PRODUCT DEVELOPMENT FROM THE GROUND UP IS NOT NECESSARILY THE BEST PATH
As a full-service product design and development company, Catalyst has had the great privilege of working with thousands of corporations over the past 20 years– developing products across diverse industries at every market price point. Our proven methodology has resulted in the development of countless breakthrough products and new market categories which have proven to be a successful solutions for our clients, and their customers as well.
Occasionally, clients approach Catalyst looking for “the next big thing” to reinvigorate their product offerings. Or more importantly, product concepts that can capture market share and regain profit margins. When such product ideas are indeed generated, the immediate concern turns to the timing necessary to hit retail plan-o-grams, trade shows, patent applications or other mission-critical milestones. Many times, this appears to be the only option being considered by some clients to create “new” revenue. Ironically, on closer investigation, Catalyst often finds that the company already has strong products selling on the market–and selling very well. Yet, due to increased labor and material cost, component or manufacturing inefficiencies, or distributors/retailers pushing cost reductions, these clients have lost considerable margins on traditionally successful products. This array of contributing factors works to erode the bottom line quickly and influence knee-jerk decisions to “reinvent the wheel” and begin new product development from the ground up.
HOW TO RECAPTURE MARGINS AND MARKET SHARE ON EXISTING PRODUCT DESIGNS
In these scenarios, Catalyst often recommends “optimization through innovation” to refresh existing product lines. This approach is a completely focused/targeted exercise in which our cross-functional team represented by marketing, design, engineering, manufacturing, and management review every aspect of the client’s existing product. Similar to new product brainstorming, concepts are generated in an effort to target the brand strength across other vertical markets by reducing costs and creating new cost-neutral features and benefits. This provides the company with new opportunities to discover and introduce updated products with innovations and higher margins. Additionally, this activity is often completed at a comparatively lower capital expenditure versus creating entirely new products from the beginning. The key advantage to this process is a reduced time to market which allows quicker returns on a smaller development investment.
If the agenda of your next corporate meeting includes a discussion of products or categories that carry disappointing profit margins, consider offering an alternative solution of optimization through innovation. It represents an effective way to introduce a better product, with reduced costs, while saving product design and development budgets for more involved break-through innovations in the future. A true Win-Win-Win in the Catalyst sketchbook!