Businesses must understand consumers before creating a profitable product.
New products are harder to market than established products for many reasons. Businesses do not know what customers will pay for the new product and aren't completely sure which customers will purchase the products. Also, customers tend to use products they're familiar with, unless the new product fulfills a need that no other product fills. Worst of all, the new product might not fill a need at all, leading to no sales.
Market Research
Perform market research before developing a product. Know what your customers want so you can tailor products to suit their needs. Understand the customers well enough to create advertisements and other forms of marketing that appeal to that core demographic.
Distribution Channels
Decide on the best distribution channel for your product. Determine which stores will sell the product and whether to ship the new product directly to consumers. Consumers tend to buy products using different patterns; for example, customers might prefer to purchase a musical CD at a department store instead of at a coffee shop.
Product Comparison
Compare your new offering to existing products on the market similar to yours in order to understand the competition, determine product pricing and apply suitable product marketing techniques. Ideally, you want to find deficiencies in competitor products so that you can outcompete them.
Product Testing
While developing the new product, allow customers to test it at various product showcase events. The news media can also test products and provide free promotions. Let reporters and customers provide feedback, then gather information and use it to tweak or refine the product. Product designers should ask customers questions such as, what volume of this product would you buy?
Timing
Businesses sometimes announce the release of a new product, only to hit a snag in the manufacturing process, delaying the product release. Also, businesses have a difficult time predicting the demand for the product. If the business builds too many production facilities and the demand is low, then the business won't make up the costs of running the production facilities. If the business has insufficient facilities and product shortages exist, then the business loses credibility and may fail to achieve the highest profit possible when the product becomes less popular later on.
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