You’ve got a great idea. But negotiating your way from the invention you first sketched on a napkin to a successful product can be daunting.
Laying careful groundwork will make all the difference in whether your invention ever makes it to market. I’m continuously surprised by the number of neophyte inventors who throw a product up on the Internet and see if it sells. 99.9% of these product ideas fail when not the inventor does not follow a solid marketing plan.
Benefits of a Marketing Plan
Successful products are based on solid marketing plans. Without a marketing plan, you waste time, money, and most importantly, missed opportunities. If you have a good product, you need to have an equally good marketing plan.
A first-rate marketing plan is the foundation of a winning product.
Benefits of a marketing plan include:
- Provides a clear roadmap based on facts, data, and analysis.
- Keeps you on track to generate product sales.
- Reduces wasteful spending by following a strategy rather than gut feel.
- Uncovers your customer's true desires and characteristics as the basis of marketing messages (emotional and logical connections).
- Identifies openings in the market.
- Identifies how to create competitive advantages.
- Identifies markets to avoid.
- Identifies the best strategy to meet your goals and objectives.
Four steps in the successful inventor’s approach:
- Refine/Define your product.
- Define the market.
- Define the business itself.
- Understand the “meta driver” that’s pushing your invention at this moment. “Why is this a business opportunity now?”
Within those steps are a number of factors every inventor needs to address.
Refine/Define Your Invention
It’s a no-brainer, right? You know what your invention is. But your idea might evolve as you do more research. Too often, inventors worry about rushing to the marketplace, but don’t spend enough time evaluating the product or what niche it will fill. “Inventors think ‘I’ve got to get it out there before anybody else. They forget to design the business, to look at who the competitors are and who might be complementary businesses.
As you evaluate the marketplace, be receptive to the needs of your potential customers. Some entrepreneurs are content to conduct “obvious market research,” looking at megatrends. Too often they miss that individual conversation in which people really reveal what they need. This is good news, in a way, for the independent inventor operating on a shoestring budget. You can learn a lot simply by observing and talking to individuals. See how consumers use a similar product or participate in an activity where your invention would be used.
It might seem early in the process, but it’s not too soon to start thinking about the second generation of your invention, either. Plan for the adoption curve, noting who is likely to use your invention first, and how you can improve it for subsequent users.
As you continue to develop your idea, the ultimate reality will be how to protect your intellectual property rights.
Decide on a Marketing Plan
Designing a business to market your invention or licensing your invention to another company are the two pathways to market. Choosing to handle the manufacturing and marketing of your product involves considerable more work and risk on your part. It can be hard to fight for space on store shelves for your product or to establish your customer base. In addition, many big companies don’t want to buy an idea from somebody unless they had a track record of proven sales. It’s kind of like winning the lottery.
As you approach companies, you’re also not likely to get them to sign non-disclosure agreements. You have to weigh the risks involved in sharing information about your idea. If you’re an individual inventor without much money, you really don’t have much bargaining power. You really have to find a company you trust. Tell them your idea, and see if they want to work with you.
Most companies have channels by which ideas are submitted. Some large corporations even offer submission areas on their web sites. A reputable licensing agent can help your invention find a home with a manufacturer but will take a percentage of the royalties.
Conduct Research
Feasibility studies will let you know if planning your own business makes sense. “People way underestimate the startup costs. They way underestimate customer acquisition time and costs. Make sure your plan holds water.
Process to Create a Marketing Plan
We've developed a structured process to create a productive marketing plan. The process is flexible to accommodate the special needs of clients and new products.
The steps used to create a marketing plan are:
- Organize – Gather information covering your goals, objectives, product details, and the market potential.
- Market Research – With an understanding of your needs, perform market research. The key indicators are industry trends, market success factors, competition, opportunities, customer demographics, customer behavior, and the product characteristics important to your customers.
- Create Plan – With the knowledge gained from research, the marketing plan begins.
- Implementation – The marketing plan should be laid out in phases so you can complete the action items in an orderly manner. You can hire others, or do them yourself. Your goal is to learn and grow.
Marketing Plan Contents
There is no one standard marketing plan format. However, we've found that by researching and analyzing certain topics, provides a solid foundation and leads to successful strategies to generate product sales.
Your marketing plan should cover:
- Industry – The current activities and trends related to your product's market.
- Market Data – Statistics and data related to your market, competition, and customers.
- Market Success Factors – The specific industry norms and customer expectations.
- Opportunities – Any current and future openings in the market for your product.
- Threats – Factors to take notice, avoid, and monitor including the competition, government actions, and technology trends.
- Competition – Analysis of comparable products.
- Customer – Your customer's demographics, psychographics, and buying behavior.
- Influencers – The understanding of how certain people influence your customer's buying decision.
- Product Characteristics – Uncovering the important product benefits, features, and functions sought by customers.
- Strategies – Based on your current situation, the strategies (product, pricing, marketing communications, distribution, partnerships) to meet your goals and objectives.
- Tactics – The actions to achieve the strategies (methods to generate awareness, interest, sales, and re-purchase).
A marketing plan is actually an investment rather than a cost. A good marketing plan generates product revenue that far exceeds the cost.
· The time to research and create a typical marketing plan takes about 20 hours of work by a professional. At a rate of $150 per hour, times 20 hours, the total amount comes to $3,000. If you have completed a detailed business plan along with market studies, the total cost can be lower. If extensive market research is needed, such as surveys, interviews, and focus groups, the amount will be higher.
· Marketing plans developed by large marketing firms often start at $10,000 to $20,000 and carried out by junior staff members. You do not need this type of marketing plan.
Ask yourself the following questions to see what you will need.
MARKETING PLAN INTAKE QUESTIONS
1. Is your product in the market or in development?
2. What is your product or product idea?
3. Currently, what is your main business issue or problem or need?
4. When did you launch your product, or when did you begin development?
5. Do you have a written business plan?
6. What is the approximate current marketing expenditure, or plan to spend on a monthly or yearly basis?
7. Do you have these funds or are you looking for investors?
8. Who are the people that make the business and marketing decisions (or yourself only)?
9. What are your expectations?
Did you know that the U.S. Patent & Trademark Office estimates that nearly 97% of all patents fail?
Only 3% of the patents issued by the Patent Office actually make more money than it cost to get the patent in the first place.
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