Week 6

As the weeks go on, my knowledge of how to market a product expands. This week we elaborated on four questions you ask yourself to see if you have the criteria for a good market. We continued our discussion on Phone-soap and applied these four questions to that specific product. Let's break it down. I am going to go through each step of the marketing process using Phone-soap, and then relating it back to our Smart Project.

Figure out your pain-point. This means that there is a "bug" or issue in this world that is relevant to our society and that is the purpose your product will have- to diminish the negative effects or to eliminate the obstacle altogether. For Phone-soap, the pain-point is germs. Germs are a way of life, but this company is trying to make your phone clean, for it is a product whose sanitation is often disregarded. For our smart project, OK TO DRIVE, we discussed that our "bug" is drinking and driving. This causes many accidents, injuries and deaths and my group thinks that this is a pain-point worth solving.

Next, we need to see if there is interest. We can do that in a variety of ways. The main way to receive information on the interest of your industry or product is through data collection. One way of collecting this information is through primary data. Primary data is information that is collected for the first time; used for solving the particular problem under investigation. Primary data is advantageous because it can answer specific questions related to a certain study in which secondary data could not answer already. That brings up the second type of data collection. Secondary data is data previously collected for any purpose other than the one at hand. For example, PRIZM, IBIS World and Marketresearch.com provide future entrepreneurs, and the rest of the business world, access to their previous findings. This can be extremely helpful because it saves the time and hassle of individualizing the data collected to that specific study when some of the questions could potentially be generalized. Some may ask what the demographic is in a certain area, or what industry is seen as most popular- this information would not change whether it was research taken for Phone-soap, for OK TO DRIVE, or for any other company trying to introduce a new product. This data can be collected in a multitude of ways. Popular ways of collecting data are through focus groups, open-ended questions, scaled response questions, and closed-ended questions.

After taking data about the interest of your product, it is important to look at the market. This has the same, if not more, importance as the product itself. If you do not have anyone to buy your product, then your company is worthless. It needs a market.

The first step to determining if you have the criteria for a good market is determining the size. Is your product potentially a Margin Business, or is it potentially a Volume Business? A margin business is an instance in which there are some people willing to pay a lot of money for a product. An example of this is people buying clothes at Nordstrom. The clothes are quite expensive there, but they make business by having a big enough consumer market, while selling their products for a high price. On the other hand, volume business is where a large amount of people are willing to pay something for it. An example of this is people buying their goods at Walmart. Walmart is cheap, but because so many people buy from there, they produce enough revenue to continue to be successful. For Phone-soap, this was a big concern for Mr.Wonderful. He said that there are not enough people in this world that are willing to pay for a product like this. He though that anal, clean-freaks would be attracted to this product, but simply stated that the market is not large enough. Without a substantial size of consumers, the product will go nowhere. For OK TO DRIVE, I ask myself the same question. Will there be enough people to invest in this product? Some may be reluctant to join forces with our OK TO DRIVE team, but hopefully safety of our surrounding communities will prevail.

The second step is to determine whether your company or product is identifiable and/or measurable. Is your product Business to Business sales, or is it Business to consumer sales? This is a huge question in determining if you have a good market, for it is determining what type of market it is in the first place. There are three different processes for each type of market. For B to B Processes, they are known as (1) New Buy, (2) Re-Buy, and (3) Modified Re-buy. This is referring to companies buying the product to use for their company instead of individual use. The company could either introduce a brand new product for use in their own business. They could re-buy a product that they are used to using and find as a necessity. And lastly, they could re-buy a modified product of something they already use. For example, they see the need for the product, but perhaps the brand they used last time caused problems or had defects, so now they are re-buying the product but modifying their purchase by investing with a new company. For B to C Processes, the three are known as (1) Routine Behavior Response, (2) Limited Decision Making, and (3) Extensive Decision Making. These are not as complex as B to B processes because B to B has to go through multiple channels of headquarters before investing in a product due to its effect on the company as a whole. It does not get as complex for an individual because it is not affecting a huge population by investing in a product. What type of market is Phone-soap? Is it B to B, or is it B to C?? Good question. Even the sharks on Shark Tank could not come to a unanimous consensus. Mark Cuban believed that Phone-soap would be the most useful if sold as a B to B product. He envisioned that Hospitals, schools, doctors offices, nursing homes etc., would be interested in using this product for their own profit. For example, a hospital would charge a sanitation fee and require patients and visitors to put their phone in the cleaning device as a way to promote a germ-free environment. Lori, another shark, disagreed. She believed that individuals would enjoy this product and could see it as useful. She would advertise the product on her go-to business, QVC, to sell to individual consumers. Phone-soap could go either way, but what is OK TO DRIVE's market? Is it B to B, or is it B to C?? From the start, we have determined this would be a B to B product. Although it may be complex, we find that it could be extremely helpful in businesses. Our main goal is to have Restaurants, bars, and event venues purchase this product and make it a policy to abide by through using their venue. After watching this episode of Shark Tank and seeing the controversy over B to B and B to C markets, I've realized that our rental of our product at a smaller scale, for house parties and one time events, would be considered B to C. For the most part though, OK TO DRIVE would be a B to B market.

Next we need to determine if that market is accessible. Now that you've determined who they are, how can you get your product to them? How can you introduce this product in their minds and make them want to buy it? This has a lot to do with the location of your market, and how you will disperse your product. Will you establish a website to sell your product online? Will you sell your product in the stores? How many stores and in what locations? These are the questions to ask yourself before jumping into the release of your product and company. For Phone-soap, Lori provides an accessible route through her advertisements on QVC. For OK TO DRIVE, this is where things become more complex. We would need contacts with authority figures, as well as event venues to get this out on the market. That is what is tricky about a B to B market.

Lastly, what is the response of your product? The value of your product determines what type of response you will get from your market. A big requirement of your product is that it needs to cater to the needs of the consumer. If you do not interest or provide a solution to a problem, then there is no purpose. With no purpose or need, you have no value. And with no value, comes a response that you will not want to hear.

These are four very important concepts to think of when determining if your market meets the criteria for a good market. A good market and just a plain old market are two very different things, and if one of these four criterion is not met, then you are less likely to be successful. This was very helpful for me to break things down step by step, and I hope that as the weeks go on, I can reflect back to this post to augment my knowledge of marketing concepts. It is especially important to connect ideas from the textbook, Shark Tank, and what we discuss in class, all back to our smart projects. Our smart projects are ways to get a hands on experience with these concepts and will help us apply these theories to experience.

Sorry it is long :)