Need to Knows From Idea Concept to Consumer Sale

Editor’s Note: Mark Dohnalek is President & CEO of Pivot International, the Kansas-based global product development, engineering & manufacturing firm.

Negotiating your car price based on what you can afford in a monthly payment is the wrong way to buy a car but it's the only way to begin your product design & development plan. Because if after months (even years) of investment in engineering, material sourcing, patent protection, and protype testing your product cannot be made and sold at a reasonable price for buyers and a profitable price for you – then it was all for nothing. Yes, nothing. That is why every step you take in product design & development from idea to the shelf should always be price-driven. Here's a few of the “what you will need to know” for getting started:

Know why to drive the how. There should be only one purpose for developing a new product: there is a need in the marketplace. But there are many steps on the path to developing a successful product, and even if you have the resources of a healthy company behind you, one poor decision can set you back significantly – both in time and money.

Know who will use it. Just because a developer sees a potential need in one area of the world, it doesn't mean the need is universal. This is important to know because it can limit the number of people and populations who will ultimately use it. Different countries have different needs based on lifestyles, level of economic development and cultural norms. The more broadly-based your product is, from the design to the brand name, the more likely it is to succeed. Conversely, be prepared for a smaller market share if your product is specialized or specific. There's nothing wrong with a geographically smaller market, as long as you're prepared for that in the cost model.

Know global regulations & standards. Technology and environmental standards will vary in every country. For example, standard voltage will differ from country to country as will units of measure. If you are planning to sell globally, it is necessary to take these country-compliance factors into account when it comes to the cost model. Otherwise, the landed price could be too close to your margins. Know the rules in every country you have a distribution plan and either incorporate universal design principles, or work with adapters that will allow the product to function everywhere you plan to sell it.

Know global compliance requirements. Copyright law and patents are not the only things to worry about in product protections. Some countries prohibit the importation of certain products in order to protect their own domestic industries. And for bringing your manufacturing to them or choosing supply chain partners, some countries require government approval in order for you to operate within their borders, or if you're going to be working with local partners. Do your homework before deciding on a course of action.

Know who and how it will be distributed. Often in the United States, if your product is carried by one of the big box stores, your distribution has been largely handled. But many countries have primarily smaller regional chains or independent stores. And some of them, like India, for example, have large, remote areas that are serviced by one-person retail operations. You'll have to be familiar with all of this and figure out how to get your product out after you develop it and whether or not the price you have been planning will be adequate.

SC
MR