends itself to demonstration then by all means, demonstrate it for free to potential customers. You'll get immediate feedback which will be invaluable.
  • Hold a contest: Have your prospects sign up to win your product or a sample of your service. If very few people sign up, it could very well be that the interest in the product or service is low.
  • Try to sell it face-to-face: Face-to-face selling is the most powerful form of selling. Present your product or service face to face to your prospects and get their feedback and objections. They can tell you what they like and what they don't like about your idea.

    Remember, I said try to SELL it face-to-face. I didn't say ask for their opinion, we covered that in the 'Take a Survey' tip. In this tip we're talking about asking people to take out their wallet and buy it. There is no more viable testing method than this. If you can't get people to buy it face-to-face, chances are you won't be able to sell it via other less effective means, like advertising and promotion.
The bottom line is, it's better to test the real demand for your new product or service before you spend a lot of money. Do everything you can to get real feedback from your potential market.

Be wary of biased opinions from family and friends-- quite often they will tell you what you want to hear, not the truth. You need unbiased action, like requests for information or a free sample, or better yet, a purchase, etc.

Until you have established a clear, proven demand for your product or service, you won't know whether you have a chance for success. This is a vital part of your research phase. Don't skip it.

5. Establish your marketing strategy and systems
Once you have tested your demand and have proven that there are sufficient numbers of people who want your solution, it's time to begin developing your marketing systems. Which strategy will you use?
  1. Awareness/Image: This strategy is designed to just get your name out into your marketplace over and over again, so that when people think of your type of product or service they think immediately of you. Coca Cola, IBM, Disney and all of the familiar big company names use this strategy.

    Because of its expense, it's not a very practical strategy for small businesses. Unless you have millions to spend, forget it.

  2. One-Step: This strategy presents the product name, a few features and price. Also included are the company name, address and phone number. The target prospects can now call for more information, or buy the product by mailing in payment, calling in their order, or stopping by the business location to purchase.

    Although this strategy produces very little results, it is the most common strategy used by small businesses.

  3. Two-Step: This strategy is based on the premise that people must get to know, like and trust a business before they feel comfortable enough to do business with it.

    The first step is designed to attract large numbers of people who have a genuine interest in the solution the product or service provides.

    The second step is designed to follow up with these prospects over a period of time. These follow ups provide the prospects with the information they need to bring them to a buying decision. It is also designed to build awareness and trust by following up multiple times.

    This strategy is the most cost-effective and profitable strategy for small businesses, but most small businesses are unaware of the strategy and its power to produce sales.
Click Here for Part 2

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