New Product Development
That's Guaranteed To Make Money—Part 1

September 1, 2005

Sounds like a big promise, doesn't it? Since something like 98% of all new products fail, how can you ever be sure to have a success every time?

The answer is: Don't do it the way the people who fail do!

The way they fail is to invent or come up with some idea for a product that "everyone will want to buy" and then try to figure out how to sell it. The products that do succeed when developed this way are things like PC's, microwave ovens, and other successful major inventions.

The problem with that is that it can take years or even decades before the product gets acceptance and takes off. Plus you have to be smart enough to do it....

Less than 3% of all inventions that actually get a patent end up to be commercially profitable. So, that's a game only large companies with plenty of cash can afford to play.

So how do you do it?

You start with the MARKET, not the product. I'm lazy and nowhere close to smart enough to invent products like microwaves or PC's that sell by the millions. What I want is a product easy to create where all I have to do to sell it is let people know it exists, and they buy.

Here are two ways:

1.  

Find a market where there is a high demand for a number of products and make something that is faster, better, or cheaper for those same customers.

2.  

Find a market where products are being successfully sold with rotten marketing. Make your own version and sell it with good marketing.

The 1st type of new product development applies mostly to physical products and can be difficult to do. The 2nd way is easier — you can develop an "information" product guaranteed to sell in only a weekend. It's new product development based on a product that's already around.

It's going to take several issues of this newsletter to explain it all so this issue will start with the first one.

EXAMPLE #1:
Back in the 1980's kids' stickers were the fad and very popular. I had started my first company with a partner making screen printed souvenirs. Our equipment could make stickers too, so after about 200 companies had entered the market, I noticed the trend...

Remember, being smart has nothing to do with it.

We had found the best-selling souvenir decals were being made out of a prismatic vinyl that reflected light into rainbows. We didn't see anything in the kids' market like this, so I thought, why don't we make some and see if they'll sell.

Long story short, we tried it, they sold and 3 years later we were selling over $1 million of prismatic stickers—every MONTH.

The Lesson: If something sells in one market it might sell in another. If no one has tried, test it and see.

EXAMPLE #2:
The prismatic material was very expensive so when we made stickers, our packages were much smaller than all the other kinds. They sold anyway because the kids liked them.

When I noticed the materials were being made in a new way that dropped their cost, I thought: "if kids like stickers made out of this, maybe I should try bigger products now that the material cost has dropped."

I had a second company by then and in this company we put out a line of prismatic school supplies including 2 pocket folders, 3 ring binders, notebooks, pens, pencils, rulers and more.

We tested the folders first and they sold well so we added the rest.

The result was 4-foot sections in Wal-Mart & Target stores, and an award from Target for the best new product that year and $7 million in sales.

The Lesson: Apply a successful "look" from one category of product to another.

EXAMPLE #3:
A few years later we noticed that kids' stickers were used in medical and dental offices to keep kids from crying or to reward them for being good.

All the products being sold were round paper circles. Not even cut into shapes, just plain paper.

We did a test mailing to pediatricians that consisted of a few samples and an order form (no sales letter or anything, just an order form!) We got a 25% response and the company grew to a mail order company with over 10,000 medical and dental customers throughout the US and Canada before we sold it to a larger competitor who offered us more than it was worth...

The Lesson: same as #1—keep looking for other places or distribution channels to sell what is successfully selling elsewhere.

Next issue, we'll go over a particular type of new product development: how to create an information product in a weekend.

For More Information Contact:

Joe McVoy
Profitable Marketing Systems, LLC
1100 Nautilus Court
Lafayette, CO 80026
Web: www.ProfitableMarketingSystems.com
Email: Joe@ProfitableMarketingSystems.com
Phone: (720) 890-8760
Fax: (303) 604-6839

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