1. Clues that Lead to a Thorough Analysis
It isn’t sufficient to say that you first need to make a thorough analysis of your business because that really only comes after clues that you are no longer performing as you once had. Whether you topped the market for a decade or just a few months, customers give you the clues you need to analyze whether or not an expansion to your current product line is an option. Most often it is because the competition has developed something a bit trendier or more innovative than what you have to offer.
2. Research & Development
Once it is decided that it’s time to expand your line, research and development kicks in. However, first you really need to do an assessment of how much it is likely to cost to conceive and develop a new product, put it through all the quality and market tests needed and then enter production to take it to market. As part of the whole R&D element of product expansion is determining where funding will come from, Columbia Bank in New Jersey recommends that you speak with your lender about the current state of small business loans. Are they being made available and if so, at what kind of rates? If it looks as though R&D is going to be kept cost-efficient and that you can qualify for a business loan to begin researching and developing your new brain child, the next element should be set into motion.
3. Marketing & Distribution
Don’t make the mistake of so many companies that wait until their new product is fully developed and ready to be released. Marketing should begin the moment you have a workable prototype and continue through all phases of testing. When your new product is ready to hit the production line you may already have distribution channels lined up so that you can ‘come out swinging.’ If you have hit the market during production hard and heavy with your advertising and various promotions, you won’t need to wait long to see how your product is faring in the outside world.
There are times when you can manufacture your own products and other times the actual production needs to be outsourced. Keep costs in mind when producing your new product because you can quickly kill your product expansion budget by going over at this stage. Sometimes production also leads to revisions that are needed but not caught during research and development or during the marketing stage of R&D. A quick trip back to the drawing board, a few fixes later and you’re ready to start another round of production. Here you might want to take note of all the product recalls you have witnessed in your life. This is typically the stage where everything fell through.
Those products passed R&D and the market research stage but something along the line wasn’t caught, some small defect passed quality control and after producing hundreds of thousands, even millions of an item, the recall led to a huge loss in revenue. The point being made here is that although your new product appears to be ‘the real deal,’ take production in stages. From iPhones to Goodyear Tires – there is always a chance that something was missed in a critical stage of research and development so produce on the side of caution. There is nothing quite like putting a product in the hands of consumers to see how well it does.
These four elements of product expansion are the most basic elements that are common to companies around the globe, large and small. If you are looking to get your company back on the map with newer and better products, keep these key elements in mind so that you don’t go off course and lose your way. Product expansion is a wonderful way to grow your business, but only if you are ready to accept defeat as well as victory. You never know until you try.