Marketing any product or service is vital to its success, highlighting the benefits of your product or service to existing and potential customers.
You will need to develop a keen understanding of where your innovation is positioned in the marketplace. This will provide the basis of a marketing plan for both the initial launch and beyond.
1. Understand your market
Plan how you will carry out market research
- Existing information can be useful (see Conduct market research). But you may also need to talk to potential customers or carry out other primary market research.
- Quantitative research gives you hard facts and figures about the number of people or businesses you can target, and how they spend their money.
- Qualitative research focuses on how your potential customers think and behave.
Assess the market
- You need to know how many people will benefit from your innovative product or service, what competition there is, and the most cost-effective method of reaching the market with your offering.
- If selling business-to-business, you can look at different market segments by dividing it up according to size of business, output, location and type.
- For business-to-consumer sales, you might segment the market by socio-economic grouping, age, gender, marital status, lifestyle or occupation.
Focus on the potential demand for your new offering
You need to find out:
- who is likely to buy what you are offering;
- what they will buy and in what quantities;
- where they prefer to buy;
- when they will buy;
- why they will buy your product or service;
- how they buy and how often.
Benchmark your product or service against those of potential competitors
- Comparing your offer against those of potential competitors may give you ideas for your own developments.
- Trying competitors' products or services is the easiest way of understanding the competition. Carrying out a detailed analysis of their strengths and weaknesses will give you an idea of how to establish a market niche or take market share from them.
- Look at other sectors to see how they are innovating. You may be able to make your product or service more attractive to a wider selection of markets and increase your chances of success.
Make sure you are aware of any legal or regulatory issues
- For example, product standards you will have to meet.
2. Conduct market research
Use free sources of information
- Trade associations often collect data from their members, which will give you a good insight into your industry.
- Large libraries and universities have relevant statistics. University departments or experts working in your field are likely to have data they can provide free of charge or at a low cost.
- Government databases are a useful source of statistics. The Government-run Office for National Statistics can provide data on a variety of issues.
- You can search for information online. But if you do, make sure the data is recent and from a reliable source. Cross-check what you find, if possible.
- Many specialist trade publications offer free subscriptions or unrestricted access to their websites.
- Ensure you do not use research simply to confirm your own viewpoint. Be realistic when analysing information.
Consider buying existing research
- You can purchase market reports and research on your industry or potential customers from specialist research companies. For example, GlobalData, the Economist Intelligence Unit, Euromonitor or Mintel.
3. Talk to potential customers
Understand the needs of customers by talking directly to them
- You will need to talk to potential customers to understand their needs, rather than just trying to anticipate what they want.
Listen to feedback
- Engage with potential customers when developing your product or service, rather than simply hoping it will meet their needs.
- Customers frequently see problems or future developments before manufacturers, because they use products everyday or are selling them on to people who complain if they do not come up to scratch.
Keep your distance
- Do not base research on the opinions of friends and family. You risk hearing what you want to hear, rather than honest opinions.
- If possible, hand the analysis over to someone who is not involved in the project.
Do not take negative comments personally
- You can often learn more from criticism - and improve your business because of it.
Remember to log and analyse any customer complaints
- Customer feedback is an ongoing process; use satisfaction surveys, face-to-face meetings, regular phone contact and log complaints and queries.
Get potential customers to test your product or service
- Find a sample of your target market, get them to try your product or service and give their opinion.
- You could contact relevant businesses and arrange an event for people to drop in for a demonstration, or offer to visit them.
- Approach potential customers about test marketing your product. They may agree to use or sell a prototype.
Consider using a specialist for surveys, focus groups or user-testing
- Specialist market research companies or consultants have the necessary expertise.
- Customers sometimes find it difficult to voice complaints to the supplier or manufacturer. They may also worry that you are trying to sell them something.
Use research regularly
- Continuing your research will allow you to keep on top of your customers' changing needs and stay ahead of the competition.
- Keep looking out for new areas of growth, whether this is improvement of your product or potential new markets.
4. Develop a market proposition
Identify key benefits of your innovative product or service to customers
- You need to be able to explain these to potential customers. If they won't buy what you're selling, you cannot succeed.
- Identifying the benefits will help position your new product or service in the right market, targeted at the right customers.
- Make use of the results from your primary research to adapt and improve your offering.
- Often, customers need convincing. They may not even realise how useful a product could be. Emphasise how your innovation solves a problem for them.
- Customers do not always want new products and services, but added benefits that innovation can provide can help them make the decision to buy.
Make sure the benefits are sustainable
- Products and services are easily copied. The key here is the speed with which you can get your new offering to the market.
- Protect any intellectual property (IP) you develop. Depending on your business model, you could also consider licensing your IP.
Ensure the benefits are marketable
- A strong brand image will make it easy for customers to recognise your products, services and associated benefits.
- Benefits must be important to customers: they must be unique. If a current product or service offers similar benefits, customers will not be able to understand and appreciate why they should choose your offering.
5. Develop a marketing plan
Establish your marketing objectives
- Use everything you have learned from your market research to identify target customers and key markets.
- Establish what you want to achieve from your marketing. If you are an early stage start-up with no existing customers, you need to market the benefits of your offering to create demand among new customers.
- Once you have built a customer base, you should aim to retain it and encourage customers to spend more with you - either through buying greater volumes, range of products or by purchasing more expensive items.
Build the marketing plan
- Clarify which features provide the benefits that customers want.
- Concentrate on the unique selling proposition (USP), as opposed to the "me too" features. For example, any supplier can claim to provide a reliable, high-quality service.
Know who your customers are
- The ultimate end user may not be your customer. You may need to market and sell to an intermediary.
- Distributors are close to your customers and can provide invaluable feedback. Listen to their problems and suggestions.
- Customer relationship management (CRM) systems will help you to develop your customer database and carry out targeted marketing campaigns.
Set out the activities and tactics you intend to use to reach customers
- Identify ways to reach your target customers. Most products and services are not suited to a mass market, and do not have universal appeal.
- PR in local and national media can generate awareness and interest.
- Make the most of your website by including easily accessible information on your home page. Make sure your website is optimised for search, so that potential customers can find you.
- Social media is firmly established as a marketing tool. Having an online presence can allow you to extend your reach and communicate with potential and existing customers.
- Holding customer familiarisation days, particularly with very innovative products and services, can help minimise any nervousness or scepticism from the customer.
- Exhibitions can also provide a direct route to customers, particularly for business-to-business marketing.
- Direct mail can spread your message to a selected list of customers and prospects. While the costs of design, print and mailing can be high, it can be a useful tool if your business is built around high sales volumes.
6. Launch your innovative product
Carry out testing before a launch
- Pre-testing your offering with a small group of willing customers can highlight difficulties, which can be rectified before you move onto a larger scale marketing launch.
- A test market will provide more reliable feedback over a wider audience. If it does not meet expectations, the idea can be ditched before you commit any more resource.
- Tests may reveal unseen problems – with packaging or distribution, for example.
Establish a pricing policy
- Unless you have a unique product or service, its value will depend on what your rivals are offering customers.
- Pricing should reflect how you want to position your offering. A premium product or service should have a premium price.
- You may be able to offer a varied pricing structure for different customers. One-off sales carry far higher costs for your business than repeat sales.
- The higher your fixed costs, the higher the value or volume of sales you will need to achieve.
Research your route to market
- Look at different possibilities such as selling online, through retail outlets, directly to the end customer, or using a distribution network.
Investigate a regional market launch
- Regional marketing allows a steady build-up over a few months. The initial roll out can still reveal teething problems, which can be rectified before launching in further regions.
Consider a national launch for a completely new innovation
- A national launch will get you to the market first, catch competitors by surprise and capture the market. However, this can be an expensive way to establish market share.
Consider setting up strategic relationships
- Effective routes to market may already exist. Joining up with a complementary product may allow you to use an existing distribution network. Working in alliance with partners can help reduce risk and costs.
- Corporate venturing or partnering with a bigger company can provide you with greater resources and a greater breadth of experience.
7. Measure your marketing success
Set SMART objectives for your marketing and strategic plans
- SMART targets are Specific, Measurable, Achievable, Realistic and Time-bound.
- Specific targets for a new product launch can include a set level of income or number of new customers, for example.
- Measure your objectives by logging incoming enquiries following the launch of your new product.
- Set achievable targets for each market you are in, your internal resources and level of investment.
- Set realistic objectives. If you take sales enquiries by phone, set your customer sales team a realistic target, such as a higher conversion rate on caller enquiries.
- Set a timescale. Have a start and finish date for your product launch. Missing deadlines can be costly and demoralising for staff.
Defend and expand your market share
- As well as involving less risk and investment, continually updating products and services with small improvements rather than launching major new innovations can help maintain your market share.
- Offering added-value products and services with enhanced benefits can expand existing markets.
Stay up to date with developments and avoid complacency
- Keep on top of developments made by your competitors.
- Monitor the changing trends in the market and consumer preferences.
- Encourage regular feedback from existing and potential customers at every opportunity. For example, create a feedback section on your website, sales enquiry forms or conduct regular surveys.
- Track technological developments so that you understand when you may have to innovate further.
- Environmental developments may impact on your products or services from a consumer and legal perspective.
- Review your marketing plan regularly.
- Find details of your trade association through the Trade Association Forum directory.
- Search for government statistics from the Office for National Statistics.
- Search for market reports and research from GlobalData, the Economist Intelligence Unit, Euromonitor or Mintel.
- Find out about protecting your intellectual property from the Intellectual Property Office.
- Find direct marketing guidance and suppliers from the Direct Marketing Association.
- Search for marketing training courses from the Chartered Institute of Marketing.