Feasibility Study: Testing the Market
While you may have a great-tasting product, you still have to test it in the marketplace. It’s one thing if everyone you know loves your muffins — especially, if they’re free. It’s something completely different to see if customers will buy them at two dollars a pop. The same holds true for your organic pickles, which you calculated should retail for about twelve dollars a jar.
This process of testing the market for your products is often called a feasibility study; it may take the following route:
This may involve evaluating taste, pricing, portion size, packaging, the label and even the sales venue itself.
Provide comment cards, send short online product surveys, or have a system in place where you can jot down or collect comments you receive from customers about your product. While some feedback may echo what your customers think you want to hear (not what you really want), other times it could highlight an issue, sometimes in a brutally honest way. If you have kids, they can make excellent taste-testers.
Besides reaching out directly for feedback, you can also explore incidental sources of information about your most promising markets. How are other food enterprises selling their products? Having some competition is a great thing, since that means there’s a market for what you want to sell. Evaluate each of the 7 Ps of marketing we cover in Homemade for Sale (product, price, place, promotion, people, partnerships and purpose) in relation to your competitors to determine how your products are different — and better.
Take what you’ve learned, by way of direct customer feedback or observing decisions made by your customers or the marketplace, and refine, modify or adjust your product and marketing accordingly. For example, did your blueberry muffins sell out in the first hour, but you returned home with your wild cherry version? Did a volume discount pricing strategy for your gift jellies allow you to profit more by selling a greater volume than if you sold them all one at a time at full price? Did a flavor sampler set sell better than a four-pack of the same flavor? In our case, with our Inn Serendipity Farm and B&B high-acid canned products we sell in Wisconsin at community farmers’ markets, we found great interest in our pickled pumpkin. Interestingly, the attractively packaged jars were largely consumed by people other than those who bought them. Read: a food gift for an Uncle Joe, “who would love it.”
Keep refining until you’ve reached a level of confidence before launching your product. Remember, you need to have a product that enough customers want and are willing to pay for at a fair price, to leave you with enough profit at the end of the day to make it worth undertaking.
(4) Product Launch
Finally, synthesize your testing, feedback and refinement into your final product and implement your launch campaign.
Keep in mind, however, that change is constant. Customers can be fickle, follow trends and fads, or have tastes that change. One year, gluten-free is the rage; three years later, it’s sugar-free or low-sugar. In most cases, even though your feasibility study may reveal solid products to market, it’s always possible that market conditions will change, a new competitor will show up across from your booth or some of your key customers will move away.
The food industry, especially specialty food products, can be cyclical and very sensitive to economic booms and busts. By their nature, many of these food items are perceived as impulse purchases. A breakfast of chocolate croissants is not the same thing as a hearty spaghetti dinner in the eyes of many, even if both cost about the same.
Be realistic, flexible and adaptable with your products and marketing and you’ll do just fine. And keep listening to the needs of your customers. They might just point you in the direction of the next great thing.