A fresh product portfolio can maximize market value
It’s crucial to maintain a fresh product portfolio. Even though some manufacturers may be skittish about launching new products in a slow economy, they can keep you afloat in shaky times. In fact, new products have a 20% profit margin advantage compared to older products, according to market researcher Aberdeen Group Inc.
Plan before developing product
Before embarking on new product development, it’s important to do your due diligence to ensure you’ll meet your customers’ needs. Here are a few tips to get started:
- Get educated. You may have the perfect image of your next product in mind, but remember: You’re not the customer. Solicit customers, analysts, sales prospects and other key stakeholders for new product ideas, suggested enhancements for existing products and feedback on which products aren’t cutting it anymore. Your organization may already have some feedback in the form of surveys and e-mails, so mine that information first. You can then supplement that data with insights from focus groups, market research, case studies and white papers.
- Align product development with company goals. Once you have the necessary feedback from your targeted audience, weigh the pros and cons of specific product ideas in the context of your company’s long-term goals. Potential profitability, return on investment, the amount of risk involved and how a new product will position you against your competitors are all important considerations. If you’re mulling several different product ideas, compare them to each other and to other products in the marketplace to help you decide which ones are best suited for your company.
- Hit the right price point. It’s essential to review your pricing strategy for each of your products regularly, because even good products can falter in the marketplace if they’re priced incorrectly. When setting prices, take into account your competitors’ prices, as well as the cumulative costs that go into producing your wares, including property and equipment leases, loan repayments, salaries, raw materials and a realistic profit margin.
- Make portfolio management a given. The factors within your company and the marketplace that affect product success are constantly changing, requiring you to monitor your product portfolio constantly. Many companies don’t establish firm criteria that determine whether an existing product or project in development is meeting the business’s needs. This allows flawed products to stagger ahead and siphon resources from more viable products. To keep your portfolio strong, regularly evaluate your products based on your available resources and current demand.
Keep customers coming back
With competition for customers’ minds and hearts fiercer than ever, a knockout product portfolio is a key to your company’s success. An effective portfolio management process means fewer costly design changes down the line and better reception in the marketplace.