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The Science of Diversifying Your Product Portfolio

Almost any company can benefit from introducing new items. A fresh product could boost your revenue, attract more customers and improve sales of existing goods. However, it’s crucial to select or create the right merchandise for your specific business. An unsuitable item might cost too much to develop or undermine goods with higher profit margins. Furthermore, it may simply fail to address the needs of your customers. You can avoid these pitfalls by maintaining a thoughtful, scientific approach to new product launches. The first step is to make a list of items that your business could introduce. Read on for tips on diversifying your product portfolio.

Brainstorming

Think about products that would appeal to existing customers or other people who have access to your business. Prioritize items that nearby competitors don’t offer. If you need help generating ideas, analyze feedback that you’ve received in the past. Look at customer posts on social media pages established by your firm or its competitors. Do people complain that certain items aren’t available? You can also discover some interesting ideas by examining the catalogs or menus of distant businesses that serve similar clients. Keep in mind that a successful product normally addresses one specific need rather than several. Generally, it’s easier to find customers who want to solve problems separately.

Complementary

The best product ideas usually complement existing items instead of replacing them. For example, perhaps you own a prosperous wine bar. Revenue might fall if you start to sell inexpensive beer. On the other hand, you may bolster sales by offering a high-end salty snack. Tortilla chips with hummus would probably appeal to your customers and prompt them to order more drinks. This strategy works well in many industries. A discount store that sells CD players may benefit from adding music, cleaning kits or batteries to its inventory. A great example of this is when Nu Skin a skincare company launched an antioxidant scanner that counts the antioxidants in your blood. It complimented their product portfolio because it helps the skin. Nonetheless, complementary products can’t guarantee success; it’s vital to learn more about the customer’s wants and needs.

Communication

Don’t hesitate to ask people for feedback on your ideas. This isn’t a sign of weakness or lackluster business acumen. Most customers and employees appreciate managers who genuinely listen to them. You can talk to individuals in person, conduct a survey or publish your questions in a newsletter. To save time and encourage honesty, consider using a consulting firm to gather feedback. Surveys are becoming a dime-a-dozen with large corporations because they want to know what their customers want. Companies like Wal-Mart, Home Depot and Costco evaluate the purchases of their customers so they can know what they want. That is a form of communication. ¬† ¬†Remain open to ideas that you didn’t invent. Ask staff members if buyers have proposed new products or requested unavailable goods.

The Launch

After you identify an item that your customers would buy, you can order or develop the merchandise. Try to balance quality and price in a way that suits your target market. Be sure to solicit feedback on the finished product and make any necessary adjustments. You’ll also need to find effective ways to let the public know about this item. If you introduce an important or unique product, consider using a press release to gain free media coverage. Americans often feel reluctant to spend money on unfamiliar goods. Only three out of 20 products are sold to people who haven’t already tried them, according to Harvard Business Review. Think about offering coupons, discounts or free samples.

This may seem like a difficult and time-consuming process. It’s easy to get discouraged and think that your idea might become the next Edsel or New Coke. Instead, you can gain inspiration from the world’s countless product success stories. Kraft reversed a streak of failed launches with Velveeta Cheesy Skillets in 2011. Clever marketing campaigns helped this product generate about $175 million in just two years, according to Advertising Age. Likewise, USA Today reports that a theater in Asheville boosted earnings by over 100 percent when it introduced new beverages and complete meals. Adequate research, planning and communication can make your product equally successful.

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