Organizing to Sell New Products

When selling new products, managers are faced with problem areas that are unique for each product. Products have to be delivered to locations where consumers will be able to buy them. For some products this is complicated, but for others the marketing process is fairly straightforward. In any case, managers should gather the kind of information needed to fully understand and be able to choose the most profitable alternative. To start this process, managers must have enough information in all of the following problem areas.

 

Consumers—Convincing Them to Buy

Identify consumers

Who will most likely buy the product, how often will they buy it, what price they are willing to pay, and where will they be buying it? Consumers have specific wants and needs. Their incomes vary from high to middle or low. They are given choices of thousands of products, from luxury items to basic necessities. They have many different traditions and tastes, ranging from ethnic to generic products. Consumers affect production decisions every day.

Consumers are the final buyers and users of products. The intent of any business is to make and sell a product.

The manager must do the following.

• Make it in the form that consumers want.

• Make it when consumers want it.

• Sell it in places where consumers want it.

• Sell it at prices consumers are willing to pay. Managers have to get market information in order to make the following day-to-day decisions.

• What quantity of a product are consumers willing to purchase?

• Who is making those products, and who is competing for those consumers?

• What prices are consumers willing to pay?

• What is the speed with which products and information travel through the channels of distribution?

• How long does it take for a price increase to reach the producer?

• Based on this information, should production be increased or decreased?

Food Ingredients—Availability and Seasonality

Ingredients are one of the more important factors in maintaining a consistent quality, especially in food products. The producer must know where to locate ingredients at different times of the year, especially if they are seasonal. Proper storage and handling should be considered, as well as transportation and packaging. Costs of ingredients that change frequently can create problems when estimating production costs. This may require contracting for future delivery (discussed later). Seasonality of some produce will require purchases in different locations during the year. Products that require special handling, such as fresh meat or vegetables, present a different set of problems and cost factors. Also, shelf life of ingredients needs to be considered.

One very important thing should be noted: The only way to maintain consistent-quality products is to buy consistent-quality ingredients. This cannot be emphasized enough. People might be willing to buy the product once, and if it is of good quality, they will continue to buy it. However, if they notice a difference in quality each time they purchase it, they will cease to buy the product, and it will be almost impossible to get them to buy the product again.