All
I will share this time with you my personal experience in introducing new products, and I hope most experienced importers/exportes also shed some additional comments on this topic.

First of all, I see the new product, I get the samples, taste it and have them tested by my current clients. If I get positive feedback, pretty much I am ready to move forward. This product has a decent packaging, complies with FDA label directives and the price is also attractive. However, there is a similar product already in the market, it has been the leader for many years, and commands a strong market share.
My first thought was to find out the pricing structure of the product leader. How much is sold at retail, find out reseller margings, importers margins, to have an idea the price of that product on the importer warehouse. After that, I did my cost structure, FOB price + Flete + Surcharges + Agent fees + Operating Expenses + Admin expenses. Found out that my cost was slightly lower.
So I have two choices, reduced severely my margins to compete on price with the leader, or presented as a high quality product and keep normal margins and heavy marketing.

I selected the second approach, extensive marketing, but could not make a significant dent on the market share, sales were low and could not finish selling the whole inventory. Ended up giving away the product to non-profit institutions and biting the bullet with a big loss.

Lessons learned
Any new product should be launched to the market gradually. First import a small amount, even your markup will be higher, the scope is not to make a profit on the product yet. The idea is to introduce the product in the market, and follow up its aceptance. As demands grows, the product will be imported in higher quantities.

Too risky to buy a whole container of a new product, and hope the pricing will be right. Also if product leader is losing market share, they have more financial power to reverse that by offering discounts and promotions. That's exactly what happened when I started giving discounts, the leader not only matched the discounts, even sold it at cost to keep me out of his territory.
You could have the best new product, but that's subjective. The market rules, if they like the product leader, they will stick to it, unless you give them an offer they can not refuse.
But also, you could find a way to do something with the loss. When I saw that sales were not catching up. I decided to give it away as a promotion on many events. Lots of people has tasted the products for free and have received positive feedback, looking forward to convey that social spirit on next print media ads.

Looking froward to hear from most of you regarding new products, and how they were introduced on the market.

Regards

Vicente Huaman

Replying to [Vicente]:Though I do not have the experience ,I also hope that you can get enough reply "How to introduce a new product on a market with a dominant leader".
Wish you succeed in this field

Replying to [Vicente]:It is always a fact that the first step to set up a business is the hardest, but that doesn't mean you cannot achieve it!

Below are some suggestions for your perusal:

1) What is the dominant leader's market, local or worldwide. If you cannot bit him in the local market, you can do so elsewhere, either online or globally;

2) Know their market: It is meant for everybody or only certain targeted market;

3) Their unique selling point, for eg. if they are selling it for general health, you can go specific for certain purpose. Afterall, with your own private label and packaging, it will become different products for different purposes.

4) Engage Trading agents to help market your products; very effective especially with new product;

5) If you intend to market it for (No.3) purpose, give better benefit to your retailers/resellers/agents and they will push your product ahead of others;

6) Don't spend too much on advertising or promotion. Afterall, you can never beat those big brothers who are financially strong. Instead of spending too much on that, sponsor certain occasions for your targeted markets;

7) Try to involve some reputated person. Of course, there is no such thing as free lunch. Involve them by giving them certain incentive. If you can't come up with the upfront amount, tell the person that you will give him certain percentage on every deals or sales. If it is on long term basis, the commision is much lower. I prefer this method cos' it helps on the long run by indirectly involving him;

8) If you have the ingredients, you can actually have the product produced at other cheaper source even if it means some oversea countries. Do you know that many branded items are designed in US, manufacture in certain countries with cheaper production cost (labour, overhead and currency factors) and then ship back to US.

9) To cut cost further, you can engage part-timer like students, housewives, retirees for many purposes ranging from desgining your packaging, website, and sales too;

10) Ever tried MLM, the fatest and cheapest way. A word of caution, it will eat up a lot of your time in the beginning stage, but it really worths your effort. See how those established international MLM. Sorry, no FREE advertisement

The 3 main factors is all about reduce overhead expenditure, marketing planning, execute them by sales.

These are the factors I have in mind for the time being, hope it is benefitial to all as I understand that doing business is difficult.

By the way, you lucky American, please refer to: http://www.score.org for professional guidance. It has a bunch of experienced volunteers giving FREE consultation. Its main target is to help you with the establishment of business.


LIFE IS A CHALLENGE, MEET IT!




It is common to kill off newcomers in the market to fend off extra competitors. It is cruel and mean but it is survival.

Replying to [oldie]:
Dear Oldie
I appreciate your comments, they are very positive because it is based on real experiences. Sometimes you learn the hard way, I did my homework, did my market analysis, and banked on my prices too much. As soon as I was taking some market share, they placed bigger ads on the same newspaper I used, sponsored more events that I could handle, so when I was out, they resumed business as normal. The products I introduced is a seasonal product, it sells a lot on Christmas time. This year, as I can beat them , I will join them. They acknowledged I have found and imported a great product, as I have the exclusive right to import that product into new Jersey, we will work together this time, and will be on a bigger scale.
I have heard before if you can beat your enemy, you are better of joining him. Hope this time around, no need to compete on prices, but find ways to introduce it to other market segments.

Vicente

Quoting from [Vicente]:


All

I will share this time with you my personal experience in introducing new products, and I hope most experienced importers/exportes also shed some additional comments on this topic.

Dear Vicente Huaman,

You have faced a problem which is common to all new ventures.Oldie has given really good ideas, which I wish to elaborate through examples, general and personal.

Colgate is undisputed leader in toothpaste market.Base upon theme of White Teeth,Strong Gums, its marketed everywhere.

New entrants have entered the market on themes of Fresh Breath and of Herbal content etc and taken almost 30% of market share.

When I launched Cieling Fans in India in 1986, I faced six entrenched brands, including Crompton Greaves, selling globaly.I had to sell directly to retail outlets, eliminating the distribution channels.

I gave 3% more margin to retailer than existing brands, kept my billing Ex-factory price 5% lower than those brands, yet my retail price difference was was lower than existing brands.

Backed by advertising campaign on air delivery and lower power consumption, my brand was accepted over a period of time.

Each product segment has its own salient features which can be exploited to your advantage, provided you can sustain yourself for the launching phase.

Sixer

Replying to [Vicente]:This is a really good and interesting topic for hands on knowledge. I hope more members will share their opnions and suggestion.

This is the time for us to learn from each other in this competiting business world.

Vicente, please let us know the outcome and progress of your joint-venture business.

Sixer, thank you for the kind sharing which I have just learned some new idea for my herbal coffee.

Quoting from [oldie]:


Replying to [Vicente]:This is a really good and interesting topic for hands on knowledge. I hope more members will share their opnions and suggestion.


This is the time for us to learn from each other in this competiting business world.


Vicente, please let us know the outcome and progress of your joint-venture business.


Sixer, thank you for the kind sharing which I have just learned some new idea for my herbal coffee.

Welcome Oldie,

I wish more poeple share their experience to enrich brother members.

Sixer

Replying to [Vicente]: Since you are very good at sourcing new item for your US market and you are worried about capital, this book by Don Debelak entitled 'The Risk Free Entrepreneur' is very good for your case.

I believe you can get from most book shop.

Replying to [Vicente]:Hello Vicente, Another idea would be to advertise in different states amd attend tradeshows in as many states as you can. The best way to win a client is to find out what your competition is Not doing and then focuson doing that very thing Great! or offer it with a new twist that would make you stick out in their minds. Sometimes price is not the winning factor but customer service. Call your clients as a follow up and find out what they have to say and most of all believe it and so it will be!!!!

Replying to [LilDragon]:Dear LilDragon
Thank you for your positive comments. I do have plans to grow nationally, but at this time I am focus on my local market and trying to improve my processes, so when I achieved that I will be in a position to leave my business with a manager (in Auto-Pilot) and pursuit new channels to generate more revenues. I will consider your suggestions then. I am also limited by Capital, what I think, and is part of my business plan, as part of the growing mission, only invest the profits that has been generated, in case something goes wrong, only the profits were lost (like having worked for free). But really thank you for reading the article and giving me sound advices.
Vicente

Replying to [Vicente]:

Dear Vicente

You have got a really good replies form sixer and oldie.

I would like to present a new approach. Rather then fighting with your competitor it is some times good to join hands.

You can do the manufacturing for him so that you can create a win-win situation. This will also give you a good enough idea about the product and the market.

With bulk production first you will be able to have a cheaper product which will further strengthen you position.

Lather you can negotiate with him in better way like go for combined branding.

Madhur Agarwal