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Ready - Fire - Aim - Product management gone wrong!

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Ready - Fire - Aim - Product management gone wrong!

  1. 1. GRP Advisors, LLC Creating revenue with market solutions… February 2007 “Ready – Fire – Aim” Sounds crazy doesn’t it? Yet hundreds of companies use this very strategy to develop their new product offerings. What are the end results of this strategy? - Missed forecasted top line sales or gross margin - Late and over budget projects - Plain, “me too” products With the wealth of new product development process information available to companies and practitioners it never ceases to amaze me how frequently new products fail and more incredibly how companies are surprised when the new product they “throw over the wall” into the market doesn’t meet sales expectations. Every year companies waste millions of dollars marketing, advertising and branding products that fail to connect emotionally or even logically with their customers. In each issue of this newsletter I will focus on common product development and marketing pitfalls, explain how to identify the problem and provide tangible insight that will improve bottom line profitability.Product Development PitfallsOften products fail to deliver targeted sales, profit and ROI because they are not focused onmeeting specific needs of a specific customer segment (i.e. all customers are not created equally).Instead, the product line becomes a range of line extensions based on different theme variations:bigger, smaller, more expensive, less expensive or different feature content.Consumer electronics companies are notorious for this type of strategy. This shotgun approachbecomes a very costly method to develop product with excessive tooling and development costs.Historically this strategy results in unit sales and ROI’s that vary widely from the best to the worstsellers.We all don’t drive variations of the same car, we drive cars that meet our specific logical andemotional needs – people just starting off in life or retired may be very frugal and drive economycars, ranchers and farmers have long valued the multifaceted benefits of pickup truck, familiesgravitate toward mini vans and others may choose a performance sports car not for practicalreasons but emotional ones.Take portable GPS systems for example; my local retailer has at least nine different models fromdifferent manufacturers on display. As a consumer I couldn’t tell them apart, other than physicalsize, screen size and price they all appeared identical. I guess the manufacturers all think there is
  2. 2. only one type of customer. Can you imagine how different they would be if they had targeteddifferent customers instead? What features would you want if you were a traveling sales personworking out of your car…imagine a GPS that seamlessly connected with an ACT database,became a PDA for tracking your calendar, provided account notes storage, automaticallycalculated driving routes by account name, use the address book to dial cell phone. Or if you werea young mom that just moved into a new town – a nearest button to find the Dr, Hospital, cleaners,grocery, bank…for that matter a nearest button would be a great asset if you were on a road trip.Each of these factors and their relative importance lead to dramatically different product decisions.The moment a company modifies its new product approach from “ready, fire, aim” to “target,study, implement” you begin down the path toward improved sales and profitability. Clearlydefining your target customers, understanding their problems and purchase motivations beforedeveloping your next product will lead to improved margins and return on investment.Remember two things, successful products are SOLUTIONS to customer problems, needs orissues they may not even realize they have. Second, customers are the ultimate judge of productsuccess and failure and the verdict they deliver is based on SALES.Does your company need assistance with defining customer segments or new product needs? Areyou looking for a team of professionals that understands the emotional attributes that drivepurchase decisions? Call or email George Pariza for more information.About GRP Advisors, LLC GRP Advisors, LLC specializes in helping companies improve the bottom line by - defining, designing, and delivering successful new products - developing innovative strategic plans - crafting and implementing differentiated brand identities George Pariza the principal at GRP Advisors, LLC is a degreed engineer with 5 patents, has delivered 100’s of new products, and crafted numerous new brand images over his 20+ year’s experience turning around underperforming brands, product lines and launching new ones for brands like: Contact Information Email: Cell: 630-309-5646