STEP #5 PRELIMINARY MARKET RESEARCH
A "quick" market research
study is made to determine the invention's salability. Answers to the
following questions are found: Is there competition and to what extent?
How is the problem that the new invention solves, being solved at present
(if at all)? What is the production cost of the invention, and what could
it reasonably be sold for to the end user? Is there a sufficient margin
of profit between the end user price and the production cost? Is the profit
margin sufficient to allow enough margin or discount to entice distributors,
dealers, sales reps, etc. in order to develop and motivate powerful marketing
channels of distribution? And, is there still enough profit left over
to pay for advertising, sales and operating expenses and royalties? If
everything is positive, Step #6 is next. If the research outcome is negative,
however, the inventor is notified in writing and the agreement is terminated.
