Prior Planning Prevents Poor Performance

by  Martin L. Hammond, Ph. D.

Well, maybe yes, maybe no.

In high ticket, high tech markets, customers buy what they think they need to get a job done. When their order rate is high, they buy more stuff, and when their order rate is low, they buy less stuff. The question is: Why should they buy your stuff?

Sometimes suppliers do know more about their customer's requirements than the customers do, but often they do not.

Keys to Success

Many people think the following equation is correct:

(Capability)(Desire) = Market Success

This equation is only true in the limit where the organization understands the Target Market and its Market Requirements, and where the Market is aware of the capability.

A better equation is:

(Capability)(Desire)(Meeting Market Requirements)(Market Awareness of Capability) = Market Success

The so-called marketing axiom, "If we build a better mousetrap, they will buy it.", is highly misleading because it depends on two unstated assumptions:

Meeting Market Requirements = 100%

Market Awareness of Capability = 100%

In the mousetrap market, the Meeting Requirements part is fairly easy (eliminate mice), and shelf space in appropriate distribution channels will probably take care of Market Awareness.

Markets outside simple consumer items are much more complicated.

Successful Product Development in High Tech, High Ticket

The 18 cardinal steps of a successful product development are:

1. Understand current and future market requirements.
2. Confirm your understanding of these requirements regularly with key customers.
3. Make sure you will be able to make the product with adequate profit before you get very far down the development path.
4. Demonstrate feasibility on the hard stuff first. Don't invest in the easy stuff until you are reasonably sure of success.
5. Confirm your cost and price projections regularly.
6. Understand your value proposition and test it regularly.
7. Make sure the product meets requirements before you start manufacturing in quantity.
8. Be clear about what you are selling and why someone should buy it.
9. Create awareness of the product (and the company)
10. Create differentiation of the product with respect to its competition.
11. Create preference for the product.
12. Test your success in creating awareness, differentiation, and preference using outside resources.
13. Develop a target account list and pursue it with knowledgeable people who have or can develop good relations in the target accounts. Use team selling techniques.
14. Make booking forecasts monthly and regularly review forecast accuracy.
15. Convert booking forecasts into a factory build plan through a consensus forecast.
16. Get the order!
17. Meet the performance, reliability, and quality requirements, on-time and within budget.
18. Make sure you are taking care of business: market presence, sales effort, booking forecasts, bookings, order entry, material control, manufacturing, shipping, service, records, and finance.

Success requires knowledge, effort, inspiration, and energy.

Develop your plan and go for success!!!

‹‹ Martin L. Hammond, Ph. D. [About the Author]