Lack of funding is attributed to be one of the common reasons behind failed businesses.
You just came up with a great new business idea – great! But is a great idea enough for a successful business?
If that’s what you believe in, it’s time for a reality check, my friend.
Coming up with a great idea is the first step to becoming a successful entrepreneur. Now you need to work on turning that idea into a reality by funding it, taking it to market, and letting your business change the world. According to a recent study, over 94% of new businesses fail during the first year of operation. Lack of funding is attributed to be one of the common reasons because money is the bloodline of any business.
The two quickest and most common ways entrepreneurs use to determine the market size are the top-down and the bottom-up approaches.
One of the most important things to know before you even think about turning an idea into a product is the size of the market you’re going to be targeting.
You might have a great product, a cutting edge website, a well-trained and enthusiastic team, and customers who love your product, but your company might still run at a loss if there aren’t enough customers in the market to support the business.
To avoid such a situation, professional entrepreneurs and investors conduct market sizing exercises before investing in a new business.
You might think your product or service will sweep the market away, but without having a foundation of information about your customer’s wants and needs, you can’t know if your product will do well.
Thousands of new products launch every month. Yet only a fraction of those gets enough traction to be considered successful.
Knowing whether or not your product will sell is one of the biggest questions in marketing. You might think your product or service will sweep the market away, but without having a foundation of information about your customer’s wants and needs, you can’t know if your product will do well.
In this article, we explore the concept of product marketability and ways to know whether your product is marketable.
What Is Product Marketability?
Marketability is essentially a measure of whether a product will appeal to buyers and sell at a set price range to generate a profit.
Marketing techniques include public relations, advertising, trade shows, collateral production, and other functions such as product quality assurance and documentation.
Product developers should complete a marketability evaluation before attempting to market products. Doing so helps marketing managers and other executives determine whether the product is marketable in the current and future market.
4 Ways to Know if Your Product is Marketable
When starting a business one of the big questions you’ll want the answer to is, “How can I know if my product will sell?”
There are several ways to know if your product will sell before creating it. These methods don’t guarantee success but will dramatically increase your odds.
Conduct Market Research
Researching to determine if there is a market for your business is key to successfully selling your product.
We recommend you do some market research before devoting too much time and money to the business. Conducting market research can help you learn how many consumers or businesses could use the product. Once you’ve determined the demand for your product, ensure that it can be made and supplied at a low enough cost that your retail pricing is affordable. It can also help you assess your competitors, which will exist regardless of how unique you believe your innovation is.
Listen to the Market
If you are in the business world, you need to accept that customers in the market determine the fate of your company’s success. Customers have the final word when determining whether an item is purchased or not. Getting to know the market before you begin selling your product can give a clearer outline of what you will experience.
Once you have a better understanding of the market you are about to dive into, you can make better business decisions on how to approach the market.
Your target customer should serve the base upon which all other concepts are built. After all, your consumer determines your product’s success.
Test Your Product
Some of the biggest companies test their products before introducing the product to an entire market. You can create a prototype and begin with small testing either online or in select stores. It will help you answer questions to a degree that research may not. Getting customer feedback can help you tweak your product or idea before mass producing something that might fail.
If your target customer enjoys your service and offers good feedback, you know you’ve got a marketable product.
Find the Right Price
One of the most impactful product marketing tactics is pricing. Product price gives your product a status (affordable or high-quality), an audience (based on disposable income), and competitors. Use your product, audience, and competitor research to identify the perfect price point for your product, considering product costs and profit margins. Keeping up with market trends will help you determine if you should raise your lower your prices.
The key to determining your price is that it needs to sustain your business. If you price your products at a loss or an unsustainable profit margin, you will find it challenging to grow and scale.
There are other important factors that your pricing needs to account for, like how you’re priced in relation to your competitors, and what your pricing strategy means for your business and your customers’ expectations. But before you can worry about anything like that, you need to make sure you’ve found a sustainable base price.
The Product Manager Roles
The product manager is in charge of determining a product’s marketability and is ultimately responsible for its success in the market. In terms of determining the marketability of a product, the product manager’s responsibilities include product conception (product market and market research), product development, product launch, product sustaining, and product discontinuance.
People often laud entrepreneurial risk-taking. Indeed, starting a business requires a leap of faith. However, it is important to remember that people who took a risk and lost it all tend to keep their failures to themselves, and thus we only hear about those who have succeeded.
We recommend that you start your own business only when you’ve done your research and are confident you will succeed instead of underestimating the risk involved in starting a new business.
To take your idea from concept to market, you must prepare to invest time and money and factor in some determination to turn your vision into reality.
If you’ve moved past the ideation and conceptualization stage of business, you have moved on to the business development stage. You’re ready to start manufacturing, marketing, and selling your product or offering your service.
While many people believe that coming up with an exciting idea that you believe in is 90% of the work done, reality often deceives expectations. The hard reality is that coming up with an app idea is easy, and figuring out what to do next is the hardest part.
However, the magic is in the execution.
To take your idea from concept to market, you must prepare to invest time and money and factor in some determination to turn your vision into reality. But if you’re struggling with where to start, this article will help you get going. So read along!
Steps to move your product concept out of the ideas shed and launch into the marketplace:
1. Conduct Market Research
The importance of this step cannot be overstated. Without conducting market research, the chances of your business failing at the first point of contact with your customer increase greatly.
Conducting market research can help you learn how many consumers or businesses could use the product. It can also help you assess your competitors, which will exist regardless of how unique you believe your innovation is. We recommend going offline and conducting real-world market research to nail this first step.
2. Connect with customers
Knowing your customer in a wholesome manner is prominent to having a strong customer base. As an entrepreneur, you must know what your customers want, their preferences and desires, what they are looking for, and their purchasing behavior.
Maintaining an enhanced customer base will build confidence and loyalty in them for the brand and give the company free marketing in terms of word of mouth.
If you are a retailer with no online presence, consider setting up a web store as another way to capture sales and connect to the clients. Consider engaging with your clients through emails and social media campaigns.
3. Profile your customers
When designing a product, it is easy to get caught up in your passion for the idea and become disconnected from those who will ultimately buy the product. Understanding your customer will help clarify your design parameters, what features add value, and which are just adding costs.
Anything that helps you get closer to understanding your customer is useful. It’s great to think out of the box as well. Your ultimate goal must be to make an abstract concept of your customer into a real person with wants and needs.
4. Leverage social media
Social media is one of the strongest tools in the business development strategy. Numerous social media platforms allow sellers to reach their potential customers and the masses.
By implementing a comprehensive social media strategy, you can ensure social media works as a driver of new business that positively promotes your service offerings. However, to best leverage social media, it is important to understand your customers and identify the channels through which they prefer to communicate. Instead of using social media to sell your product, use it to give away your knowledge, industry trends, and insights on the preferred platforms, and focus on building a relationship with your followers.
5. Do your legal due diligence
Legal due diligence can refer to intellectual property (IP) rights as well as product compliance and safety testing. It is possible to carry out a certain amount of due diligence yourself, but at some point, you will need to spend some money to make sure your product does not infringe any law, is itself protected, and can be legally sold in your target market.
Most third-party testing houses will give you free advice and a list of legal testing requirements that you will need to pass to launch your product.
6. Market Your Product
Marketing is the process of getting the right goods or services or ideas to the right people at the right place, time, and price, using the right promotion techniques and utilizing the appropriate people to provide the customer service associated with those goods and services or ideas.
A business plan forces you to clarify the strategic plan for business growth.
It consists of the answers to some key questions – how to get your product or service into the hands of customers who are your target market. Will you do it yourself, or will you outsource manufacturing? Who is going to physically transport your product to customers? What are the methods of distribution: retail, online, and/or catalog purchases? Who will sell it: you, in-house sales staff, independent reps, telemarketers?
7. Launch the product and research future market opportunities
Launching the original product is the most exciting part of the process, but the work doesn’t end here. Apart from marketing, an entrepreneur should look for other opportunities in the market. Is there a way the product may be useful for another audience? Are there improvements or expansions that should be considered for the line? This method of continuous innovation is what turns a single creation into a global product line.
Product-market fit happens when you have successfully identified your target customer and served them with the right product.
The term product-market fit can be baffling for new product managers. The phrase sounds great in theory, but in reality, it is also one of the most misunderstood notions.
Hopefully, this article will be able to answer some of the questions surrounding product-market fit for you.
What is Product-Market Fit?
The most simplified definition of product-market fit is in the name: your product fits into the market, is where it is supposed to be, and you grow your business because of it.
Product-market fit is when your customers become your salespeople. In business, it is a magical moment when three things happen:
Existing users recognize your product’s value.
They tell others about their great experience with the product.
Your company replicates the excellent experience for the new users.
After all, the end goal of likely every business is to provide enough value to customers that they become your advocates and help you grow your customer base.
Signs of Product-Market Fit
Product-market fit refers to a situation in which a company’s target consumers buy, use, and tell others about its product in sufficient numbers to keep it growing and profitable.
Product-market fit happens when you have successfully identified your target customer and served them with the right product.
Here are five indicators to identify product-market fit.
Understanding Customer Needs:
Your target customer should serve the base upon which all other concepts are built. After all, your consumer determines your product’s success. Learning the needs of your customer takes time and experience. If you don’t know your customer, you won’t have much luck figuring out the product-market fit. Developing a deep understanding of the problems facing your customers enables you to relate to them better and ultimately helps builds trust and credibility.
One of the best measures for determining if you have achieved the correct product-market fit is the retention rate. If your clients abandon your product after the first use, it indicates that it has not attained the necessary degree of customer satisfaction. The higher the turnover rate, the lesser the chances of finding the proper product-market fit.
Similarly, if your target customer enjoys your service and offers good feedback, you have found the perfect product-market fit. If your product is retaining at least 40% of the customers over a long period, you have a strong sign of Product-Market fit.
The bounce rate is the percentage of people that view a page of your website or social media (say, your home page) and then depart without any action (such as registering or starting a free demo). Traffic analysis is a regularly used measure of bounce rate. The bounce rate is derived by dividing the total number of visits by those visitors who did not take further action (i.e., visitors who just looked at one page). After that, the real number is expressed as a proportion of total visitors.
A high bounce rate typically indicates that the product is not attracting visitors, whereas a low bounce rate indicates that the visitor’s expectations are met and that the product is giving a nice first impression to its visitors.
Net Promoter Score (NPS) and Referrals:
The easiest way to collect direct consumer input about a product is to utilize Net Promoter Score (NPS). The NPS is a questionnaire-based survey that allows you to learn what customers think about your product, including what they like, dislike, and what improvements they would want to see.
It is a metric that measures how likely your customers are to recommend or promote your product to their friends, colleagues, and family. If your product referral chain grows every day, you’ve found the ideal business strategy.
NPS has become an important performance indicator among marketing and customer support teams. If your customers are rating you well, it means your product is having a good run in the market.
The easiest way to attain product-market fit is by building credibility. The best way to build credibility is to offer up a story. Customers want to know how your product or service will make sense for them, and the easiest way to do this is to inject their needs into your brand’s story.
While there’s nothing more engaging than a story, there are other ways to further establish your credibility.
The major one is being involved in your industry.
Publish all types of content for your market, write guest articles for industry blogs and magazines, and show your prospects that you know what you’re doing.
Trust is critical for establishing credibility and increasing the lifetime value of your customers.
The product roadmap highlights where the organization is, where the organization wishes to be, and how it will get there.
Developing a Product Roadmap
Road mapping is a key component of strategic planning. The act of creating a product roadmap may catalyze discussions about where and why you will focus your efforts. When your product strategy is linked to implementation, you will always be able to trace the impact of your efforts. In this article, we explore the concept of a product roadmap and discuss how it benefits a business/startup.
What is a Product Roadmap?
Building a product isn’t something you can do in one night, one day or even one week. It needs concentrated efforts that are reliable, adaptable preparation and many other logistics to consider. Product roadmap refers to the planning that goes into creating a new product or feature.
A product roadmap depicts how a product manager intends to produce a product and contains the budget and strategy to produce it. It is a strategy for creating your product and a plan for how it will satisfy a set of commercial objectives.
A product roadmap depicts how your product will evolve. It outlines where the organization is now, where it wants to go, and how it will get there. It is a useful reference for teams to plan activities and carry out the strategy.
A product roadmap is not a to-do list for operations. Rather, it is a strategy document that will assist you in developing a plan for your product and keeping your team on track in carrying out that plan. It is a tool for sharing your product vision and carrying out product strategies.
Here are a some of the tasks that a product plan accomplishes:
Describe the vision and strategy for your product.
Create a strategy for executing your product’s strategy.
Ensure that all stakeholders are on the same page.
Discuss and plan all of the situations as soon as possible.
Why are Product Roadmaps Important?
It takes tremendous effort to create and deliver a product. It requires real commitment towards your goals — from product management and product marketing to engineering — to pull it off properly. This devotion is best exemplified by the product plan. It is a guarantee to your team and consumers that you will be held accountable for the most important tasks.
Roadmaps are extremely effective communication tools. However, there are also other significant advantages to using one. Product roadmaps, in particular:
Back up your vision and strategy
Create an action plan for bringing your strategy to life.
Allow time for debate and scenario planning.
Who is Responsible for Creating a Product Roadmap?
Creating a product plan should be a collaborative endeavor. While it is easy to veil product priorities in mystery, teams thrive when transparency and honesty are valued. This is especially true if you’re working on numerous products or providing support for legacy software.
Product managers are in charge of the product roadmap. He/she is in charge of gathering research, ideas, and feedback, translating and prioritizing these materials into features, and eventually constructing the roadmap itself. They also determine when and how to construct the best roadmaps for the team.
Ultimately, the product management team (or product manager) should be responsible for what makes it onto the roadmap and updating it as needed.
How to Build a Product Roadmap
1. Define your product’s goals
The product strategy describes how you intend to accomplish your product vision. It connects your product vision and roadmap by converting the vision into activities that will be emphasized in the roadmap.
Product strategy assists you in developing your future product and thereby, lays the groundwork for your roadmap.
Your product strategy should contain information on:
What kind of a product it will be
Who are the customers
How it will fit into the market
How it will create value for customers
2. Keep your roadmap clear and concise
Product development goes a lot more smoothly when everyone on the team is working toward the same goal. However, this can only happen if the entire team understands the product and its role in its development.
It’s critical to maintain your roadmap basic and straightforward. You may believe that a complex game plan will outline each stage of your accomplishment, but this approach will only result in miscommunication and missed deadlines. The key to keeping staff focused and motivated towards the same objective is to have a clear and concise plan.
3. Breakdown features into user stories
Product features can help you quickly understand your product. However, the problem is that they can’t easily fit into sprints. Hence, breaking down features into sprints is essential for further simplification.
Here are some examples of how features can be broken down into user stories:
Individual workflow stages can be used to divide features into user stories. It will assist you in better understanding your product and planning your efforts.
Organize features by happy/unhappy flow, or how functionality acts when everything goes smoothly versus when there are exceptions, deviations, or other issues.
Sort features according to the data types they return or the parameters they must manage.
Break down features into Create, Read, Update, and Delete activities.
5. Set a timeframe
A destination is required for a roadmap. Set a rough but reasonable timetable based on your intended objective and the difficulties you’ve discovered.
Are these problems with apparent easy fixes that you can test in a few months? Or are you committed to major strategic changes that might take years to fully implement?
Remember that transformation takes time. A product roadmap, on the other hand, should demonstrate progress early on, so you don’t commit to chasing outcomes for years on end.
6. Customize the roadmap for your stakeholders
The process of creating and delivering a product requires several teams, each of which has its own set of ambitions. While your development team may be interested in seeing the product’s development aspect of the product roadmap (i.e., what technology they’ll be expected to use, when they’ll be expected to complete the work, etc.), your investors may be looking for an overview of how you plan to grow market share over the next few quarters.
As a result, personalizing your product roadmap to showcase the specific facts they’re looking for is critical.
7. Review your product roadmap
There’s a good chance your product roadmap won’t be ideal. And that’s just OK. You’ll have to rouse your staff to fulfill deadlines if unexpected barriers arise. It’s all a natural part of the procedure.
You may, however, protect your roadmap by evaluating it whenever you have an issue.
The details in your roadmap are not set in stone. As the priorities of your company change, and as the customer needs and market trends evolve, updates to your product roadmap along the way will be inevitable.