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Marketing Viewpoint by Ruth Winett

Should You Jump on the Next Bandwagon?
Fads and Your Business

"Social media is a passing fad without practical application," thought many in the mid-nineties. Like social media, what seems initially to be a fad often becomes a mainstream phenomenon. How do you distinguish between the next great thing and a product or service that will soon disappear? A fad is an intense but short-lived fashion; a craze. In contrast, a trend is a growing movement. For example, the Internet of Things is a trend that is becoming mainstream; whereas, Fitbits are a fad that could lose ground to more sensitive devices.

When exploring new business opportunities, evaluate whether the product or service is a passing fad or whether it is a more lasting, more profitable trend that could become a mainstream offering.

Should You Invest in the Fad?

Before investing in a new fad, consider the following:

  • How big is the available market?
  • Does the fad appeal to both existing and new customers?
  • What are the start-up costs? What know how will you have to develop or acquire?
  • Will you need more capacity, such as manufacturing facilities and engineering and production staff?
  • Will you have to develop different sales channels and additional PR and marketing capabilities?
  • What would it take to be credible in the new market?
  • What are the opportunity costs? How would the new offering affect sales of existing offerings?
  • Can you deliver the new offerings profitably? If the fad ends in five years, will you be left with excess raw materials, inventory, and staff?

Getting on the bandwagon along with the crowd may not work for your business. Carefully weigh whether the product or service represents a real opportunity. Look for products and services that reflect trends that could become mainstream offerings. Factor in your company's tolerance for risk, as well.

Winett Associates can help you
evaluate new opportunities.

Copyright © 3/17 Ruth Winett. All rights reserved.

 

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