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Planning To Take Good Ideas To Market


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Steps to take before you spend all your money on advertising!

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Planning To Take Good Ideas To Market

  1. 1. Charting a Course planning to take good ideas to market Mike Breewood Director, Breewood Consulting 0131 319 1758 © Breewood Consulting 2006 Good morning. My name is Mike Breewood. I work with SMEs in Central Scotland helping them to use marketing strategies to grow their businesses, that is I help them to understand what they offer, who they are offering it to and why those potential customers should buy from them. I’d like to thank Graham and the team at Business Scotland 2006 for giving me this chance to come and talk to you all. When he briefed me on the talk he gave me a very simple specification – he said “NO JARGON” and “IT’S GOT TO BE USEFUL TO THEM AS SOON AS THEY LEAVE”. With those injunctions ringing in my ears, it didn’t take me long to suggest that I should talk about ideas and how to make them succeed in the market . Let me start by passing the hat around – not for fivers but for business cards! If you’d like a copy of the presentation, please just put your card in the hat and I will email the presentation to you later today. 1
  2. 2. What we’ll cover today How to generate ideas How to test your ideas How to pick the best idea How to bring your idea to market © Breewood Consulting 2006 Here’s what I plan to cover with you this morning. I want to talk about generating ideas first as that seems to be a crucial stumbling block for many of the businesses I talk to. Then we’ll look at how to test ideas for validity and how to pick an idea as the most promising – and it’s important to have a choice! Then we’ll go on to look at how to bring your idea to market – with a focus on action. 2
  3. 3. Ideas – how to get them © Breewood Consulting 2006 Is this you? Deep in thought? Can’t seem to get any new ideas? You are not alone. Every business I talk to wants and needs more ideas for products, services, markets – some have no problem at all in generating ideas – that’s mainly because they have very creative people in charge – but what can the rest of us do? I’m going to touch on idea creation very briefly in this talk –if it is an area of real concern for you then you should also listen to Barclay Price from Arts & Business Scotland and Sharon Bamford from the Scottish Institute for Enterprise later in the day. Two key points to make about idea creation: 1. You need to focus on ideas with huge growth potential. It’s really hard to get from idea to revenues and profits – so you may as well do it for something that brings real results. 2. The hard work comes in making things happen – so don’t worry if you can’t come up with the ideas yourself – it’s just a chance to team up with someone who can. 3
  4. 4. Stimuli for ideas © Breewood Consulting 2006 Think about what’s happening in the world – in economics, politics, technology, fashion – look for where change is happening or is in prospect. Talk to your customers, look at your competition. Read books and magazines that you might not normally. Cultivate academics or journalists – even go and talk to your local politicians – we’ve got plenty to go around! By the way, you’ll have a chance to nobble Alasdair Northrop, Editor of Scottish Business Insider a little later today when he gives one of these talks. 4
  5. 5. Some techniques to generate ideas Start from a different place… How to write in space… © Breewood Consulting 2006 1. Try to start from a different place – a great example is the different approaches used by the American and the Russians to find ways of writing in space – the multi million dollar pen…or the humble pencil. So, think of opposites – what would be the very worst thing to offer your customer. Think of funny ideas or incongruous ideas Change your routine for thinking of ideas – I find going to the pub to read the FT generates lots of ideas for me! Ask your customers. 2. Share your ideas, with colleagues, with advisers, with anyone you trust. Don’t worry about your idea being stolen – remember the old 1%, 99% split – it’s hard work stealing ideas. 3. Think laterally – can you adopt something done elsewhere and interpret it for your industry or your country. 4. Be ready to capture the ideas – use a Notebook, dictate a memo on your mobile phone, even send yourself an email! You need to be awake to the ideas when they hit you. 5. Start with what you know – your industry, your technology, your processes. Think about what has always bugged you about how things work, about the way things are done – how would you sort it. What is the “wouldn’t it be nice..” point? 5
  6. 6. Key process 1. Expand what you know 2. Question what you have learned 3. Look at practicality, feasibility, marketability © Breewood Consulting 2006 There is a process you can follow – and for this I’m indebted to Doug Hall – 1. Expand what you know about the area in question 2. Question what you have learned, ask “Why”, ask “Why not”, ask “What if” Let everything be possible – the aim is to have as many ideas as possible to consider for your business. 3. THEN – test each idea for practicability, feasibility, marketability – we’ll deal with this stage in more detail in a moment. 4. Leave some time between stages 2 and 3 – the best ideas need time to mature. 6
  7. 7. Good Books for idea generation © Breewood Consulting 2006 You’ll get more detail on idea generation from these books – and there are many, many more out there. Now, on to the important bit – how to assess your ideas for action. Lets start with how you idea maps on to your existing business. 7
  8. 8. Assessment 1 – where are the risks? Current PRODUCTS New Current Market penetration Product development RISK IS LOWER MARKETS Market extension Diversification RISK IS LOWER RISK IS HIGHER New © Breewood Consulting 2006 Marketing folk will recognise this as the Ansoff Matrix – the name isn’t important but the function of it is. Using this grid to look at new products and services we can focus on three areas; New products in your current market, new markets for your current products and new products for new markets. I’m sure you’ll agree that risks for the last of those three are going to be higher than for the other two. Don’t let that put you off – just be aware. This could be your first test of any new idea – where does it fit in this matrix and is it in a box where you feel comfortable with the risk involved. 8
  9. 9. Assessment 2 – will it make money? • Market potential • Market accessibility • Market funding © Breewood Consulting 2006 The next big test is “Will this idea make you money?” That’s a hard question to answer and you will generally need answers to other questions first, questions like: •What’s the potential in the marketplace? For new products that’s still very hard to answer – you’ll need to use proxy questions like “what problem is this idea going to solve?”; “What kind of person or organisation has that problem?”, “How man of them are there?”, “Where are they?”, “Do they have money to spend on the problem?” •Can you access the market? – do you have the right resources, people, capital, training, experience, materials, knowledge. Are their any constraints to trade? •How important is the problem to the market? – in other words is it worth their while to spend money fixing it? 9
  10. 10. Assessment 3 - competition Same problem – same approach Same problem – different approach Different problem – but higher priority © Breewood Consulting 2006 Finally, you might like to test your idea by looking at competition for the idea •Actual competitors with the same approach •Different approaches to the same problem •Different problems that have a higher priority than the one your idea is addressing There will be competition for your idea – there always is. 10
  11. 11. Assessment process Source: Blue Ocean Strategy, Kim & Mauborgne, 2005 BUYER UTILITY PRICE YES YES Is there great Is your price easily B.U. in your idea? affordable to the mass of buyers? NO NO COST ADOPTION YES YES Can you meet your Can you fix margin target at the problems stopping strategic price? adoption? NO NO © Breewood Consulting 2006 This process is described by Kim & Mauborgne in their 2005 book “Blue Ocean Strategy” – an excellent book all about creating uncontested market space and making the competition irrelevant. The key thing is to get the order of the questions right. Is there great Buyer Utility in your idea, in other words is there a compelling reason for the mass of people to buy it – if there isn’t then you don’t have an idea with huge potential. Do you have the right strategic price for the idea. You want this idea to create you lots of profit – so you don’t want to start by selling on price alone to create demand. The price has to be such that the mass of buyers have a compelling ability to pay for your idea or they won’t buy it often enough, quickly enough. Can you produce your product/service at a cost that allows you to make a healthy profit margin. If you can’t, then you’ll have to drop the idea or change your business model to hit the target cost. Finally, consider what hurdles to adoption of your idea there may be. Can you fix them up front? Hurdles may come from within, in the shape of employees, or from without, in the shape of business partners or distribution channels. 11
  12. 12. Going to market Fundamentals: – Target Customer – Compelling reason to buy – Whole product – Competition – Partners and Allies – Distribution – Pricing – Positioning – Next target customer © Breewood Consulting 2006 So, we have our idea, the risks are acceptable, the potential is fantastic and the competition is bearable – how do you bring your idea to market. For this slide I have to thank Geoffrey Moore, author if the technology marketing classic “Crossing the Chasm”. It summarises very precisely everything you must have in place in order to enter a market with a new product or service. Lets look at them very briefly: Target Customer – you need a very tightly defined first target customer, with a real need, that you can access and with plenty of money to pay for your product. You cannot afford to spend time and money hitting lots of target segments at once – you hit to hit them one at a time and secure them as you go. Compelling reason to buy – are the consequences of not buying sufficiently serious for the target customer that he is mandated to buy your product? Whole product- will your product/service completely fill the marketing promise you made and the expectation level of the target customer? Competition – Are you sure no one else has already captured the place in the market you are aiming for? Partners & Allies- do you have all the relationships you’ll need to deliver this idea into the market? Distribution – do you have a sales force in place, properly qualified and speaking the language of the target customer? If you don’t, do you know where you can get one? Pricing – is your strategic price consistent with the target customers budgets and the cost to him of the problem being solved; is your distribution channel properly rewarded all along it? Will you make the profit margin you need to make? Positioning – will you be a credible supplier to the target customer? If not, have you a plan of communication to change that? Next target customer – you don’t simply want to secure the first target customer that comes along, you want it to be good to help you secure your next target segment. Will your first target customer help you to enter adjacent segments? 12
  13. 13. What then? © Breewood Consulting 2006 There’s a huge amount of work just in preparing everything we saw in the previous slide – not to mention actually getting the idea/product/service ready to sell. But once you’ve got all that done, what then? How do we start the ball rolling? Yes it’s that old favourite sing-along - AIDA. Awareness Interest Desire Action This describes the classic Sales-Cycle and the classic challenge for companies introducing new products and services to market. For smaller companies, Awareness is the hardest thing – they can’t afford huge mass marketing campaigns. One really good way to raise awareness is to exhibit at trade shows, like this one – if you pick the right shows then all the potential customers come to you and they do it over a period of a few days. Certainly it costs money to exhibit, both for the stand and in accommodation and staffing costs – but consider how long it may take you otherwise to get in front of a similar number of potential clients.. One client of mine attended 3 very specific trade shows last winter and spring – contacts made then are now yielding orders worth upwards of $400,000 a time. Another attended a trade show aimed at souvenir shop owners – he sells Point of Sale systems – he was the only supplier of PoS equipment and systems there and had potential clients crawling all over him. Spending money on focussed PR is also very worthwhile – come along tomorrow and you’ll get great advice from Shiela Thorp of Bizazz on PR and from Graham Duffy of Graphic Partners on Brand building. [At this point I should mention that I’m taking my own first steps in brand building with the help of Neale Gilhooley of Evolution Design who is over in the corner there] You can also try new ways of communicating with potential customers – many of you will have heard of The Grapevine, an email-based newsletter and community, it’s an ideal way to get your product idea in front of 8000 people just like you, for not very much money. Once people are aware of your idea, Interest and Desire should be taken care of by your work on the Compelling Reason to Buy and by your Whole Product offering. Pulling potential customers through to Action means you will need someone dedicated to and tasked with closing sales – and they will need to be supported with the right collateral, in the shape of brochures, presentations, White Papers, Case Studies. The collateral has to describe the benefits of your idea, how it works, what the key difference is against the competition (real or otherwise) and what the risk/return potential is. 13 Eventually your salesperson has to be able to present the real value of your idea to the customer and compare it to the cost
  14. 14. To finish It’s hard work creating ideas It’s even harder picking the right one to develop into a product or service Think big – and take action Believe in your capabilities Ask yourself the hard questions, before anyone else does © Breewood Consulting 2006 So, to summarise: It’s hard work thinking of ideas, its even harder developing and bringing them to market – but you have to do it – nothing is forever in business any more – ideas which have served you well in the past may reach their end-of life suddenly and unexpectedly – it only takes someone else to put the work in.. You must think big – there is no point at all in settling for the mediocre or the just- good-enough ideas – go for those that will bring you the returns you deserve. Taking action is the key – I remember in 1976 having an idea about storing books on a computer and being able to search each book – I wonder what happened to that idea.. Everyone can have an industry-changing idea, but it takes effort and commitment to turn it into an industry-changing product or service – believe in yourself, you can do it. Be your biggest critic – in a constructive sense – ask yourself “How can I make this idea even better than it is?” Think of the problems, embrace the problems – if you don’t know what the problems are you’ll never be able to do anything about them. 14
  15. 15. Thank you for listening – any Questions? Mike Breewood Director, Breewood Consulting 0131 319 1758 © Breewood Consulting 2006 Thank you all for your time and attention this morning – I’ll be delighted to take your questions now and answer them if I can. Please do remember to leave your business card if you would like a copy of the presentation. 15