Published by MBA Skool Team, Published on August 16, 2016
Entrepreneurs with the new concept of the product or they are trying to tap into entirely new market with different technology and idea of product will have question in their mind that, Whether they should pitch in the customers that idea of their product is good and they must accept it future or they should convince the customer to buy the product with the actual prototype?
The dilemma for entrepreneurs is that how much amount they must have or save for producing the prototype of the product? And if the gets rejected how financially stable they must be to invest in the research and the development of the product. It is important to know the pros and cons for pitching in for the concept and prototype of the product.
Starting with the seller’s point of view, it can be advantageous to them if they are convincing the buyer for the concept of the product. If we talk about development of some different technology (an idea of innovative pumps and dispenser in the packaging of the personal care products), there buyer can be a high end personal care industry or a retail customer. Pitching with the idea will help the entrepreneur to save the time and resources they will put in producing the product. If the idea gets rejected by the buyer they can save the sunk cost which also reinforces their bargaining position. It is quite possible that, intellectual property protection is not flawless, and uncovering an idea at its early stage forces a much more serious danger of confiscation. For innovators, a patent gives solid assurance. If we take an example of script writer for a movie, a complete screenplay would better guarantee copyright security on the grounds that the plot, exchange, and characters are greatly improved characterized.
Furthermore, "the risk of offering the thought to the purchaser's opponent diminishes the present purchaser's motivation due to the thought that the monopoly benefit is much higher than the duopoly", this lead to lose the purchasers. Therefore pitching the customers for the fully developed product will be more advantageous for the seller in many ways. First one is that protecting the idea from getting used by the competitors. Secondly, selling the product idea in the maturity stage will give the seller a confidence of getting accepted because it will be more refined. Third is securing your position and ties with the buyer, if the buyer is not able to understand the idea of the product he will definitely going to reject the idea and selling the same idea to other buyer will end up losing present and potential customers for the products.
So, it is important for the seller that first to make the strong customer base, this can be made by with the help of the prior success and with the quality of the product and idea proposed by the seller. In today‘s market consumers are very much quality observable, it does not matters that whether the product is old or its new innovation, it does not matters that the service and product provider is well established company or a start up, he sale of the product, idea and technology depends on the quality and convenience for the customer to use it. So, sellers must go for pitching of fully mature concept of the product or if possible prototype of the product because it will give the seller the benefit of grabbing the sellers attention.
The other idea for new comers to gain more buyers and make the base for company is to make alliance with the already existing and well settled sellers, this will help the sellers in two ways first they don’t have to pitch in the buyers personally to buy the concept because they have their one of the trustworthy seller backing the new concepts, so less chances of rejection will we there, it will help the seller to establish themselves in the market in minimum time. They will easily be able to catch up for the new buyers.
Now, understanding the buyer’s perspective. It always a challenge for the buyer to try new thing be it idea or a fully developed product. It is good that if an idea is in its earlier stage, the buyer can also give inputs according to their pain points so that the product and be developed according to the needs of the consumer making it perfectly suitable but this consumes a lot of time of the buyer as well as various costs are involved in the development of the product the fixed cost, the variable cost and the opportunity cost, all of these get wasted if the product is failed.
Few other costs are also involved if the buyer goes with concept of the product, these are the legal cost. Its risk for the buyer to directly use the product idea because it will have the theft of infringement of the copyright of any product and services idea. Buyers must be cautious about not making such mistakes. On the other hand if the they are fully developed product or the mature concept (which involves how the idea is developed, the process involves in manufacturing the product, its estimated financial need and etc) will give the buyer the confidence of making the investment in the project. This may be a barrier for the inexperienced or new sellers. But providing a service and product which satisfies the consumer’s needs makes the base for the sellers and their future in the market. Offerings that consumers can never rejects, will give the seller of taking risks of tapping into new market with some different idea and the concept. The best offerings provider will be the best strategy for the start ups, offering that gives the confidence to buyer to invest; this can only be possible if the seller is pitching the buyer with the prototype of the product which they are going to offer not with the underdeveloped idea or concept of the product.
This article has been authored by Simmy Nigam from IIM Raipur
Views expressed in the article are personal. The articles are for educational & academic purpose only, and have been uploaded by the MBA Skool Team.
If you are interested in writing articles for us, Submit Here