DEVELOPING YOUR PRODUCT


PHILIPPA HANCOCK, TIGERS EYE RETAIL
Speech to the Craft Partnership Meeting on 3 September 2003

SECTION A

The most important key to successful product development is the thorough understanding of any retail organisation that you would like to produce for. This organisation is your primary customer.

Challenges, threats, opportunities of the retail organization - how this affects you What are the variables that would have a direct influence on the business- the uncontrollable and controllable forces such as technology, economy and rapid growth and acquisitions, e.g. due to the acquisitions within the Tigers Eye group, a branding structure has evolved in which four business silos are defined:

  • Flagship
  • Destination
  • Eco
  • Alternative

    These business silos have redefined the needs of the organisation.

    The decisionmaking process within the retail organization
    Try to get some sort of idea of who is directly responsible for what within the retail organisation. This should clearly show you the person/persons with whom you need to make contact with, and will save you a lot of valuable time in ensuring you are attempting to reach the appropriate person.
    E.g. There are specific Brand Managers/Buyers responsible for each of the different business silos..

    Flagship [Out of Africa, Tiger's Eye] - Gabi Dill
    Destination [Cape Point, Aquarium, Cango Caves, Hout Bay]- Alan Fisher
    Eco [Park's Shops]- Alison Graham
           [African Eco] - Philippa Hancock
    Alternative [Indaba lifestyle, Indaba Curio's] - Alan Fisher
    Kirstenbosch - Philippa Hancock

    You have to focus your activities on the needs of your potential buyer. This will require you to have a thorough knowledge of what determines these needs. You will have to try and get a thorough understanding of the buyer. The needs, demands and preferences of each buyer are unique, but there will always be similar patterns.

    Remember: Do your homework; you cannot be all things to all people, and you need to understand your potential target market, and position your product accordingly.

    SECTION B

    Once you have identified your target market within the organisation, and identified or made contact with the person involved in the decision making process, you will then be ready to develop your product or begin to put together your range/ranges.

    Research, Research, Research
  • Attend Trade Shows.
  • Keep up with, and study the trends.
  • Read, look, listen [magazines, books, shops, people in the industry].
  • Visit the store you intend to supply, chat to the staff, manager, customers.
  • Draw up a brief outlining your particular skills, services or products and if you are prepared to customize exclusive stock, hold stocks and your capacity to produce. Indicate your willingness to produce samples if necessary. Send to relevant people involved.
  • Your homework on what has not worked is just as important as what does.
  • During and after the development stages, it becomes crucial to constantly review your product. Now is the time when any necessary decisions should be made.

    Ask yourself these questions:
  • What are the unique properties that your product holds that is different to the competitors?
  • Have I tested my product?
  • Have I assembled a panel to review my product?
  • What are my packaging requirements?
  • Merchandising - How do I see my product in the store environment?

    Why do new products fail?
  • You don't target your products at the right market.
  • If you have not done enough market research, had no strategy, or not tested the product.
  • The product fails to live up to buyer expectations.
  • There is no competitive differentiation.
  • Product is not value for money.
  • If product cannot easily be obtained.
  • Your profitability is too low.

    SECTION C

    Your product is ready for the market place, but there are still a few final processes to finalize.

    Marketing instruments
  • Your product has to deliver what it promises. It must be more than it seems.
  • You need to ascertain the packaging requirements of the organisation you wish to supply. Depending on the industry, the requirements are different. e.g.: Woolworths will have different requirements to Tiger's Eye. The average tourist has very limited space in his luggage, and weight is at a premium, so heavily boxed or bulkily packaged items do not generate good sales.
  • You need to develop your p.o.s material, brochures, catalogues and merchandising stands.
  • Your after sales service is very important: how you are going to monitor the stock and sales in the store, and your replenishment strategies.
  • Staff training if required.

    Pricing decisions
    Customers are less price-sensitive when they perceive the product or service as unique. They are less price-sensitive when they cannot directly compare similar products.
    Costing will obviously vary with different levels of production. A product's average cost per unit and the price to cover that cost varies with quantity produced.
  • Always monitor any competitor's prices.
  • Decide on your price objectives.
        (a) Maximum profit objective
        [b] Sales volume objective

    Find out if your buyer covers any of the product development costs such as digitising or screens. If not you need to absorb those costs into your pricing structure.
    Find out your buyers mark-ups on products.
    Find out what settlement/volume discounts your buyer expects [usually either a cash discount for settlement within a specific period, or a quantity discount based on number of products purchased.]