How to create success in the toy and game world
Entrepreneurs love creating and launching products for kids. Many invent toys, games and juvenile products that are innovative and address a need in the marketplace, but they all face challenges that threaten their success. What is the magic behind inventing and launching a successful product that will appeal to kids?
However unique a product idea, the magic to success in the marketplace is in fact the hard work of thoughtful product development and market planning. An inventor often falls in love with their new product concept, convincing themselves without any research aside from approval by friends and family that their new product is a sure-fire hit. Blinded to the harsh realities of developing, launching and selling a product that is well equipped to compete, decisions are often made about how to design, package and promote a product without a strong understanding of the marketplace. A product not only needs to appeal to the buyers for retail stores to gain a place on store shelves, but also must attract the primary users (kids) as well as purchasers (millennial parents) who will buy it. Predicting the success of a new product is complicated by many factors, but a methodical approach to developing and marketing a product can provide better odds for success than the oft cited 85% failure rate for new product introductions.
These steps provide a guideline for new product success. For each step along the way, a Go/No Go decision should be made to make sure your product is ready and meets strict criteria before you move to the next phase.
- Competitive Analysis Do your homework on the competitive set to validate your product concept. A thorough competitive analysis should identify all competitors in the product category and include analysis of features, price points, packaging style and POP (point of purchase materials). Please don’t fall into the trap of thinking your product is so unique that it has no competition. Many inventors see their idea as one-of-a-kind, but every product competes with other items to gain real or virtual shelf space, and to get a potential user and/or purchaser to take the item off the shelf or to click on details on a website for a closer look. Does your product have something unique and special that separates it from the pack? What type of play value or appeal will engage users with your product? Is this clearly communicated in all of your messaging and visuals? Only move forward with the idea if your analysis shows your product is clearly differentiated and has appeal with your target audience within your category. If not, take what you have learned and go back to the drawing board to refine your product idea.
- Market Research Conduct research along the way as you develop your product among the intended age group. Show a final prototype to learn key likes and dislikes for your product from the intended users. Define the primary purchaser and primary user. Who are they? How old are they? What level of educations and household income do they have? What type of products do they use and play with? What features do they want in a product and what type of messages will resonate with them? Show your product idea to friends, neighbors, your children’s friends, a local youth group in concept boards or as a working model. Gain feedback on your concept at all stages of development to insure that it is designed for your intended users. Conduct market research to learn how your key target age group will interact with your product. Determine if the product design or rules need to be changed to make the product age-appropriate to your primary user group.
- Product Design and Manufacturing Create a prototype and obtain estimates on how much your product will cost to design and manufacture to understand a product’s hard costs, as well as to project the retailer’s wholesale price and consumer’s retail price. If the product costs are high within the competitive set, then make changes to your design to get to the right cost parameters, evaluate other manufacturing alternatives or consider options to increase your sales forecast to lower hard costs. Once a works-like/looks-like prototype has been made and meets safety regulations as well as a child and parent criteria for product functions, cost and design then move ahead to the next step.
- Distribution Where will you sell your product? Online? Mass Market or Specialty Retailers? To learn about how your product might be received at retail, prepare a sales sheet and pitch your product to local retailers. Show a mock-up of the packaging along with the product and the suggested wholesale pricing. This allows you to obtain valuable feedback before you spend money manufacturing the product and packaging. Retailers can provide insight on the packaging, pricing and point of purchase materials. Gather information on the selling of your product to help you make better decisions on product features, packaging and pricing.
- Financing Create a P&L to identify all costs for developing, manufacturing and selling your product. Project forecasts to estimate sales and determine a break-even for your product. This can be a final Go/No Go level. Do you have the financing you need to manufacture, warehouse, sell and promote your item? If not, this is the time to determine how you will obtain the funds you will need to develop and launch your product. Will you need to seek money from investors, or explore alternatives such as licensing the item to another company or using a crowd-sourcing platform to launch your product?
Spending time evaluating the marketplace, researching your concept with potential users, purchasers and retailers, gathering cost information for product development and manufacturing and taking a critical look at your P & L is time well invested to bring an innovative, product idea to market.
ProductSmart Blog Archives
- SHOW TIME! Five Keys To Pitch Your Product Line to Buyers January 4, 2017
- Five Key Steps to Developing and Launching Products for Kids and Their Families November 22, 2016
- Playful Learning Prepares Kids for the 21st Century June 8, 2016
- Four Steps to Success for Your Trade Shows November 17, 2015
- Women in Toys Rocks Dallas October 26, 2015