by Brian Gates, Design My Idea President at Design My Idea

What is a competitor and how do I find them?

A competitor is a competing product that offers similar benefits or features to your proposed idea. So, for sake of argument let’s say we have developed a new writing device called a Marker. Now our product has many benefits:

• Great for handwriting
• Great for coloring or artwork
• Creates large clear lines
• Has very few parts

Now one thing I did leave out is the price of the product. Our marker can be made relatively cheaply due to the limited number of parts. However competing on price alone is extremely difficult for a new product unless your invention is an improved way of manufacturing the device. So it is best to leave the price benefit out of consideration at this point.

With our list of benefits we can begin to search for competing products. So our first search might be for handwriting tool. In those results we might see a pencil, pen, mechanical pencil or mechanical pen. Each one of these devices has its own set of benefits as well its drawbacks. We want to note the benefits of that product and the shortcomings. In addition we want to know the retail price.

We would repeat this searching process using our remaining benefits, each time noting what we have found. In these other searches we might find a mechanical pen with three different inks or a fat pencil which produces large lines.

With this research we can answer the question, “Do you have any competitors?” Which is great but the next question is where our research pays off. “Ok, so what makes your product better?” We now can point out the short comings of the existing products and explain how our product is superior. By knowing what is great about our competitors we can position our product so it plays to our strengths rather than competing on the same level. Every company, licensor and customer will ask these questions as some point, the better you can answer these questions the better your product will do.

Great, so we know why our product is great but how do we determine our price point to make the most money. This comes back to the retail prices we collected. The general rule of thumb is that there is a markup of 4 to 5 times the manufacturing cost of a product for retail. This means we can use the retail prices we have collected and work backwards to figure out the ideal manufacturing price of our product in order to be in the same retail price range.

Armed with this information you have established a clear list of design requirements for your product and a target manufacturing cost. It also proves that there is a market for our product, even though our solution is unique.

Do you need help achieving this? Consider signing up for an NventNode account. NventNode will guide you through out your entire development starting with competitor research. Use the list of suggested starting points for research and then store your research in NventNode for quick reference. There is even a tool to automatically calculate the ideal manufacturing cost. Sign Up today at www.nventnode.com