“Some entrepreneurs prefer to stay in the direct market and don’t move beyond farmers markets. Others use this market channel initially and then move forward with the next stage of development in their business.”
Stenbraaten says that planning, research and a marketing strategy are key components in developing a new product.
“The first step in product development is research. What need does this product fill? Who is your customer? Who are your competitors with this product? What market is available for this product?”
As an example, she says, adding another salsa to the already crowded salsa market may not have much opportunity for success unless it is either sold as least cost product or offers a unique taste or ingredient compared to what else is available.
“It is much easier to be the second product in the market than the fifth,” says Stenbraaten. “Sometimes a competitor may have the market tied up and it may be difficult to get retailers to even stock a new product. Shelf space is purchased in some retail areas and can be quite expensive. So having a strategy for where to sell the product and what kind of places to place it can be keys to success.
“The more you know about your product and the market you’ll sell it in the less costly mistakes you’ll make. It will save you money and can save your business.”
Market testing is one strategy that businesses use when developing new products.
“This is where an Alberta approved farmers’ market can be a huge help,” she notes “You think you know a considerable amount about your product. Now verify it. This can be done by market testing it. How is this done? Well you can choose to develop a test amount of product and sell it in a smaller market or region that you intend the product to go. Sales of the product and the input from your customers will provide information that you can tweak the product if necessary. For instance, a dessert manufacturer discovered that Canadians prefer a less sweet dessert than Americans do. Adjusting the product to the preferences of the customers in the market provide more potential for success.”
For more information on marketing new products, visit the Explore Local/Biz info website at www.explorelocal.ca or call 310-FARM (3276) and ask to speak to a new venture specialist.
