Yesterday I found a video titled, “Selling New Products in a Bad Economy” on YouTube. I am not endorsing their new products but I think there is an overall message that should be gleamed from their product development strategy based on the questionable economy. If you have a 1 minute 36 seconds it is worth watching.

As you have seen (if you watched it) Giant A&M, a truck accessory company, has employed an aftermarket / add-on strategy of new product development.  This strategy is supported by their macro analysis of the economy:  Truck Owners -> Hurt by gas prices ->Want to spruce up truck ->  Can’t afford new truck -> Turn to accessories.  This hypothesis works fairly well for a truck accessory company, but a similar trends can be applied to many different industries.

Beware: I don’t agree with A&M’s claim that 60% of all purchases are impulse buys.  Perhaps that is the case in the truck accessory industry, but it doesn’t align very well with the overall analysis.  If the general population has less disposable income to spend on impulse buys, then they should be sharply decreasing.  Although impulse purchases will not disappear, I believe the acceptable price point will decrease too.  Generally, you want a great product to have impulse appeal through great packaging, design and point of sale displays but be careful spending your time on a new product that relies on the impulse buy selling plan.

Aftermarket / Add-ons: As I am sitting in my outdoor furniture, I am thinking of a way to make the seats more comfortable but not retain the dampness of the morning and rain (I am just using this as an example although it was a real idea).  Lets say that I developed a cushion and cover that met these requirements.  I could proceed to market selling the cushions as an add on or a whole new outdoor furniture chair incorporating my new cushion.  The whole new chair would require lots of manufacturing resources, take up more space in stores (harder to sell through) and take more time to market.  The add-on or aftermarket cushion would avoid these expenditures and competing with established outdoor furniture companies, but may run into other problems.  What outdoor chair do I focus on, they are different sizes, thicknesses and materials.  A past post may help with this dilemma Market, Design, and Technology oh My!

How do I make money with an aftermarket add-on? Often these products start in specialty retail / catalogue and online outlets. After some sales goals have been reached they move into the mass market (walmart etc). These products can be integrated with the whole chair through licensing the product to an outdoor furniture company. I could sell the components (cushion / cover) to these existing companies for them to integrate. I could sell the products through them as an add on for when customers are buying new outdoor furniture.

The outdoor cushion idea is merely an example. I assume that there are existing solutions to the issue, just none have made it to my backyard as of yet. If anyone has any suggestions, let me know.

Last Night I attended my first Inventors’ Association of New England meeting.  It was a great meeting and and interesting talk by Keith Bibby, “inventor for hire” and Professor at the University of Phoenix.  He talked about his experience innovating in the curtain rod industry and selling those products to / through Wal-Mart, QVC and Home Depot.  The buyer pitch was a main topic and the conclusion is that you have two minutes (max) to explain your product.  That isn’t a lot of time to sell your product that you have been working on for years, unless you compress it in an understandable format that buyers understand.  The suggested format was SWOT.  For more info on SWOT go to the Wikipedia Page.

The other major take away from the talk is it’s all about Wal-Mart. Wal-Mart sells approximately 14% of all retail and they are good to work with. They don’t ask for exclusive selling rights, they pass ‘earnings through savings’ back to you and are open to the smaller companies beating out the smaller ‘innovative’ companies.

As I look over my notes from the meeting, there were so many stories of successes and failures that it would take 10 pages to retell them so I will focus on just a few.

The PegBar was a cornerstone innovation in the talk.  It was a new product that was conceptualized (prototyped and then produced by) the shop foreman. Its creation led this company to expand their distribution network into QVC where Keith was doing pull ups on the bar at 2 in the morning.  Take aways: Moto: Buyer relationships are key, do what it takes for the customer.  The PegBar is currently being sold by McMaster-Carr, picture below from their website.

The second story that I would pass on is the Printed Curtain.  Keith had a curtain that had Blue cartoon character, (Blue the dog).  This product was well received by many stores like Bed Bath & Beyond and Wal-Mart but did not do well because of it’s price point.  During the development process, the inventor had agreed to exclusive domestic manufacturing and that forced the price of the curtain upto $12 while most other simple curtains are apx $3.  While the curtains did very well at clearance prices ($4) the consumers were too used to the existing price point to pay the high end price for kids curtains.