A Product can be either tangible or intangible like services. Before launching a product in market we should first do a requirement analysis. While launching a product we generally face three types of market segments. First is where the customer is already using similar product and we are going to launch different brand of the similar product. Second is where the customer is aware of the product and might have used it but the product is not available in their local market. The third segment is where a new product is designed and is being introduced for the first time. In this segment there is no similar product in the market. Based upon the temperament of the entrepreneur, one of the three options can be considered to start a business.
One Product, Many Brands
This segment, where a different brand of an existing product is to be launched, can be opted by people who seek safety and security in their investment. It is good option for people who want to take less risk to make profits in business. Also such people pay heed to other people’s advice and learn from the success of other people. This option is considered low risk because the product has already been tried and tested in the market and is already selling. Here the challenge would be to change the brand loyalty of the customers from the existing brands. The share has to be taken from the existing market hence making the market competitive. In this segment the brand has to be promoted among the existing customers to get the market share.
Since, the market already trusts the product, it considers the new brand. The customer will compare the new brand with the existing ones. Features and services of the new brand play a vital role in the decision making of the customers.
One Product, One Brand
Second segment, where the customer is aware of the product but it is not available in the local market, can be opted by people who want to experiment but still want to play safe. In this option, the risk will be there but relatively less, a common example is of taking a franchisee. The advantage of taking a franchisee is that the system is already developed and the experience of the franchisor is used in running the business. Here the challenge would be to develop a habit for the product, since we would be the pioneers in the local market. The advantage of this option is that the competition will not be there in the initial stage and when the competition does arise we will have the backing of an experienced company to handle them.
When, the market is already aware of the product, the customer might be willing to try it once. Since the customer is willing to try, all that the entrepreneur and his team have to do is to retain the customer.
Unique Product, Unique Brand
Third segment, where a new product is designed and introduced, is the option suitable for people who are creative, bold and risk takers. This option makes them the pioneers in the industry which has its advantages and challenges. The risk of failure in this option is high but the returns are also high when succeeded. The major challenge in this option is to educate people about the product and to create a need for it. Here they would be treading in uncharted territory and will have to pave their own path. Trial and error happens a lot in this option of business. But it also gives the option of guiding the product segment in any way. The most important character needed to opt for this segment is fast learning and quick thinking. Risk taking with back up calculations can be helpful in making it a success. It is the most challenging option but that is why it is opted by the chosen few.
Since, the product is new there are fewer chances that the market would try it. There would always be an uncertainty about the behavior of the market. However, the customer might be willing to try once educated about the product and its benefits.
Finally, whatever options the entrepreneur chooses he must have complete knowledge of his product and that of the competition. This is why detailed product trainings should be essentially provided to the staff of the organization.