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How to calculate the market potential for a new invention?

market potential
market potential
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Calculating market value for any product is important, but for a new invention it can prove to be a necessity. Before investing in the patent process and prototype manufacturing process, it makes sense to understand the type of return for these efforts and expense. To that end, there are some helpful methods to measure an invention's market potential so you have some concrete numbers in place as you plan ahead. A smart estimate can also deliver some peace of mind knowing that you've achieved some important research regarding the data for an invention like yours. In fact, often this facet of invention planning can be quite inspiring, but it is always informative.

Invention Calculator

You may have heard there is an app for everything. Though that's not entirely true, there are some sophisticated apps and, in this case, calculators that can help inventors measure the global potential for their product or invention. As an inventor's resource, the calculating tool is designed to report some essential numbers by exploring factors such as proposed retail price for items, market size, market penetration, and more. By examining data closely, new inventors can begin to envision where their innovation may take them.

Define Your Target Consumer

The first step to understanding the market potential for your invention is understanding the consumer who is likely to need or buy such an item. You'll need to define the demographics associated with your innovation. How old is this consumer likely to be? Prepare to examine factors associated with your most likely consumer population such as race, sex, income level, values, education, etc...The more you get to know your potential audience, the better you will be able to market to them.

Get to Know Your Target Customers

While the data you generate by defining your target consumers is important, you might also put together a survey or even a focus group of people who fall into your target group. Ask them questions about branding, packaging, and even pricing. There are also many survey apps and websites that can foster your survey creation and delivery. Taking time to understand your target audience can impact your understanding of market potential.

Get to Know Your Competition

Part of market research should also involve a critical look at the competitors. Are there similar inventions already on the market? What are the closest products to your proposed invention? How successful are they at capturing their target audience and are their product sales growing? An inventor can learn quite a bit by simply checking out the competition and determining what practices can benefit their own pursuits and what practices should be left by the wayside.

Once you begin compiling numbers, it may help to make inquiries with a professional that understands the language of marketing with data. Of course, there many formulas online for calculating profit margins and market penetration, so innovators can, in fact, make many assessments for themselves. The key is to perform this research as it can greatly inform the design process and the eventual marketing platform to come if the invention is to move forward.

Patrick Dawson has been a design and product development expert for a number of years. To learn more about the author connect with him over at Google+. Sources for this article can be found at http://www.innovate-design.com/invention-calculator/.