Goals of the Inventor:
One goal for the inventor is to obtain patents on new products or services that your customers want to buy, or for products or services that other companies want to sell or offer to their customers. The patent may protect the product or service or a key component associated with the product or service.
Another goal for the inventor is to obtain patents on new products or services that block your competitors from making, selling or using your product or service or that block competitors of companies who buy or license the patent from you.
Identify the Eligible Subject Matter Category:
The subject matter for a patent must fall into one of the following five categories: a machine, an article of manufacture, a composition, a method, or an ornamental shape of an article. Abstract ideas (equations, mental process, business plans, software programs, etc), laws of nature and natural phenomena cannot be patented.
After determining the subject matter category(ies), then determine all of the possible marketplace settings for each category:
For each marketplace setting, what is its value proposition?
Commercialization: How does an inventor, entrepreneur or small business compete in the marketplace?
Tips and Pointers:
- For commercial research: Use Amazon.com as a market research tool. Type in ‘bestsellers’ in Amazon.com to determine the top 100 selling item in each product category. Identity the features that make the product a top 100 product; also identify how the product is positioned (what is the product’s value proposition) and targeted (which customers is the product directed to);
- Use STP principals: Segmentation; Targeting; Positioning;
- Targeting: the effort of applying your marketing tasks (advertising, promotional materials) to a small group of potential customers based on demographic information: age, sex, income, occupation, location, interests, and culture;
- Positioning is the effort to influence the consumer’s perception of a product or service. Your objective is to occupy a clear, unique and advantageous position in the consumer mind.
- Select trademarks that relate or suggest the ‘valve proposition’ desirable to the customer; select marks that are distinguishable form competitor marks; use unique distinctive words or phrases to help customers associate your trademark to the product or service;
- Marketers know their products don’t appear to everyone. Therefore, they don’ try to sell their products to everyone. They ‘target’ their products to selected group of potential customers;
- Positioning: Marketers know they must ‘craft’ a story for their products. What segment of potential customers have needs that are not being me. A story is created that tells how the product addresses this unmet need. Positioning is the efforts used to influence consumer perception of a brand or product relative to the perception of competing brands or products. Its objective is to occupy a clear, unique and advantageous position in the consumer’s mind;
- You must break down markets into segments. Use Amazon.com to identify large segments (i.e. Sunglasses). Review data from Amazon.com and identify sub-segments (i.e. fashion sunglasses; sports sunglasses; expensive sunglasses; cheap sunglasses; female; male; etc); review their ‘positioning strategy’, ( i.e. special features, design, price, or quality);
- 3 ways to target a market: (1) mass market (undifferentiated); (2) segmented; and (3) concentrated;
- Angel inventors: ‘A’ angel inventors are investors who invest funds for a particular product: ‘B’ angel inventors are investors who invest funds in a product that has little sales, some customers but invest funds for further develop, more efficient manufacturing and distribution; ‘C’ angel inventors are investors who invest funds in a product that has large sales, large number of customers but need to invest for more products and markets;
- Develop pain killers (required), not vitamins (not required);
- Elevator pitch: “ABC company provides (insert product category), for (insert customers), for the purpose of (insert purpose) that allows them to (insert benefit) by (insert invention).
- Product Cycle: All products have a ‘product cycle’. Useful to forecast future trend, market targeting and positioning; analyze and manage a product portfolio; focuses investments in products
- 5 stages of product development: development; introduction; growth; maturity; and decline. Consider for your product buy also competing products.
- Types of Market Structures: Perfect Market (easy to enter, products are identical, local, same prices, ie strawberries) ; monopolistic competitive (low barriers to entry, products very similar, fast food restaurants ; oligopolies (few products in category; high barrier to entry; eg. automobile manuf, cell phone manufacturers) and true monopolies. (Boeing, broadcast media, satellite service, high barrier to entry, no substitutes);
- Olig’s and Mono’s do not compete on price (rely heavily on advertising, do not rely on convenience or extra features); Perfect and M/C’s compete on price and convenience or extra features) .
- Price leadership: when one company rises prices, other companies also raise prices shortly thereafter.
- Game theory: Companies do not lower prices, instead they add features.
- know the market structure of your product;
- transient advantage vs. sustained advantage;
- trademarks should easy to remembered. Trademarks should (1) relate to the product: (2) relate to the brand (the emotion or feeling) associated with the product, or; (3) so unusual they pique curiosity;
- If you are selling a product in a new product category, you should also develop a name for the new category (RED BULL and ‘energy drink’);
- Brand Extenders: Coors and Coors Light. Not recommended if changes the position and target of the first product. The general rule is that ‘if you put our brand on everything, you weaken the brand”. Powerful brands are ‘focused’;
- Branding: Remember right side of brand is visual, emotional and appeals to images, left side of brain is verbal, cognitive and appeals to words. You want to engage both sides – through words and images that are highly visible and appeal to emotion.
- Visual hammers are often used to provide a visual or emotional component – i.e. AFLAC duck, gecko used with GEICO Insurance;
- Use standard fonts (1st letter cap, other letters small) – easier to read. Starbucks not STARBUCKS;
- Trademark selection steps: determine your target, position and focus; develop the verbal mark (nail); develop the visual mark (hammer); conduct a tm search (USPTO, Google, Amazon); and,
- Your strategy is to own a word for your product category in the minds of the consumer. If you think of coffee, you think of Starbucks.