Considering Expansion? Launch a New Product or Service

Wells Fargo


  • Conduct thorough research
  • Seek expert advice
  • Consider the full scope of expenses
  • Create awareness

Launching a profitable product or service requires considerable preparation and market evaluation. With solid planning and expert advice, Jim Butkovic, president of Integrated Precision Systems Inc. (www.ipsid.com) in Twinsburg, Ohio, executed a highly successful product launch. His company, which manufactures smart-card and biometric technology, wanted to introduce this type of item into a new market.

Conducting thorough research is the first and most vital step when launching a new product or service. Butkovic set up focus groups with his potential clients, namely Cleveland Public Schools, to evaluate his company's idea for a smart-card attendance tracking system for middle and high schools. "We put together a focus group of school managers and principals to determine the demand for the product and to figure out a price point for the marketplace," he says.

Butkovic recommends that business owners seek expert advice in their particular fields when considering expansion. He hired Solon, Ohio-based Birol Growth Consulting, Inc. to guide his company through all stages of the launch, from drafting a business plan to marketing. He recommends using a consultant who has worked on similar products and can guide you through the climb toward profitability. "Look for someone who has a keen sense of the marketplace that you're targeting," Butkovic says. "They should understand what you need to do for a product launch from product development and market analysis to product pricing, warranties and maintenance plans."

Before moving into production phase, companies need to consider the full scope of expenses. Also, talk to other business owners who have introduced similar products or services to find out about the challenges they faced, Butkovic says. "Know exactly what risks you're taking and what the costs of consultants, manufacturing and marketing are going to be," he says. "We felt that we could sustain a three-year period before realizing a positive result. It turned out the product was profitable in half that time."

Businesses must create awareness of the new product in order to succeed. Butkovic implemented telemarketing and direct mail campaigns to build a buzz. In addition, attending trade shows proved to be an effective means to market his smart-card system.

The above article is the second in a series of five.

 


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