Testing Your Market

Enormous amounts of money are spent every year in market testing. Many thousands of prospective customers are surveyed extensively to determine whether or not to bring a product to the market. In spite of the most extensive interviews and surveys, fully 80% of new products or services fail within the first year. Your time and money are extremely valuable to you. You cannot afford to waste them by investing them in producing a product or service that fails in the marketplace.


 

Save Yourself

Every dollar that you spend in market testing will save you many dollars of losses later on in the marketing process. Develop a prototype, model or description of the product or service that you can show to others. With a model or prototype, you can demonstrate it to a prospective buyer. You can try it out for yourself and make sure it works.


 

Determine Costs

Get accurate prices and delivery dates from suppliers, especially if you are purchasing the product for resale. Determine all the costs involved in bringing the product or service to the market. Include your personal labor costs at your hourly rate as a cost of doing business. Ask your friends if they would buy this product at the price that you will have to charge.


 

Be Your Own Consultant

Imagine that you are your own consultant, or that you have been asked to evaluate this product for a friend. Determine the costs of offices, equipment, shipping, loss, breakage, insurance, transportation, salaries and everything else involved in bringing the product to the market. Determine the price that you can sell the product for in the current marketplace. Find out what else is available that is similar, or that performs the same function. Go to a potential customer with your sample or prototype and ask if he would buy it.


 

Compare

Compare your product with other products on the market. Why would someone buy from you instead of from someone else? Solicit the negative opinions of others. Don't fall in love with your idea. Be an optimistic pessimist; look for the flaws in your marketing plan. Tradeshows and Exhibitions are a terrific place to get immediate feedback on a new product; they are an excellent source of market research. Other companies marketing similar products will have their products on display. Sophisticated buyers at the trade show will tell you immediately whether or not your product will be successful.


 

Action Exercise

Start with the customer, what three types of customers are going to buy your product or service?

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