How to back a real winner

I get offered so many new products by companies saying they will help buck the downward trends in the on-trade — but how can I tell what will really work?

Geoff Brown, Punch Taverns

There are three positive challenges you should measure any new brand against:

1. Will it increase footfall?

Will the presence of the new product attract new customers to my pub?

The brand needs support

from external point-of-sale or advertising of some sort that makes customers aware of why they should buy this product and that it's now available from your outlet.

2. Will it increase transaction value?

Does the brand have any premium qualities? If the brand will increase your turnover or, ideally, your profit margins then it's going to be worth taking a look at. So, if you believe you can charge 10p more for something compared to its competitor you should seriously consider it.

3. Does it encourage cross-category purchase?

Will you sell more than the brand itself? For example, many soft drinks lend themselves well to an exciting spirit/mixer combination.

Any new brand launch should be able to announce itself in your pub or bar with a promotion or deal that delivers at least one of these three key virtues.

If it can do more than one of the three then it's definitely worth looking at.

David Scott, Carlsberg UK

When evaluating any new product I would always ask myself whether it suits the type of consumers I'm looking to attract, so the first step has to be identifying the type of consumers and occasions you're looking to drive, and then adopting the appropriate drinks range to suit them. For example, if you're trying to attract families a strong soft drinks range will be important.

Of course, you're always going to get a product that bucks the trend, so it always pays to keep your ear to the ground:

1. Keep your eye on your competitors and what they have on the bar — if it looks interesting get some feedback from the barstaff and consumers to see if it's working for them.

2. Keep your eye on the market trends. Suppliers are a good source of category information.

3. Give new products a trial in your pub. The best way of finding out if something is going to work is to try it for yourself; commit to a trial before you order lots of stock and try to build it into a special event so you give it maximum exposure.

If a new product is going to gain any franchise within the marketplace, consumers are going to know about it. So if three customers ask you for something that you don't stock then there's probably an opportunity there.

Paul Grace, Coca-Cola Enterprises

This would be my criteria for picking the winners:

1. Have my customers heard of it?

2. Do I trust the supplier?

3. How much can I make from it per week?

Be confident that visitors will react positively to the products you sell because of advertising spend, brand image and/or heritage. Remember that your customers are the same people that go into supermarkets, read bus-stop ads, watch the TV and choose brands in corner shops. A strong brand means a higher likelihood of them buying it or being happy at the price.

Be confident in the supplier. Can you trust the quality of the product, will its PoS marketing add to sales, will the supplier continue to supply and support?

Be confident that you will make money. It doesn't matter that a product makes 90% margin if your customers ignore it. Equally, ask the salesman what margin you will make and what they will provide to help you tell people about it.

A strong combination of speed of sale and margin will give you a winner.

Graham Donald, Matthew Clark

Making a decision on what new products to stock is probably one of the hardest ones to make — everyone knows most new products (about 80%) will fail.

My advice is to listen carefully to the sales pitch that accompanies the new product. Key points to consider include the sector the new product is in; the target market; any track record in the UK or other markets (remember this is no guarantee of success with UK consumers); what media support there is; what support is available to launch the product in your outlet and what ongoing support there will be.

Remember that business is about risk. You need to judge whether a product will deliver either enhanced or incremental profit for your business.

You should mitigate the risk by ensuring as much as possible that the product is right for your premises and that you have the time to invest in training your staff and merchandising.

Finally, set some goals for the new product so that if after a while you find it's not cutting it you can try something else.

Sarah Lewis, Diageo GB

Although new products sound exciting, there are some key factors to deciding what's right.

The first thing to consider is what the benefit to the customers is, where it fits with the current offering and how it adds value for visitors.

Think about factors of choice, value for money, point of difference, convenience and quality. Ask yourself how it works alongside your current range. Does it offer genuine extended choice and is it relevant to ongoing trends?

Also think about what it does for the image and credibility of your outlet — does it reassure your customers about what type of pub or bar you run? Think about why customers come in and what sort of consumers they are. Answers to these sorts of questions will help you make an informed decision.

Then you need to consider what support the product is getting. If it has a TV campaign behind it, customers may be disappointed if it's not available.

Another consideration is the commercial benefit, which can be divided into two categories: operational impact, and cash and profit impact. The operations side is about efficiency; screw-cap wine is a good example as it reduces serve time and has a lower risk of being corked. For sales impact, is it offering the choice demanded by your customers? You don't want to stock new products that duplicate current offers and will just gather dust.

Lastly, think about the big picture — are you providing something you genuinely believe customers will want now and in the future?

Imogen Pudduck, Red Bull

This is a common challenge, as new products are launched all the time. Ask yourself some key questions related to the new product and the current trends.

Firstly, there are many prevalent macro trends. By staying on top of communication in media, you will understand the demands of the consumer, building your range accordingly. Secondly, look at the product and ask some key questions: how innovative is this product to the consumer, and to your current range. If you feel it is just a "me too", do you need it?

What are their reasons for launching the product? Are you convinced it will buck the trend? How are brand owners supporting this product —

is there a strong and consistent marketing campaign? Will consumers be aware of it and order it, or will it just sit at the back of your chiller? How are brand owners supporting your venue? Is there appropriate point of sale, sales callage and a genuine desire to sell this product? How strong is the parent brand? Are consumers demanding it in your venue?

Finally, and most importantly, how does the product fit with your current range offering and your venue. Try to keep a consistent and single-minded approach, by relating your food and drinks offerings to your outlet. If your venue attracts families they will have a desire for more value-for-money products, as opposed to a city winebar attracting a young affluent set looking for a premium drink-and-food experience.

Ultimately, decide whether this product is right for you and your business.