Many times I get asked whether I think a new product will make it or not. While no one can provide a ‘sure’ answer to that question, it might help for the individuals contemplating a product launch to first try to answer these:
1. Points of Differentiation.
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Why should the product exist in the first place?
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What will make the consumers try it?
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What will make consumers want to buy it again?
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Are you confident that retailers will give it shelf space? Why?
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Do you also have confidence the distributor will stock it?
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Will the district sales reps talk about it?
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What existing products are similar, and what would distinguish your product from these competitors?
2. Where will it be sold?
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Through what channels will it be made available?
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Will it typically be sold in an area of the store where consumers will see it?
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How will the consumer know it's there?
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How will it be differentiated from other products on the shelf?
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What is the go-to-market strategy?
3. Will the economics support 1 & 2?
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What’s the gross margin (net of freight)?
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What would be the selling price versus that of its closest competitor (per unit / per oz.)?
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Has a channel cost analysis helped determine this product’s economic viability, and if so, what velocity was used in the analysis?
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Would the margin after freight be at least 50%?
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Will the product move at freight rates under 15% for start-up?
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Do you have the money to fund two cases per store free on roll-out?
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Can you survive economically if receivables extend to 60 days?
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Do you have the money to effectively tell the product story after roll-out?
4. Does the product have a soul?
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Will this product evoke a passionate response in consumers?
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Which consumers will be most inclined to respond in that manner?
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Is the “face” behind the product one with which will consumers will identify?
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Can the ‘soul’ of this product be effectively conveyed through its marketing?
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What socially conscious benefit derives from this purchase?
