Now that you’ve put in all of the hard work in researching, designing and testing your newly adapted product(s), you’re ready for the big payoff – time to launch them into the market and bring in the revenue!

But before you pop open the champagne, you need to make sure you stick the landing on this launch. So what do you need to do to get it right?

Read on for an outline of the steps to a successful launch, and a summary of the whole product adaptation process.

This article series explores the four general stages of product development:

1. Innovation
2. Design
3. Testing
4. Launch or commercialization

This article will focus on Stage 4: Launch or commercialization!

Organizations launching new (or adapted) products may start in a few selected markets with a small run of product, and a sales and marketing campaign that will monitor product uptake. This initial sales data can be used to determine whether to proceed with more production, to increase both domestic and foreign markets, and to expand the sales and marketing program.

Want to learn more about tailoring design considerations and policies to suit customer preferences? Check out the FITTskills Product Development online workshop!

10 Practical Steps for a Successful Product Launch

1. Start early: Begin outreach activities six to eight weeks before the official launch date to maximize opportunities for coverage.
2. Make the product available to influencers: Offer the product to existing customers, prospects or bloggers with online presence to garner early reviews and articles.
3. Brief industry analysts: Promote your product early in the process and present a compelling case for your offering.
4. Create buzz online: Use social media to generate interest with strategic “coming soon” and “sneak peek” posts along with photos or video to build interest.
5. Plan a low-key release: The official launch date could simply be when the product is available to customers, rather than a splashy launch event.
6. Have a rolling release: Publish regular content about the product, its benefits, case studies and reviews to build momentum in sales and marketing.
7. Grab their attention: During the release cycle, do something unusual that will make people talk about the product, such as a witty video, a clever infographic or a publicity stunt at an industry event.
8. Involve partners: Have your marketing team engage with stakeholders who will benefit from a successful launch (such as your distribution channel) to encourage the informal promotion of the product, and spread the word about the product release.
9. Make it easy for customers: Offer free trials, downloads, product videos and demos so consumers can learn more about the product.
10. Focus on meaningful engagement: Rather than focusing on a general social media audience, connect with the users who are talking about your product and explore how they might promote it within their social circles

The development and commercialization of totally new products is very risky, even when an unmet need is identified. It may require a significant investment of resources, but if carried out well it can also reap significant returns.

With a totally new product there is no ability to ride the success of an existing product platform. A new product is launched and initiates the very beginning of a product life cycle. All aspects of the global value chain need to be carried out, generally on a small scale, increasing in scope with the growth and success of the product.

Elements of Product Development and Adaptation Processes

There are other product development and adaptation processes that can be used. Typically, they include the following nine steps, although some variation in steps may occur depending on the organization’s products.

9 Typical Steps in Product Development and Adaptation

The emphasis and resources spent on each of these steps will depend on the characteristics of the organization, the product type and the market. Although the ability to screen out ideas will depend on the quality and nature of information collected, research is separated here as a distinct stage to highlight its importance.

Organizations should not underestimate the value of primary market research in the early stages of development and adaptation.

It is at this stage where the processes of product development and adaptation start to strongly align with the marketing function of an organization. It is through talking to potential customers that ideas for new and adapted products can start to be narrowed.

Figure 1.4 – Core Elements of Product Development and Adaptation – originally published in FITTskills Products & Services for a Global Market ebook.

Check out the rest of the product adaptation article series:

1. Innovation
2. Design
3. Testing

The post Revitalize your business through product adaptation: Stage 4 – Launch appeared first on Trade Ready.

In a challenging economy, agile businesses are the ones who come out the winners. Adapt or die, as the saying goes. This article series explores the four general stages of product development:

1. Innovation
2. Design
3. Testing
4. Launch or commercialization

This article will focus on Stage 2: Design!

Once you’ve made the business case for adapting your product to a new market or niche, and passed through the heady innovation stage, it’s time to get to work on the development of your adapted product.

Want to learn more about tailoring design considerations and policies to suit customer preferences? Check out the FITTskills Product Development online workshop!

The Stages of Product Development and Product Adaptation

Product design is much more than the appearance and function of the actual product. It incorporates all product features, including labelling, packaging, design and colour, and takes into consideration culture, regulations and shipping, as well as sales and marketing. Product specifications must comply with regulatory requirements and suit the consumers in the specific markets.

Adaptations to product features have implications for production costs, sales pricing and consumer acceptance.

As a result, the 12 product features should be reviewed as an organization considers developing a new product or adapting an existing product, including:

1. Sizes, weights and measures

What is the standard size of similar products in the foreign market and how does this impact complementary products? What is the standard unit of measurement and does the size deviate from how the product is currently packaged? For example, in Ecuador, beer is most commonly sold in 1-litre bottles, which deviates from common North American packaging conventions. Apparel and footwear sizing also differ dramatically around the world.

2. Packaging preferences

How many units are commonly sold in a package in the target market? What material is preferred in the packaging (e.g. cellophane, plastic, paper, glass)? What level of protection needs to be provided? Protective and uniform packaging can reduce the costs of distribution by facilitating packing for shipping and reducing breakage.

3. Labelling

What regulations must products comply with pertaining to language and labelling requirements? Must labels include ingredients, allergen listings and nutritional facts? Should they state the contents of packaging and product origin?

4. Pricing

How are comparable products priced in the target market? The product to be introduced must be priced competitively and appropriately. A lower-priced product targeted for an exclusive or high-end market may be negatively perceived as being less desirable or of lower quality.

5. Logos, branding and messaging

Should company names, brand names and trademarks be modified for the target market to ensure the logo or trademark will not offend consumers when translated? Modification can also ensure messages are appropriate to the company and the product conveys the same or similar meanings in the language of the foreign market.

6. Quality

What are the regulatory quality standards to sell your product in the target market? What are the cultural assumptions and expectations for quality in your target market? Does the product perform the function it is designed for and does it meet customer expectations? Quality can be a function of commercial viability, current market status or the nature of those supplying the market, i.e. part of the brand and image of the manufacturing exporter.

7. Preferred purchasing method

Where do consumers typically go to purchase similar products? Are they bought locally in markets, in shopping malls, online or at specialty shops?

8. Regulations and prohibitions

What are the pertinent regulations, restrictions and policies concerning import and export controls in the country of production and target markets? These will include regulations governing the recycling of packaging materials, ingredients subject to import controls and prohibited substances. For example, there are strict regulations prohibiting the sale of alcohol in some Muslim countries. Products such as perfumes and mouthwash could include alcohol as an ingredient and should be adapted to be sold in the target market.

9. Design

What are the design preferences of the consumers? How can function be improved through design? The meanings associated with shapes, colours and presentation vary extensively from culture to culture and within demographic segments of the target market. In addition, preferences specific to the target market will also determine the design of a particular product.

For example, a coffee set sold in the U.K. will include a creamer, while sets sold in other parts of Europe will not because Europeans prefer to drink black coffee. Utensils such as knives, forks and spoons are used predominately in Western cultures, whereas chopsticks and rice spoons would be the preferred utensils in Japan and South Korea. Shape, appearance and colours are features that can also apply to packaging as well as the actual product. Japanese consumers’ desire for beautiful packaging has led exporters to redesign cartons and packages specifically for this market.

Design can promote sales by adding value and utility for the consumer. Design policy must also justify manufacturing costs, such as tooling. For example, design might use detachable parts for assembly to allow for standardized packaging and packing that could reduce transport costs.

10. Materials

What are the restrictions, prohibitions and preferences of consumers in the target market? Import regulations will detail materials restrictions and prohibitions, such as ivory. Material preferences will vary depending on the product, regulations, supply and consumer preferences.

11. Engineering

What is the purpose of the product and how will it be used? What are the required product specifications for regulatory compliance for health and safety? The way products are used and ease of installation (if applicable) must be considered and researched carefully. Products must meet the technical specifications and standards of the country. These standards can include power systems, metric measurements and product safety standards. Products are required to meet legal requirements for health and safety, as well as satisfy both industry and consumer quality standards. The technology used must be suitable for the selected market.

12. Warranties and services

After-sales service will give many global companies a competitive advantage. Many companies offer 1-800 hotlines, Internet-based help, low-cost upgrades and extended warranty packages. It would be worth investigating the warranties and services commonly offered for similar products in the target market.

Executing Design Standardization

Whether an organization decides to sell standardized products or adapt products for different markets, there are certain common characteristics that all products should have.

They should be:

• Suitable for the purpose for which they are intended
• Efficient, safe and reliable
• Devoid of features that may offend the customer
• Attractive
• Compliant with all regulations in the target market

National standards may influence consumer tastes, even if those standards are not legislated. Standards can be set by the members of an industry, by the designer or by the consumer. Product designers sometimes work with highly restricted specifications. In the case of large industrial buyers, restrictions may be less technical and more directed by price. These buyers often take an active role in the design activity.

Product design can also address critical supply chain cost drivers. Designers need to balance price as the main purchasing motivation while maintaining product quality.

The quest for better value and lower manufacturing, transportation and inventory management costs may result in:

• Reuse of compatible components from earlier designs
• Uniformity of packaging for more efficient packing/ containerization and handling
• New, cheaper substitute materials
• New methods of manufacturing

Not only does product design meet the needs of the market and the consumer, some changes offer cost benefits for manufacturers.

Administering Design Policy

Design should assist sales promotion by introducing comparative advantage into the product. A product’s comparative advantage might be embedded in a technological advance, increased durability, better value for money or another distinction that will be perceived as a benefit to the consumer.

Organizations should develop a product policy that blends product and services in order to market the most profitable competitive advantage. Such a policy includes the evolution of product lines parallel to existing equipment, human resources, liquid assets, commercial viability and customer goodwill. If the comparative advantage will be short term, it must be offset by outstanding support service to position the product in the marketplace before the competition arrives with similar lines.

For international trade, policies may have to be made to accommodate individual foreign markets, where standardization is not feasible.

It is important to examine the motivation of buyers and include their priorities in any design policy.

Motivation can be either rational, such as convenience, economic benefit or ergonomic advantage, or it can be emotional, such as colour, sex appeal and trendiness. Industrial buyers with strong leanings toward the rational can also be influenced by emotional appeals, especially when products offer similar features at similar cost.

For international trade, the motivation for buyers in each foreign market needs to be assessed.

Check out the rest of the product adaptation article series:

1. Innovation
3. Testing
4. Launch or commercialization 

The post Revitalize your business through product adaptation: Stage 2 – Design appeared first on Trade Ready.

When businesses face hardship, either due to market forces, missteps, or force majeure, there are two ways to proceed. Stanch the bleeding and focus on existing products and markets being served – or buckle down and find a way to reinvent your brand, offerings, and consumer base. For those eyeing option number two, adapting products to reach new areas of demand requires research, ingenuity, and resilience.

Here’s where to start.

The Stages of Product Development and Product Adaptation

When entering a new international market, organizations may develop a new product or adapt an existing product to guarantee regulatory compliance and ensure their products remain relevant to their consumers.

To determine whether to pursue either of these options, organizations need to assess the market based on research findings and identify and analyze opportunities. Should they decide to proceed with developing or adapting a product, the general process begins with generating and scoping ideas and determining whether they represent feasible and profitable opportunities. Once a business case has been made, organizations begin the formal development process, designing the operations or production process required for full scale production, testing the product and finally launching into the new market.

The four general stages referred to in different product development models are:

1. Innovation
2. Design
3. Testing
4. Launch or commercialization

In this 4-part article series we will cover each aspect of product adaptation, starting with Stage 1:

The Innovation Stage

An approach to managing the product development or adaptation process has been put forward by Peter Koen from the Stevens Institute of Technology.

Koen begins with the front end innovation stage (also referred to as the fuzzy front end or FFE). This is the period in which an opportunity has been identified, but before formal product development begins.

The stage includes tasks such as strategic planning, concept generation and pre-technical evaluations.

These activities tend to flow in an unpredictable, unstructured and often chaotic manner. Despite this, it can be a valuable stage, as the analysis and testing often lead to a successful product development activity.

During the front end innovation stage, market research is used to understand the influencing factors; this can be the catalyst for idea generation and idea screening. Once a product concept is generated, a decision is made on whether this concept is feasible and merits further investment of resources.

Want to learn more about how to evaluate customer response to new offerings with concept testing, prototypes, test marketing and product tests? Check out the FITTskills Product Development online workshop!

Koen outlines five different elements that pertain to front end innovation:

1. Identification of design criteria: Criteria and guidelines are discussed and decided.
2. Idea analysis: Identified ideas are explored in the context of the business and related implications for the company. Some market testing might be conducted to understand how/if the concept will translate into a solution for the end user.
3. Concept genesis: An idea becomes a concept, through an incremental and iterative process, which is either formulated internally or externally (e.g. through a specific customer request or the availability of a unique material from a supplier).
4. Prototype: If there is a strong business case for the development of the concept, there is generally a decision to pursue the creation of a prototype of the product.
5. Product development: A formal business case is developed based on factors such as available market share, customer requirements, required resources and competitor analysis. This is often treated as the first step of the formal product development process.

Although there may be iterative and less formal processes during this front end or pre-development stage, it is still critical to establish quality early on. Filter out flawed product strategies in the early stages of product development to avoid costly consequences at a later stage. Quality should be measured both quantitatively and qualitatively.

Ensuring quality in front end innovation

Focus of innovation stage: Idea screening

Focus of innovation stage: Business case

Best Practices for Front End Innovation

• Senior management is committed and involved in early stages.
• Business executive champion is identified and involved in early stages.
• Work culture is collaborative and encourages knowledge creation.
• Communities of Practice are established to share, acquire and develop new knowledge.

Stay tuned for parts 2-4 of the product adaptation article series:

2. Design
3. Testing
4. Launch or commercialization

The post Revitalize your business through product adaptation: Stage 1 – Innovation appeared first on Trade Ready.

A product’s stage within its life cycle influences the need for product development and adaptation. Organizations selling products internationally to multiple markets need to know exactly where the type of product they sell is in the product life cycle, for each different market.

This knowledge, combined with research on competitors’ products, current regulations and market demand, will help determine whether they need to adapt a current product or develop a new product before entering a new target market.

In many cases, products need to be changed before they can be introduced into new markets. Depending on the life cycle stage, this may involve marginal changes to product labelling or packaging, or involve alterations to design and functionality.

For example, infant car seats have reached the maturity period in North America, but the pioneer period in China. A French manufacturer looking to expand into the U.S. may need to adapt its product based on regulatory differences, as well as on competitors’ products, trends and consumer preferences. It may need to considerably differentiate its product to break into the competitive American market, and perhaps even look at developing a new, cutting-edge car seat.

To establish sales in China, the manufacturer would also explore whether regulations would require adapting its seat, but would face far less competition and lack consumer feedback. It may wish to conduct surveys or focus groups, and it may need to change its packaging to outline how car seats reduce injury and death.

Product Life Cycle

For a product at the end of the life cycle, organizations could consider the shift away from quality and toward price as a product’s underlying technology becomes commonplace and imitators enter the market. To reduce its costs, an organization may need to adapt its product to include cheaper components or require less labour to produce. Companies will continue to offer a product only as long as they can do so more cheaply than their competitors, and no alternatives emerge to make the product obsolete.

Learn more about regulatory compliance and getting your products ready for global markets, check out the FITTskills Products & Services for a Global Market online course.

Should you adapt your product, or is it time to let it go?

Organizations must also consider whether it is worth investing resources in adapting or developing a product if it is at the end of its life cycle. Many obsolete or marginal products linger in the market until their inability to generate profit becomes too hard to ignore. Such products may:

• Involve expensive, short-run production as demand declines or becomes sporadic.
• Take up an inordinate amount of management and sales time.
• Project an image of a non-progressive and technologically backward company.
• Delay new product development in hopes that things will improve.

Before eliminating a product, the organization must assess the overall international value of the product to the company, as opposed to simply monitoring the product’s performance in individual markets.

Products should not remain in the international market simply because a few overseas markets still want them. Product elimination procedures and controls, such as a product review committee, are more significant in international markets than domestic ones since the company may have many markets, products and modifications to consider. In addition, the international marketer may need to consider product elimination from the exporter’s viewpoint (one production source) or the multinational viewpoint (several production sources).

There are exceptions to every rule – including the product life cycle

There are some products that transcend the product life cycle, normal economic models and consumer trends.

Customers expect standardized products to be the same for various reasons. Luxury (also known as Veblen) goods may have a special cachet, a brand affiliation or an image that infers a certain status to its owners. Think of Louboutin shoes or a Porsche automobile. Some of these products can hold or even increase in value over time. The sales of luxury products would lose customer value if they were widely available and the price lower.

Customers may also want a standardized product to eliminate uncertainty. For example, a McDonald’s Big Mac hamburger is the same worldwide. Products with specific technical functions, such as a tape measure that uses a standard unit of measurement, are the same wherever that standard measurement is used and function for as long as the product lasts.

The post How understanding your product life cycle should influence your product development decisions appeared first on Trade Ready.

The evolution in online business has opened up new opportunities and new business models that are becoming increasingly popular. And for a reason. If you’ve been considering scaling up your business to take on global online sales, you may be wondering about the best way to source, manage and distribute products. What if you could produce and sell products “without having to invest in machinery, equipment or specialized product knowledge”? Contract manufacturing may be an option for you to grow your business.

Entrepreneurs and businesses of all sizes are leveraging the power of contract manufacturing to get their own custom products manufactured quickly and sell into global markets. Now may be the perfect time to get to know more about the many benefits of contract manufacturing for companies of any size, even for those with limited resources.

Product design, production and distribution

Contract manufacturing (CM) is a form of outsourcing between a manufacturing firm (known as contract manufacturer) and the hiring company to produce a finished product or parts. Usually, a company has two options. They can invest and purchase the machinery and factory to make the product themselves or hire an outside company (i.e. a CM) with already-established production lines to make it for them.

Contract manufacturers can handle many aspects of product development, production and distribution:

• Manufacturing and assembly of your product
• Design and engineering of your product
• Quality Control
• Management of your orders
• Management or consolidation of the supply chain
• Planning and coordinating shipping and logistics

The benefits of contract manufacturing

• Cost savings
  • Outsourcing your product to a CM means not having to waste capital on any maintenance and operational costs of tools, machinery, and equipment.
  • A CM lifts the burden of hiring, salaries, wages, HR, and benefits for the operators.
• Allocation of resources
  • The costs one can shave off can be allocated to other vital areas such as your marketing budget.
• Shorter lead time
  • Hiring a CM will allow you to leverage a CM’s existing supply chain network and expertise to provide you with faster lead times.
• Quality
  • Reputable CM’s will have quality control processes in place throughout the production process to improve your product’s production quality.
• Advanced skill sets
  • Companies can supplement their lack of manufacturing knowledge by working with a CM. A good CM will have established connections with raw material suppliers and have a better understanding of producing your product.
  • Experience can include different types of materials and properties, tooling, production lines, quality and testing required to create your product as efficiently and cost-effectively as possible.
• Engineering & development support
  • Depending on the scope and size of the CM, a CM may be able to provide you with development and engineering support to get your project off the ground.

Who needs a contract manufacturer?

While it’s true that large business partnerships seem to get all the attention, contract manufacturers can work with a business of almost any size. As long as you have a product, working with a CM is an option worth considering.

Large companies have the capital to invest in their very own production lines, so why do they often avoid this option? Simply put, setting up a factory requires a huge investment of time, money, resources and unnecessary risk. When billions of dollars are on the line, larger companies know they should be focused on activities that generate revenue.

It’s no coincidence companies like Apple, Nike, Black & Decker and are marketing powerhouses, and they allocate their resources on branding, innovation, and the constant churning of new innovative products and designs. They recognize that their core strength rests on innovating the next big thing.

Who can benefit from a contract manufacturer?

• Startups
  • Most businesses can benefit from working with a CM, including startups, which can take advantage of leveraging the resources of CMs without over-straining their own sometimes limited resources.
  • Developing an early partnership with a CM is a great resource considering they can act as an extension of your team from the development side of your business.
  • A CM can help develop and build a product more efficiently and economically and supply the extra boost that will allow you to launch your product quicker to the market.
• Companies looking to improve quality
  • Good CMs will have time-tested quality systems in place. If you have quality issues then you may want to consider switching to a CM.
• Companies looking to improve overall efficiency
  • Contract manufacturers have the resources, knowledge, and services that can improve your overall supply chain.
• Companies looking to improve their profitability
  • Factories work on economies of scale and are not set up to produce small quantities – a problematic situation for companies looking to launch a few products to test the market. For a company to achieve economies of scale, it is necessary to work with a CM who has the existing clients and vendors using the same or similar materials.
• Companies looking to scale up production
  • A company that is growing quickly will need a CM that is able to absorb higher quantities. A CM should be set up in order to scale up production during peak times or during a time of growth from the client.

The contract manufacturing process

After vetting and selecting the appropriate CM, the hiring company and CM will sign a contract to have the CM purchase and manufacture the products for the hiring company. Some of the details that should be covered in the agreement include:

• Manufacturing the product
  • The CM carries the responsibility to produce the hiring company’s product as well as coordinating any subcontractors of subcomponents and raw materials.
• Volume
  • The number of units purchased by the company from the contract manufacturer.
• Pricing
  • The price per unit based on the agreed upon volume.
• Quality
  • The quality conditions agreed upon between the company and the CM.
  • The CM supports the quality specifications established by the hiring company. The CM will utilize its quality procedures to carry out the requirements set and agreed upon between both parties.
• Lead time
  • A time mutually agreed upon to complete the order. A schedule should be included detailing the time the order is placed to the time the order is ready for shipment.

A CM can manage the supply chain for your products

• Managing the order
  • The CM will bear the burden from the day the order is placed to track, manage, and provide the hiring company with project updates.
• Orchestrating the supply chain
  • The CM will be responsible for coordinating the production and final assembly of the project along with all the vendors.
• Logistics
  • The CM may be contracted to take on the distribution and shipping plan and coordinate the logistics for the hiring company. This includes arranging everything from the freight of the product to the nearest port, warehousing, and shipping delivering the goods to end customers.

Entrusting the drawn-out process of manufacturing to a CM helps free up the hiring company’s resources and budgeting. This means more resources can be allocated to the most crucial part of any business – sales and marketing.

Weigh the risks, but consider the benefits too

The decision to hire a contract manufacturer may seem a little daunting as it transfers responsibility away from the company, however, the rewards can outweigh the risks, if it’s done correctly.

Carefully vet and perform due diligence on all possible contract manufacturers prior to making the switch. Perhaps most importantly, the best results come from forming a relationship based on trust and a long-term approach.

The post How you can use contract manufacturing to grow your business appeared first on Trade Ready.

Alibaba, China’s e-commerce giant, is synonymous with delivering affordable products with little uniqueness, leading to a market saturated with products that offer little innovation and low margins.

Offering low product costs might be tempting, but it may not be the best choice when brands are operating in a fast-paced, dynamic consumer market and consumer behavior is steadily shifting towards personalization and customization.

Stay ahead of the pack with product evolution

To stay ahead of the fray, many consumer goods companies know they need to do things differently. One of the best ways is by creating new products. Here are a few reasons why:

1.  Allows you to differentiate yourself from the competition
   • Only you can sell that product.
2. Higher margins
   • You can charge a premium because your product is unique to your brand.
3. Keeps your company and brand alive
   • Launching new products is the lifeblood of any consumer goods company.
   • Avoid succumbing to your competitors by delivering upgraded or better performance products that can compete more effectively in the market.
4. Market opportunity, value, and customer loyalty
   • New products provide consumer goods companies the opportunity to offer more value to new or existing customers while opening new market opportunities.
   • Developing new product lines help increase customer loyalty. Adding new products or iterations of existing products allows companies to sell more to existing customers.

Successful product development is a multi-step process that requires a product development plan and expertise ranging from market experts to engineers and manufacturing professionals.

6 major steps are required to bring your product idea to life

Step 1: Product design and engineering

Product engineering is the first and most critical step in the development process. A product will only be as good as it is functional. This step sets the course for the following phases. Contracting the work to a product design company, industrial engineer or contract manufacturer is suggested to stay lean. The critical elements of your search should include:

• Have they designed similar products before?
• Is their lead time acceptable?
• Can they make the prototype or does a different company do that?
• Are they reasonably priced?

Step 2: Proof of concept

Proof of Concept (PoC) checks the functional aspects of your product and ensures your product works as intended. Testing will be performed to emulate the product’s function in the real world.

Step 3: Product design and renderings

Renderings can be made before engineering to give a general idea of the product’s look. The design can be modified if it is not functional. Typically, product design begins after the functional elements of the product have been tested.

Step 4: Golden sample

The golden sample serves as the final sample to assess mass production and will be an exact copy in terms of material, finish, colour, and function to what will be produced during mass production.

A golden sample allows you to confirm the costs of your product, along with packaging and shipping. With costs in hand, you may refine your pricing strategy by marketing to distributors and retailers, crowdfunding your campaign, or creating marketing materials to start driving awareness and hype for your product. The feedback you gather should give you a ballpark on the number of units to produce.

You may use the samples for marketing purposes, however, don’t forget to provide your supplier with samples as well. These samples will be critical to develop and record product quality.

Step 5: Tooling

If you are developing a new product, you will likely need to invest in your tooling. You may speak with suppliers about tooling amortization and factoring tooling into your price. You may also ask if they offer an investment program.

Depending on the raw materials needed, tooling may be required to ensure product consistency. The main cost contributors to tooling are:

1. Production line
   • Plastic injection molding and die-cast are the two highest investments.
   • Other processes may require tooling but are not as expensive.
2. Type of steel used.
   • Different types of steel may affect the number of slots a tool may have, which can affect the overall life-expectancy of a tool.

Plan your lead times, including those for tooling. In general, plastic injection molding and die-cast tools take roughly 30 days to complete.

Step 6: Production

The first round of production will likely be longer due to tooling and raw materials testing, known as the pilot run. A small percentage of the first Purchase Order (PO) is made to ensure the production runs smoothly. The first production run is shipped to the customer for final approval. Once approved, mass production may begin.

Consider the services of a professional contract manufacturer

Making the choice to go into developing a new product might seem complex, and for good reason. There are many aspects to quality product development. The good news is that there are professional contract manufacturers who can partner with you on product development and guide you through the processes of launching and scaling up production of your product.

The post Why global traders should develop their own products appeared first on Trade Ready.

Exporters will never have a perfect product. Their products will always be at the mercy of competitive pressures, changing market preferences and emerging new technologies. Success depends on understanding and anticipating change through continual improvement. Developing products for new international markets is a continual process.

Staying competitive and increasing sales in international trade means investing in new product development and product adaptation. This investment ensures products meet the regulations, needs and expectations of the new markets, better positioning the venture for success.

New product development for foreign markets

In international trade, product development refers to the creation of new products specifically designed for foreign markets. Product adaptation refers to the redesign or modification of an existing product to meet the needs of one or more overseas markets. This includes any customization required for the consumer.

The steps to develop a new product and those to adapt an existing product are fundamentally the same, with only slight differences. Although product adaptation can be simpler since an elemental design already exists, adaptations must also be designed, employing the same rigour and strategies used when designing or developing a new product.

Product development and adaptation is the continual process of bringing goods to the marketplace as products move through their life cycle, such as replacing discontinued products with new or adapted products.

Different types of products can serve different purposes:

• Innovative products are a means to enter an existing market
• Additions to existing product lines supplement and expand options for consumers
• Improvements or revisions to an existing product line can improve market share and re-engage past consumers
• Repositioning products allows companies to target new markets
• Product development and adaptation can be used to reduce production costs and sometimes reduce prices for consumers when a similar product can meet the same needs at a lower cost

Using market research to make the right decisions for your products

Organizations selling products internationally to multiple markets need to know exactly where the product they sell is in the product life cycle, for each market. This knowledge, combined with research on competitors’ products, current regulations and market demand, helps to determine whether they need to adapt a current product or develop a new product before entering a new target market.

In many cases, products need to be changed before they can be introduced into new markets. Depending on the life cycle stage, this may involve marginal changes to product labelling or packaging, or involve alterations to design and functionality.

For example, infant car seats have reached the maturity period in North America, but the pioneer period in China. A French manufacturer looking to expand into the U.S. may need to adapt its product based on regulatory differences, as well as on competitors’ products, trends and consumer preferences. It may need to considerably differentiate its product to break into the competitive American market, and perhaps even look at developing a new, cutting-edge car seat.

To establish sales in China, the manufacturer would also explore whether regulations would require adapting its seat, but would face far less competition and lack consumer feedback. It may wish to conduct surveys or focus groups, and it may need to change its packaging to outline how car seats reduce injury and death.

When introducing a product into a foreign market, an organization can choose from several options:

• Sell the product as is, with no modifications or changes
• Create modified versions of the existing product, each one aimed at a different market. For example, modifying products for safety and functional requirements like power requirements that need to change from 110 volts to 220 volts
• Incorporating locally induced differences into product offerings, known as “glocalization”
• Create new products for different markets
• Modify the services accompanying the product to better accommodate market requirements

The mode of product introduction will depend on the information gathered about the target market as well as market intelligence findings.

Want to learn more about how to establish a competitive advantage with the best design options for adapting products? Check out the FITTskills Products & Services for a Global Market online course.

When is product adaptation necessary?

Occasionally, modifications to products or processes might not be necessary. The company might be able to export the same product and use the same processes as it does for its domestic market, as in cases where the company:

• Deals with customers who want a product because it is the same in all worldwide markets, such as jeans, records, photographic equipment
• Supplies generic components for export without modification, such as tires or computer chips
• Produces a unique product that is sold based on its status or foreign appeal such as brand-name luxury items
• Produces a product that is sold exclusively on a commodity or price basis, such as iron ore or wheat

In other cases, intelligence gathered with research will indicate that a product is unsuitable for a market and cannot be modified to make it suitable.

In some markets, companies have no choice but to adapt a product before exporting it. Climate and geography are perhaps the most fundamental factors – for example, cereal must be sold in foil packaging in humid climates. Adaptation may also be necessary due to legal requirements, tariff structures, taxation or other types of government regulations that affect components, raw materials, technical specifications, product standards, quality control, brand protection, testing and approval procedures. For example:

• Perfumes sold in the Middle East cannot contain alcohol
• Germany’s beer purity regulations forbid the sale of beer containing anything but water, hops, malt and yeast
• Fertilizer formulas must be adjusted to match soil conditions in the importing country

Some product-market mismatches might be eliminated over time. For example, many Asian countries do not commonly use milk or milk products, but this could change with the right product and marketing approach. However, such an attempt would likely require a lot of time and investment and would have no guarantee of success.

Research and the resulting product adaptation processes are not a one-time project. Applying market intelligence should be a process of continual improvement.

The relationship between market research findings and production operations is crucial for maximizing product life cycles and to build upon product platforms, enabling the successful development of products for new and existing markets.

The post Why exporters will never have a perfect product and what to do about it appeared first on Trade Ready.

• New product that opens an entirely new market for the company and meets a new consumer need
• Product modification that improves the product, engages new consumers and re-engages existing consumers in the market
• Product that replaces an existing company product
• Product that significantly broadens the market for an existing company product
• Existing/old company product introduced in a new market
• Existing/old company product packaged in a different way
• Existing/old company product marketed in a different manner

Product development and adaptation is a continuous process. It requires full liaison between the manufacturer and the agent or end user to ensure the product meets market requirements and profitability is maintained.

In seeking to satisfy new markets, companies have several options available, including:

• Selling standardized products as is, i.e. the same product and promotional message
• Modifying products for specific safety and functional requirements, e.g. for some countries or regions, product power requirements may need to change from 110 volts to 220 volts
• Designing entirely new products for foreign markets
• Incorporating locally induced differences into product offerings, known as glocalization

Different types of products can serve different purposes. For example:

• Innovative products are a means for companies to enter an existing market.
• Additions to existing product lines supplement and expand options for consumers.
• Improvements or revisions to an existing product line can improve market share and re‑engage past consumers.
• Repositioning products allows companies to target new markets.
• Product development and adaptation can be used to reduce production costs and sometimes reduce prices for consumers when a similar product can meet the same needs at a lower cost.

With these goals and strategies in mind, here’s 4 of the many examples of how adapting products or developing new ones has paid off in spectacular fashion for companies worldwide.

1. The evolution of the razor

The cartridge safety razor was first introduced in the 1960s. These razors were a popular and cheaper alternative to the electric razor introduced in the 1930s. Made from moldable plastics, the cartridge razor contained a disposable, replaceable cartridge head. Each cartridge generally held two blades and would slide on and off a straight plastic handle. This version is the basis for today’s disposable razor.

The cartridge of a modern safety razor generally has three to five blades, with lubrication strips on either side of the blades. The handle is contoured to fit the hand; some vibrate, while others have a ball in the handle and a flexible cartridge to better glide over facial contours.

These product adaptations have taken the simple safety cartridge razor to a higher-end product without losing the usefulness of the first simple model.

2. So much more than just “a coffee”

Consider the American coffee company Starbucks. The service provided by baristas making and customizing Starbucks beverages for the desires of individual customers is an integral part of customers purchasing the company’s products. In 2015, service generated USD 19.2 billion in revenue for Starbucks.

Starbucks entered the market offering a coffee shop experience. The company sells its signature fair trade coffee perfectly ground, brewed and served in their coffee shops all over the world. In 2016, Starbucks had baristas serving coffee in fifty countries. In terms of continued growth, it expects to have more than 37,000 stores by 2021.

Starbucks continues to innovate both in terms of its products and its brand experience.

Starbucks offers coffee-based drinks, such as lattes, as well as teas and smoothies. It also sells coffee paraphernalia, such as mugs, coffee beans and coffee makers. Customers can also buy food products. Starbucks uses these associated products to enhance its coffee service and offer more to customers with a “one-stop-shopping” strategy. Customers can go in for coffee and also have a snack or lunch. Starbucks has also expanded its home brewing by selling beverage pods for consumers using single cup brewing systems.

3. Going “glocal”: It’s the same, but different

In business, the term “glocal” describes activities that take into consideration both local and global concerns. There are many examples of brands that enter into emerging markets by adapting their products to local tastes, attitudes and values.

For example, McDonalds, a brand built on providing high quality beef products, has adjusted its menu in India, where the cow is considered a holy animal. Its localized menu items include McAloo tikki burgers (mashed potato patty) and Chicken Maharaja Mac with Indian spices.

4. Wait, you can do that? The future of manufacturing

A Dutch design company called MX3D is collaborating with a variety of partners, including Autodesk and the Amsterdam City Council, to 3D print a metal bridge over one of the city’s canals.

Designer Joris Laarman says the project will free the world to think about craft in new ways.

“I strongly believe in the future of digital production and local production, in the new craft,” says Laarman.

This bridge will show how 3D printing finally enters the world of large scale, functional objects and sustainable materials while allowing unprecedented freedom of form.

This is not the only project of its kind. In 2016, Michigan Technical University built an open-source 3D metal printer for under USD 1,000; and in the 2015 “Launch Tennessee Master Accelerator Program”, a startup called Branch Technology took inspiration from nature to develop 3D-printed walls for homes and buildings using a “cellular fabrication” process.

The post Learn to adapt your products from these 4 success stories appeared first on Trade Ready.

Products and services

• Are part of the product, such as a warranty
• Affect products, such as transportation
• Are part of the reverse supply chain, such as free delivery of product

The FITTskills Products and Services for a Global Market training course explores the continually evolving relationship between products and services, as well as how servitization can help you export your services.

The relationship between products and services

Provided on a global scale, these product-related services generate billions in international trade revenue.

Consider the American coffee company Starbucks. The service provided by baristas making Starbucks beverages is an integral part of customers purchasing the company’s products. In 2015, service generated $19.2 billion USD in revenue for Starbucks.

Starbucks entered the market offering a coffee shop experience. The company sells its signature fair-trade coffee, perfectly ground, brewed, and served in their coffee shops all over the world. In 2016, Starbucks had baristas serving coffee in 50 countries. In terms of continued growth, it expects to have more than 37,000 stores by 2021. Starbucks continues to innovate both in terms of its products and its brand experience.

Starbucks offer coffee-based drinks, such as lattes, as well as teas and smoothies. It also sells coffee paraphernalia, such as mugs, coffee beans, and coffee makers. Customers can also buy food products. Starbucks uses these associated products to enhance its coffee service and offer more to customers with a ‘one-stop-shopping’ strategy. Customers can go in for coffee and also have a snack or lunch. Starbucks has also expanded its home brewing by selling beverage pods for consumers using single-cup brewing systems.

Understanding how organizations can employ services to enhance their products is directly related to increasing a product’s competitive advantage through a ‘service-added competitive strategy.’

Many manufacturers are exploring the “servitization” of their products by reviewing production, operations, and ownership aspects of their products to move towards a service model. For example, in the United Kingdom, Finning Equipment has moved towards a service model where its equipment is tracked to monitor, maintain, and if necessary, replace equipment based on use and physical condition data.

How servitization improves customer satisfaction and increases profits in manufacturing

Servitization refers to the process manufacturing companies and other organizations undergo to develop the capabilities they need to provide services that complement their traditional products. As equipment becomes increasingly complex, customers need more service expertise than ever before. Manufacturers around the world are redeveloping their approach to meet the needs of their customers.

Servitization has grown to become a popular strategy for boosting both customer satisfaction and profits in the manufacturing industry.

Through the design process, the addition of services is a part of product development and adaptation. The servitization strategy is driving manufacturers to review their business models and consider service and leasing models instead of ownership models. This is very much in line with models supported by the circular economy movement.

Three key benefits of servitization for manufacturers

Manufacturers benefit from integrating servitization into their business model through:

• More effective solutions: Before servitization took hold, manufacturers simply sold products and services as an afterthought. Today, customers want a strong service program to complement the equipment they purchase. By offering service programs, manufacturers can play an active role in solving their customers problems, rather than just selling a product.
• Greater financial stability: The long-term service contracts that go along with servitization guarantee more secure revenue streams. Service contracts lay the foundation for customer loyalty and provide upselling and cross-selling opportunities.
• Increased customer retention: Some manufacturers report that servitization increases customer retention because it allows them to become familiar with their customers, their equipment, and their needs. The close relationship gives manufacturers the information they need to make their customers’ businesses more efficient.

These three benefits seen by manufacturers can help an organization understand how adding servitization to their service exports can help improve their service products to customers. With increased demand for additional benefits – including mobile management systems and responsive customer service – more manufacturing companies will start offering service contracts. By integrating service into their business models, manufacturers benefit from increased financial stability and opportunities to develop better relationships with their customers.

How does your organization keep its customers satisfied? Let us know in the comments down below. 

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Innovation has become a necessity for all firms wishing to continue their survival in this disruptive and competitive environment. But the process of innovation is much more easily conceived of than completed. So what is innovation, and how can a business set out to truly innovate?

Profits can poison the porridge

For some companies constant modernization and advancement just seems natural. In these companies and new innovations are developed regularly, while others are confined to riding the wave of the last innovation by making small product adaptations or branding.

What sets these companies apart, though? What is the “stuff” that exists in one but not the other?

The start of a new product is always an idea, but where do ideas come from? In the new season of ‘F is for Family‘ on Netflix, there is a scene in the boardroom of a Tupperware company which is facing a loss of market share through increased competition, and needs a new product urgently.

An idea generation session is organised among the board members and the result are ideas which are totally disconnected from the company’s target consumers. The discussion of new products in this scenario started from the need to make up lost ground in market share and revenue. One can’t help but compare this backwards approach to innovation to companies who failed in their quest to stay relevant (Blockbuster video comes to mind) by missing the opportunity to create something new.

In his TEDx talk, ‘The Art of Innovation’ Guy Kawasaki, Chief Evangelist of Canva suggests that the focus should never start with money, but rather meaning. The money will come after, once you understand what you want to achieve. He cites the examples of tech companies like Apple, which tried to bring computers to everyone, and Google, which tried to make information available to everyone. It is this vision of democratization which drove them. These are now two of the most profitable companies on the planet. But if profits were the only goal from the beginning, they may not exist as they are today.

Put the chef hats on the right people

The next question is – who should be involved in innovation? Are the board members the right people, or should this job reside in an R&D department? Forbes contributor Glen Llopis suggested that,

Innovation is not dependent on the participation of high-ranking executives, but on any employee that is a student of the business, knows their consumers and their specific need.

This makes sense because the employees are the ones engaged in production and sales and interacting with the customers. In many cases they are customers themselves. Llopis goes on to quote a Wall Street Journal article titled “Together We Innovate” which stated that most companies continue to assume innovation comes from the resident genius or small sequestered teams who retreat to a think tank and return with big ideas.

The article argues instead that “most innovations are created through networks – groups of people working in concert.” Chances are that a diverse group of people are more likely to generate unique ideas than a homogeneous group populated with people from similar backgrounds, education and life experiences.

Innovation does, however, require a certain type of person. Llopis describes them as courageous enough to take a leap of faith and follow it all the way through. Kawasaki supports this, adding that in the product development cycle there is a period when innovators need to shut out the naysayers, but as soon as the product is shipped they need to start listening to people and keep evolving the product.

Ideas and innovations can thus originate from anyone in the company who knows the business and consumer needs, but they must be courageous in seeing their ideas through. This also means that the leadership of the company needs to have some degree of trust in their employees. Llopis describes these leaders as ‘courageous enablers’ who take charge and embrace the role of a change agent in support of constructive disruption.

Finding clear blue water

The dream of most companies is to develop that product or service which has its own market space, often referred to the “clear blue water” around them. These products and services generate their own demand and have no close competitors. Companies may think that the only way to achieve this is through invention – developing something totally new. However, Llopis defines innovation as an idea that represents a communal adaptation or application used and embraced by the masses.

Oftentimes what is required for successful market entry is a public embrace of the benefits derived from products, rather than what they do.

If Uber saw itself as a taxi service it would be still be utilising licensed taxi drivers. Instead it saw itself as a transport company, and was thus able to introduce something new – ride share services. The real innovation was a mobile application connecting passengers to drivers for hire, resulting in a sharing economy which set the foundation for other companies like Airbnb, Kickstarter and Craigslist.

So, what is the “stuff” required for new product development or innovation? It would have to be the courage among leaders to trust and enable employees, and the courage among employees to see their ideas through to implementation. And it has to start with a good understanding of what the business means to people.

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