CONTENT

PART 1: Opportunity Assessment● Demand: Size of target audience on Google, Facebook, and Amazon● Supply: Competitive landscape ● Industry Research: Profit margin, unique vs commodity, consumable vs

one-time purchases, and trends

PART 2: Customer Research● Consumer Insights● Target Customer

PART 3: Positioning● Segmentation● Product Differentiation● Positioning

PART 4: Supply Chain● Find Suppliers● Sampling / Prototype● Negotiations● Packaging

OBJECTIVE

A foundational step in building a brand that is profitable and scalable begins with identifying the right opportunity. So how do you know that your chosen niche is one worth pursuing?

This opportunity assessment worksheet will help you validate your idea and avoid common, costly mistakes of selecting a category that’s overcrowded, overhyped, or simply lacking demand.

Our goal is to help you gather the right information, so you can see at a high level the market size opportunity for building and growing a sustainable brand - not just a product.

APPROACH

We love data. Our approach is to take the platforms that we plan to advertise on, like Facebook, Google, and Amazon, and reverse engineer the process. On these platforms we first mine for data. Is there an existing audience that want your goods, and if so how big is this demand?

To study the supply side, we spy on competitors. What can we learn from aspiration brands and can we win a sliver of the pie in this marketplace?

These exercises will help you discover industry data and consumer insights, so you can confidently make educated decisions for your new business.

PART 1: Opportunity Assessment

● Goal: Create a one-sheet summary with a big picture view of the opportunity in your niche. Weigh the size of the market (demand) versus competition (supply). Ultimately, these data points, together, will help you make an informed decision whether to launch your product or not.

● Keywords - Start by identifying your top 5 keywords using Merchant Words, Amazon, and Google Keyword Planner. Select keywords in the purple mid-range below, where traffic is sufficient and bids are not too expensive. As a benchmark, aim for keywords with search volume between 10K and 1M. Anything outside that range may indicate too few demand or too much competition.

DEMAND - SIZE OF AUDIENCE ON KEY PLATFORMS

In this course, you will learn to drive traffic from various sources like Google Search, Facebook Ads, and Amazon. So before you dive into developing your product, you need to first validate whether there is an existing audience on these platforms interested in buying your good. In the process of this exercise, you’ll also be spying on competitors. This will help you start thinking about ways to differentiate your product, and what great brands are doing with their marketing strategy.

See Product University Week 8 for Case Study on Demand Assessment

● Google

e.g. “myrrh tibetan e.g.

Sweet Long-tail KW

Generic KW

- Google Search: browse the top listings on Google’s search results for competitor brands. What’s the quality of these sites. Are you able to construct a more awesome website and jump your competitor’s listing?

- Google Adwords: Use Adwords to gauge search volume for your main keyword. This gives you an idea of demand.

● Facebook (FB)

Facebook Search: Use FB search to find interest groups with a similar audience. Take note of the ones with the biggest audience (# of likes) and engagement. You’ll likely being advertising to this crowd.

FB Audience Insights: Under the “interests” field, search your main (e.g. incense) and related keywords (e.g. buddhism) to find groups interested in your topic. The results shows you the size of this audience, and under “Page Likes,” you’ll discover groups with a similar audience. Don’t just research direct competitors, but think about complementary brands that target a similar group. For example, incense can be advertised to a brand that sells

zen meditation music because those same people will likely purchase incense.

FB Ads: In your FB Ads Manager, under “Detailed Targeting,” input your main keywords. Here you’ll find groups interested in your topic. Take note of the size of each audience group.

The goal is to find out if there is a big enough audience on FB to target.

● Amazon : Run Jungle Scout (JS) app on Amazon to measure demand. If the sum of all purchases in that category is greater than 3000 units/mo that’s pretty good demand. You just have to figure out how to get a slice of that action.

Alternatively, if you don’t have JS app, you can calculate this manually. It’s free, but tedious. Use Amazon’s best-seller-ranking (BSR) to determine sales. Firstly, find the BSR number towards the bottom of a product listing. Secondly, pop the BSR into JS’s sales estimator calculator to convert BSR to sales. Thirdly, calculate your profit margin using Fulfillment by Amazon Revenue Calculator.

● Merchant Words : Use Merchantwords.com to estimate the search volume on Amazon for your niche. Browse the results for inspiration ideas, like new product variations.

● More resources: Learn more about your product by checking out what’s happening on these sites - Buzzsumo, Techcrunch and Watchcount.

SUPPLY - COMPETITIVE LANDSCAPE

● Select 2 of the biggest brands in your niche, say in big box retail stores, and 1 peer brand on Amazon. Compare them side-by-side by filling out this table.

INDUSTRY - WIDE RESEARCH

A good place to learn more about your industry is on Google and Youtube. You’ll find a wealth of information and discover role model brands to follow. Take note of top-selling products, competition, and start painting an image of your future customer and what topics they care about. Additionally, consider the following when evaluating your marketplace opportunity:

● Profit Margin - benchmark competitors financials, and create your own profit calculator to determine your profit margin. Aim for a profit margin higher than 30%. Anything lower, you risk losing money if market price drops or unforeseeable costs arise.

Profit $ = Sales - ExpensesProfit Margin % = Profit / Sales

● Unique vs Commodity good Avoid commodity products. Most me-too products fall into the trap of a price war as new entrants flood the market. Can you find products with high points of differentiation? You’re goal is to create and nurture a premium brand.

Avoid this rookie mistake, and save yourself the grief of having a pileup of unwanted inventory in your garage. If a particular product is trendy or was showcased as a case study on other training courses, it might not be a good product to select. (e.g. garlic press, silicon baking mat, wireless earbud)

● Consumable (or Repeat Purchases) vs One-Time Buys Ideally, you’d like a product with repeat purchases so you can offer a subscription model, thus increasing the cash flow and the equity value of your business. Moreover, repeat customers are cheaper to acquire than new customers.

● Trends:

○ Key Drivers - List major trends happening in this space that’s influencing customers’ purchasing decisions. (e.g. the rise of a shared economy has given Airbnb and Uber a lift; education around the toxicity of household products created a new opportunity for Honest Company.) Likewise, consider major trends that could negatively impact your category.

○ Seasonality - Use Google Trends to determine the seasonality of your product. Ideally, you’d like to select a product that has steady sales

throughout the entire year. (e.g. soap is a year-round product, whereas car sunshade is seasonal) Also, take a glance at the top and rising queries. It may offer inspiration for related product ideas.

○ Product life-cycle - Is your product in its early stages of growth or maturity? If your product is in the growth phase, great, but how much time do you have before new competition enters? If it’s in its mature stages, you will likely experience a lot of competition, fallen prices and a squeeze on margins. (e.g. silicon spatula and coconut is at the mature phase of its short life-cycle.)

● Demographics - consider the age and life-stage of your customer (e.g. take millennials versus baby boomers, each demographic has their own set of priorities and shopping behaviors). Facebook Audience Insights paints a pretty good picture of your target customer. Bottom line is, make sure your branding aligns with your audience.

● Document all your learnings on this worksheet. This one-page summary provides a big picture assessment of the size of your marketplace, the major players in this space, and industry-wide knowledge. All these data points, together, will help you assess whether your niche is a good opportunity or not.

PART 2: Customer Research

● Goal: Know your customers and their pain points. Think about how your product benefits them, and fills a gap in the marketplace. Good marketing starts with relevant consumer insight.

● Consumer Insights: Study thought leaders, influencers, and big brands in your space, and create a list of frequently queried questions around your product. Start to paint a picture of your potential customers.

✔ Influencers (via blogs and YouTube)✔ Aspiring brand leaders (website and social media page)✔ Top 10 frequently asked questions about your product, using Google Search and YouTube.

● Here are a few warm-ups to help you understand your customer’s needs.

○ Learn from your competitors by reading their negative reviews on Amazon. Write down what customers like and dislike about the product.

○ Buy your competitor’s product, tinker with it, and think about how you can improve the user experience.

○ Pinpoint a product feature, where your competitors are weak, and work with your supplier to create a better product. This can be your point of differentiation. Be sure to choose an impactful product feature, one that would sway customers to purchase your goods over others, and command premium pricing.

● Target Customer - Draw your avatar consumer and list his/her demographic and psychographic. Focus on the benefits that your customer receives. What about your product empowers your customer? (i.e. vitamin C serum makes women feel more confident, youthful, and beautiful.) Focus not on the product features, but rather the user benefits.

PART 3: Positioning

● Goal: This exercise will help you brainstorm and define your brand’s value proposition. Basically, what makes your product superior than that of your competitors, so much so, it compels your customers to buy from you over competitors, AND at a higher price.

● Tip #1: Law of Leadership: Being first in the market is more important than having a better product than competitors. If you can’t be #1 in a category, then get creative and craft a sub-category. (This law is based on a study conducted by two of the world’s best marketing strategists, authors of The 22 Immutable Laws of Marketing.)

● Tip #2: Consumer insights drive your decisions. Don’t assume you know what customers want because your thought may not be representative of customer’s preferences. Instead, use data to shape your decision.

Now that you have some branding tools in your back pocket, go through steps 1-4 to develop your product positioning.

● STEP 1: Segmentation - Identify the various segments of your category. For example, in the toothpaste category, there are 4 segments: whitening, cavities, fresh breath and, sensitive. See chart below.

● STEP 2: Product Differentiation - Can you create a new segment based on your product’s unique value proposition? (Remember, it’s better to be first in a new niche than simply better.) Think about your own story, your why, your supply chain, how your product solves a big problem, or fills an unmet need in the marketplace. Review worksheets for ideas.

Example: Sensodyne didn’t compete in the space of whitening toothpaste, instead they carved out a new niche, targeting consumers with sensitive teeth, and became no.1 in that sub-category. Brilliant!

● STEP 3: Positioning - Once you have an idea of what makes your brand different, describe you unique value proposition in a single word.

Company Value Proposition

Fedex ---> Overnight

Crest ---> Prevent cavities

BMW ---> Speed

Write your product positioning in the worksheet.

Sensodyne became o.1 in a new

whitening cavities fresh breath sensitive

Toothpaste

PART 4: Supply Chain

Here’s a workflow to help you set up your supply chain.

The process is the same for finding packaging suppliers. Before you mass produce, make sure your packaging supplier receives a sample of your product for fit.