This article is part of the WIT Empowerment Day Mentorship Series, which provides insight and advice from top toy industry experts.
By Deb de Sherbinin, CEO, Perk Consulting
Entrepreneurs often identify a great product idea to address a problem or a need in the marketplace. Many entrepreneurs invent toys, games and juvenile products that are innovative, but they all face challenges that threaten their success. What is the magic behind inventing and launching a successful product that will appeal to kids?
Here are 5 key steps to help an entrepreneur develop and market a successful new product.
These steps provide a guideline for new product success. For each step along the way, a Go/No Go decision should be made to make sure your product concept is ready to move to the next phase.
- Competitive Analysis – Do your homework on the competitive set to validate your product concept. A thorough competitive analysis should identify all competitors in the product category and include analysis of features, price points, packaging style and POP (point of purchase materials). Determine why your product is unique and special so that it will separate from the pack? What type of play value or appeal will engage users with your product? Do your message and visuals clearly communicate what is unique about your product? Before investing time and money into your idea, make sure your product is clearly differentiated from other products and is appealing to your target audience. This is the best time to make tweaks to your product idea based on what you have learned. Go back to the drawing board to refine your product idea to make sure it is appealing to your target audience.
- Market Research – Conduct research along the way as you develop your product among the intended age group. Show a final prototype to learn key likes and dislikes for your product from the intended users. Who are the primary purchaser and primary user? How old are they? What level of education and household income do they have? What type of products do they use and play with? What features do they seek in a product and what type of messages will resonate with them? Show concept boards or a working model of your product idea to friends, neighbors, your children’s friends, or a local youth group to learn how to make your concept better. Gain feedback on your concept at all stages of development to ensure that it is designed for your intended users. Conduct market research to learn how your key target age group will interact with your product. Determine if the product design or rules need to be changed to make the product age-appropriate to your primary user group.
- Product Design and Manufacturing – Create a prototype and obtain estimates on how much your product will cost to design and manufacture to understand a product’s hard costs, as well as to project the retailer’s wholesale price and consumer’s retail price. If the product costs are too high for the product’s competitive set, make changes to your design to meet the right cost parameters. Evaluate other manufacturing alternatives or consider options to increase your sales forecast to lower hard costs. Once a works-like/looks-like prototype has been made and meets safety regulations as well as a child and parent criteria for product functions, cost and design then you are ready to move to the next step.
- Distribution – Where will you sell your product? Online? Amazon? Mass Market or Specialty Retailers? To learn about how your product might be received at retail, prepare a sales sheet and pitch your product to local retailers. Show a mock-up of the packaging along with the product and the suggested wholesale pricing. This allows you to obtain valuable feedback before you spend money manufacturing the product and packaging. Retailers can provide insight on the packaging, pricing, point of purchase materials as well as product features.
- Financing – Create a P&L to identify all costs for developing, manufacturing and selling your product. Project forecasts to estimate sales and determine a break-even for your product. This can be a final Go/No Go level. Do you have the financing you need to manufacture, warehouse, sell and promote your item? If not, this is the time to determine how you will obtain the funds you will need to develop and launch your product. Will you need to seek money from investors, or explore alternatives such as licensing the item to another company or using a crowd-sourcing platform to fund the development of your product?
Spending time evaluating the marketplace, researching your concept with potential users, purchasers, and retailers, gathering cost information for product development and manufacturing and taking a critical look at your P & L is time well invested to bring an innovative, successful product to market.
Deb de Sherbinin is founder and principal of newly-launched Perk Consulting. With deep roots and vast experience in product innovation, brand development, and marketing, Perk Consulting offers innovative thinking, marketpla