All too often we fall into the trap that other people want something because we like it. This is the road to failure. Offer what people want to buy, not just what you want to sell. Too often, people jump into a business built around a product or service they think will be successful, rather than one that is already proven to have a market.
Many entrepreneurs fail to understand they're actually selling benefits, not ideas. Benefits are what motivate consumers to buy products. Likewise, you'll be selling the benefit of your idea to everyone you work with along the way, including investors, distributors and retailers. Is your benefit unique? Is it significant?
A business must sell a product or service to succeed. The issue is do you have the right products for your target market. The product could be fine, but is the packaging good, is the price right, are you selling it in the right market.
The failure rate of new product introductions is very high; some estimate that less than 20% of new products succeed. Conducting a Market Feasibility Analysis for new products is a critical step in the product development process, sizing the potential market, and ultimately determining market feasibility.
Do you truly understand the total investment needed to successfully launch your new project, product or concept? Are the risks acceptable? Feasibility studies help organizations understand which projects to pursue and which to abandon before investing critical resources.
This question is one of the most important questions a business owner should be asking. It forces you to get a better understanding of your customers. Satisfied customers is one of the key elements that leads to business success.
So if there is a need for your product, is it enough to support a profitable business? In the feasibility study mentioned above you have to assess the size of the market. People might like a product that is shown to them as “a nice to have”, but that does not mean they will buy it.
If your product doesn't appeal to a large enough market, you may never recoup the cost of bringing your idea to life. A good indicator of a substantial market is the existence of other products that aim to solve the same problem yours does. If your idea is so revolutionary that not a single other product like it exists, that presents a new set of challenges. That's not to say your idea isn't good or shouldn't be pursued. But it's going to be much more difficult to execute.
Your feasibility study has to ensure that your product will be able to generate enough sales to make it worth the effort. Don’t ask friends if they will buy your products, ask strangers. Can you sell more if you reduse the size, changed the packaging or changed the price?
Will Rogers said – “If companies spent the same amount of money on improving their products as they do on advertising then they wouldn't have to advertise them”.