|
Problem. A retired
engineer had an idea for a new tool, potentially useful to both professional and amateur carpenters. He developed prototypes, tested them
himself, and started a small company with his own money. Being cautious by nature,
he contacted T-21 to see
if we could help
mitigate the risks of marketing his new product.
Action. He described the product to his
Team Manager (TM), and he agreed to send a prototype and
its documentation to
T-21. The TM assembled a small Product Test Team,
to initially assess the product's functionality. Members of the Team
included several people with some amateur carpentry
experience. They tested it and made observational notes, then street
tested it with
others, including several professional carpenters. Some important, but easily corrected, problems were identified.
The Team recommended that:
-
Small changes be made in the
product to make it applicable to more situations,
-
Patent application be
completed prior to introduction,
-
A manufacturing cost
model be constructed, to determine the production cost at various
levels,
-
Price Elasticity Surveys
be performed, to gauge demand at various price levels, before committing full resources to
it,
-
The User Manual be professionally written
(since the documentation supplied was sketchy and overly-technical).
The owner made the product
changes, recommended by T-21. He said, "Now, I
really see
what you mean by an outside perspective. The changes were
staring me in the face all along, but I never saw them until you brought it
up."
After making the changes, he
completed the patent application. To conserve money, he
determined the manufacturing costs,
himself. He asked T-21 to sample the product's price
elasticity with our Focus Groups and had T-21
Editors re-write the
User Manual.
Results.
The T-21 surveys indicated probable public acceptance of the
product at a price that would allow a reasonable, long-term profit margin
and meet most contingencies. The
owner was located a few hours drive from America's southern border and was able to
establish product production in an enterprise zone at a favorable cost.
After reviewing the information T-21
had generated for him and the production cost, he decided to go ahead
with the introduction.
Five months later, the product was
ready for the market. Sales were slow at first, as some retailers were
reluctant to carry a totally new product from a start-up company. T-21's
Focus Group surveys helped convince some independent stores to carry his product. The
owner conducted personal, in-store product demonstrations and held
promotional campaigns, giving products away in drawings. He also
sent out flyers by mail and had T-21 establish a Web Site,
illustrating the product and its many applications. Sales
grew slowly during the first nine months, but steadily gained momentum during the
next six months. Large chain stores took notice, when the owner
showed them T-21's surveys, his marketing projections, and his
records of actual sales growth. After eighteen months, the product line was
selling at 80% of production capacity. In
a conversation with his TM, he said, "It was a tough road at
first but it's looking good now. I'm not sure I'd have made it at all without you guys."
|
