Thursday, June 09, 2005

*** Step 3. MP - "Don't Bet the Farm!"

This is step three of the Marketing Plan series of posts. First, read steps one and two if you haven't done so already.

An explosion occurred in my office today. The ideas were billowing out of my head like that of a fire from a burning building.

I now have a new product in mind, and I'll be testing it within a new market shortly. Dealing with new territory or new products in your marketing efforts can be, well... "risky business."

That's why I say you limit all your experimentation to only 30% of your marketing budget. This means if you have two new products and want to venture into two new territories, you should only be allocating 7.5% to each. 30/(2X2)=7.5 If you're unsure about a new product you have (as I am currently), and what the response will be... test it, but don't bet the farm.

Face it. We're in the business to make money, and you can't make money without taking some risk, however I don't think risking everything which you've worked so hard for is a smart thing to do. Yes, if things begin to work you may allocate more money to these parts of your marketing plan (see "Embelishing Your 70% for Growth.") but doing so in the beginning is like putting your house on the line at the black jack table in Vegas.

Ideas are good. Explosions of creativity are good. New markets mean new customers. Hand in hand, new products mean new profits. It is necessary to develop and change with the world around us, but it also makes sense to try new things slowly and patiently, and in the meantime stick with what you know has created explosive growth for your bottom line in the past.


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