How do you know if your new product idea is going to be successful? Is it possible to maximise the chances of success – and minimise the cost of finding out – before you’ve invested in everything you need to launch? Identifying your product-market fit can be vital.
I meet many start-up food businesses with exciting ideas for their products. They might even be in the process of developing or prototyping it, but they have limited experience in the food industry. In some ways, it’s an advantage when it comes to creating something new or tapping into emerging customer needs or trends. However, that likely needs to be balanced with some experience launching new products and brands in the food or drink sector.
Who needs your product?
You might have a great vision for your product. Perhaps it’s something that satisfies your own nutritional or dietary needs, or it’s something that friends and family love. However, if you want to scale up to retail or make significant ecommerce sales, you need to establish a product-market fit.
You need to be confident there’s a strong market demand for it, that enough people will need it, repeatedly buy it and recommend it. If that’s true for your product, and they’ll pay a price that enables you to produce it profitably, you’ll be in a better position to execute your plan and invest time and money in making it a success.
Do you have a good product-market fit?
There are a handful of fundamental questions to consider when thinking about product-market fit. If you answer ‘no’ to any of these questions, you probably need to revisit your product, its proposition and commercial viability. It doesn’t mean it can’t work, but it probably doesn’t make sense to invest too much money until you have a solid foundation to build upon.
- Does your product satisfy a clear and significant market need?
- Would retailers be interested in your product?
- Would consumers understand it?
- Do your costings allow for you – and retailers – to make a profit?
- Is there room for this product in the category?
- Does it match current consumer and market trends?
- Will customers buy it regularly?
- Does the product have ‘word of mouth’ potential?
These factors all have a fundamental impact on how you go to market and, indeed, whether you should go to market at all.
Comprehensive research
The process involves comprehensive research, starting with an examination of market trends in your specific category. We examine what people are eating and on what occasions. What ingredients, flavours, formats and packaging are appealing to consumers? Are there health or nutrition trends in the category that we could align with?
We then take a deep, detailed dive into the competitive set – both direct and indirect – and explore pricing, packaging and ranges. What were they doing? Who were they targeting? Who is doing it well, and who is doing well?
Is there a gap in the market for your product?
This is a crucial piece of research. It allows you to start seeing where your brand might fit and where there is a natural gap. It directly informs the process of defining the opportunity for your brand – including positioning, offering, USPs, and the key reasons why your target customers should trust your brand.
The session where we report back is always packed with food for thought and things that prompt you to take action. We make recommendations about the viability and opportunity of the product, as well as identify some tweaks or adjustments that increase its chances of success.
If you’re at the point where it would help to understand how your idea fits into its market, watch the Relish webinar or get in touch with any questions.
