Craft Product Development in the Adirondack North Country

Artisans and craftspeople, in Crafting for Business by Wendy Rosen, 2004, are recommended to create new product lines equivalent to one third of their total product lines each year. Shopowners also need to change their product lines on a regular basis.

Below are generic and industry specific questions and a listing of programs, procedures and services related to product development which may help you to identify some new product lines and/or variations within product lines. As ANCA finds more industry specific product development procedures for the artisan and shopowner, they will be posted on this page.

Market Segmentation

What possible new products or services could be developed for existing or potential customers?
Who is your target market? Describe people in your market (e.g., female, male, age, group, job).
What benefit is your market seeking from your product? Do different groups seek different benefits? Describe each group.
Is there one group of customers that uses your products more extensively than the others? Describe them.

Developing Your Product

What does your product do for your customer? What does it not do?
Could people not now using your product benefit by using it? Who are these people?
Can you think of any ways your product features could be improved or made safer?
At what stage of the life cycle is your product? (Is your product known, are competitors coming in, is competition fierce, profit margins low, sales volume declining?)
What choices are there available in the market in your product area?
What are the exclusive features and benefits of your product?
Does your brand name describe your product? Is it easily remembered, distinct, proven, reliable? Can people differentiate your product from its competitors?
Is your product easy to understand and use? If not, can you help customers overcome reluctance to your product?

Pricing Your Product

What are your pricing objectives? Have you determined whether to price below, at, or above the market?
What are the industry pricing standards?
Can you offer trade-ins, free accessories, or free service rebates?
Do you offer deferred billing, discounts for cash payments, or early payment?
How do market forces affect your pricing strategy?
Are you influenced by competitors' price changes? What does the competition charge? Is there price cutting?
What is your average cost per unit? Have you set specific markups for each product? Do you set prices to cover full costs on every sale or do you have loss leaders?
Do you plan discounts for quantity purchases, special groups, or seasonal sales?

Distribution of Product (Useful to giftshop and studio owner)

Where and when do your customers want your product? Is it easy for your customer to locate you, purchase your product, and get information?
What alternate distribution plans do you have if your present suppliers fail to deliver?
What services are offered by your present suppliers? How does this differ from other suppliers?
How quickly are orders processed and services rendered? What are the consequences of delayed services?
How much inventory do you carry? What is the cost of carrying your inventory? What are the consequences of not having all the items available? Do you lose sales?

Retailing your Product (Useful to giftshop and studio owner)

Which items are bought on impulse? Are they easily accessible? Are the price tags easily readable? Do you know which of your items have unusual eye appeal and can be effective in display?
Can you foresee changes in the profile of your's shop/studio's neighborhood? Is so, what are they?
What is your plan for deciding what to buy and from whom?
Have you broken down your merchandise by departments or merchandise classification? Does it help your inventory control? Are you using a unit control system?
How do you keep track of the success of your buying decisions to aid you in next year's buying? Do you evaluate your supplier's performances?

Assessing Your Competition

Describe your customer.
Describe your competitor's customer.
Why would a customer buy from you? Not buy from you?
Why would a customer buy from your competitor? Not buy from your competitor?

The following questions are provided to help you answer the two preceding questions:

Describe your product benefits and weaknesses
Describe your major competitor's product benefits and weaknesses
Describe how your customer sees your product benefits in terms of quality level, style, options, packaging, etc.
Describe how your competitor's customers sees:
a) your product
b) your competitor's product
Describe advantages and disadvantages of your company and your competitor in terms of distribution and outlet location:
a) your company
b) your competitor
Describe your company's promotion capability in terms of advertising and media used, publicity, and special promotions.
How does your competitor differ in its promotion capability?
Describe the needed service and complimentary service you provide with your product? Who provides the service? (owner, employee, contract worker, etc.)
How is your service different from your competitor?
In relation to your company, what are your competitor's -
Sales?
Market share?
Profit margin?
Investment?
Production capacity?
Describe the critical factors that could upset your competitive advantages?
Could an advantage be gained from a change in -
Financial strength?
Technology?
Economies of scale?
Describe how your competitor is likely to react to a competitive change. Is it likely to:
Do nothing?
Lower its price?
Change its product?
Change its promotion?
Describe your major competitor's strengths and weaknesses
Competitor's strengths
Competitor's weaknesses
Describe your company's strengths and weaknesses
Your strengths
Your weaknesses
Based on your company's strengths and market opportunity, describe how you can differentiate yourself from your competitor.

Donald Cyr and Douglas Gray, Marketing Your Product, 1998, pgs. 41, 54, 63, 87, 92, 107.

Market Test Your Products

Build prototypes of the products you plan to make and check your market research by actually testing your products in the market.
Selling at a craft show gives you firsthand knowledge of customer's reactions to your products.
What do they think of the quality of your work?
Are your prices considered to be high or low?
Are they looking for work similar to yours but perhaps in different sizes, styles or colors?
Make prototypes using your existing facilities as much as possible. Once you have discovered what is going to sell, you can start building up a stock of products, set up the studio space, buy raw materials in bulk, and follow other production techniques. Do not put the cart before the horse and invest time, money, and effort in building up a stock of product for which there is no market.
Try to find your own particular niche in the market.
Look at what is selling in stores and craft shows.
Look at the quality and prices.
Concentrate on products that are in demand and that you can offer in a better design, quality or price.
Be careful to exhibit and offer for sale only your best work. If you are making production line crafts, one of the main skills you will develop is the ability to produce rapidly at a high standard of quality. But do not try to produce work quickly in the beginning. Be prepared to follow the market and produce work for which there is a strong demand. For those who produce work which is of consistently high quailty, follow the market to know what is selling and know where to sell, success is likely.

William G. Hynes, Start and Run a Profitable Craft Business, 1986, p.10.

Below are links to websites which describe some product development services, procedures, and programs.

Program - The Visiting Artist Program is an incredible opportunity to prepare for expansion into developing accounts nationwide:

Are you considering wholesale for your business? The Buyers Market of American Craft's Visiting Artist Program provides artists the opportunity to explore the wholesale marketplace before joining it as a wholesale exhibitor. With educational seminars, guided marketplace tours, and the opportunity to ask questions and network with Buyers Market staff, seasoned exhibitors and other Visiting Artists, the Visiting Artist Program provides the BIG picture of researching a wholesale show.

Just one of the workshops included in the Visiting Artist Program:
SATURDAY, February 17, 2007
How to Turn Good Ideas Into Great Products That Sell
11:00 am � 12:15pm
Join JoAnne Stone-Geier, product and trend guru, and author of the book Launch It!: How to Turn Good Ideas Into Great Products That Sell! to learn the basics of product development from product idea to product launch. You�ll learn the insider�s view on the various stages of product development and marketing and how to test whether your product is viable and, if so, how product trends should influence your product�s design and marketing.

Procedure - Listing of what is entailed in product development:

BoBella New Product Development services:
Marketing Plans and Fulfillment - We establish an action plan for positioning, promoting, distributing and marketing new or existing products; define and promote your brand to your customers/resellers, crafters, industry media, etc.
Project/Account Management - We become an extension of your marketing staff with professional support and timely communication, keeping projects moving forward and focused on your goals. We promote product sales through promotion and communication with your internal team, buyers and/or the media; identify, excite and involve industry partners.
Online Marketing - Through online competitive and industry environment research, BoBella will identify opportunities and assist in promoting your company through online and traditional marketing efforts. Product Name and Packaging Design - BoBella provides creative product names, writes packaging highlighting key selling points and creates appealing retail design (PC or Mac formats). We turn your new products into sales.
Craft Design - We support new product marketing and sales through craft designs, publisher placements and promotion to media. Publicity/PR - BoBella actively promotes your brand, product line or corporate initiative to the media. We establish placement of press information in trade publications, generate interest in your products/designs by media, create industry "buzz" regarding new or existing products. BoBella can write, produce, distribute and promote your corporate news and brand to media throughout the industry, to your prime customers and within your internal and external communities.
Competitive/Industry Research - BoBella will explore what is going on in the industry and with your competitors, identify opportunities for new products or re-positioning of existing products. (Content from BoBella New Product Development Services page)

Program

Juried participants of the Kentucky Craft Marketing Program and Kentucky Arts Council Visual Arts at the Market Participants are eligible to apply for a Product Development Grant. The purpose of the Grant Program is to stimulate the craft and art industry by providing financial assistance to craft businesses and artists to develop new products or prototypes for the wholesale marketplace or other qualified buyer. Application and information about the Product Development Grant is currently in the process of being revised. Direct questions to Nancy Atcher, Product Development Coordinator, at 888/KYCRAFT or 502/564-8110 ext. 486.

Procedure - brief summary of what is entailed in product development:

The business cycle for artisans and craft entrepreneurs. Product design process. Product design is an integral part of product development. It is an activity which can be done by either creative artisans or craft ... (pdf format)

Other craft business considerations which reinforce successful product development and increase profit margins:

Often the products are modified in order to capture a larger market. Sometimes traditional crafts are revived or new products are created from local design motifs. Consultants make sure that the new businesses can export their products. That means the workers must learn about quality control standards, build better equipment, learn faster and easier production methods and set realistic delivery schedules. (Excerpt from article)

Reinforces the importance of market research and good packaging and display to product development:

How To Guide on Craft Production (specifically for Newfoundland and Labrador artisans but good overall business overview)
Product development and design have suffered in the past ten years, because less emphasis has been placed on both, due to policy changes and reduced staffing. Several product gaps exist, including well designed and produced jewelry, blown glass and items reflecting the province's culture, heritage and environment. Tourists and residents alike want to purchase these products and when retailers cannot find them locally, they import them from elsewhere resulting in lost revenue and employment for this province. Another area where improvement is needed is in well-designed, good quality packaging and display materials. Retailers and consumers have emphasized the importance of making the product "market ready" with eye catching packaging, including background information on the craft and the craft person. (Excerpt from How to Guide)

Email inquiries and comments to:
Nadia Korths
Craft Programs Coordinator, ANCA
ph/fax:518.891.1632
28 St. Bernard St., Saranac Lake NY 12983
www.adirondack.org
www.AdkNCcrafts.com

Updated 12.11.06