Transcript PRODUCT LAUNCH

STRATEGIC PRODUCT LAUNCH
Compiled & Presented by
DR M. GUNAWAN ALIF
QUESTIONS
• What’s a good/bad… new/existing…
product/launch/promotion/ad/package… Why?
• Name the 3 most unique brands you can think of and tell
me why you think they are unique.
• What’s an innovative product? What would you do to
improve it?
• How would change the way brand Nescafe is marketed?
• Give me 3 line extensions for brand Lifebuoy. What’s your
critical comment?
• When you walk down the supermarket aisle, what product
jumps out and says “buy me” and why?
• What would the title of your autobiography be?
Why Launching Strategy?
Recent Study of nearly 300 companies
• 93% of Marketing department responsible for
product launches (89% control budget)
• 88% use multiple face-to-face meetings to rollout
products
• 69% of companies spend >3 months to launch
products (42% over 5 months)
• 66% of companies launch 5 or more
products/year (45% - 10 or more)
Source: Eloquent Market Survey, 2001
Why Does It Matter?
Eroding Margins
New
innovations
More,
Complex
Products
Less time to
sell
More channels
Increased
Competition
New Product Launch
•
Always start with the consumer. Do consumers want/need this product?
• Assess the opportunity:
– Size of the market—How big is the consumer need?
– Competition—Have they entered? Are they likely to?
– Estimate of your market share—Will this product have a fast adoption rate?
– Cost/ease of entry (capital investment and manufacturing, branding, distribution,
company skills, etc.)
•
Identify consumer segments, and choose your target (Think STP)
• Determine your positioning: Choose one singular benefit that you intend to deliver
to your target consumers. Positioning should be differentiating versus competition.
• Determine marketing strategy for new product (Think 4Ps)
– Price – set to reflect positioning (premium, popular, or value) and drive profit
– Product – which attributes to offer (flavor, size, etc.)
– Promotion – how will you create awareness and trial of product (advertising,
coupons, sampling, product demos, etc.)
– Placement – where will consumers buy product (grocery, mass, drug, club,
convenience, etc.)
Measured Goals
• Customer Acceptance Measures (Customer
aceptance/use; customer satisfaction; revenue;
market share; unit volume)
• Financial Performance (time to break even; margin;
profitability/ROI)
• Product level performance (product cost; time to
launch; product performance; quality guidelines)
• Other (nonfinancial measures peculiar to the new
product being launched; example: competitive effect,
image change, morale change.
Pricing
•
Positioning: Always choose a price that reflect your brand’s positioning.
• Premium vs. Popular vs. Value/Fighter brand (private label)
•
Elasticity: Elasticity tells you how responsive/sensitive your brand’s sales are to
changes in price. Use elasticity to analyze how pricing changes will impact your
brand’s volume and profit.
• Elastic (commodity products) vs. Inelastic (differentiated products)
•
Cost Structure: Always consider costs when analyzing pricing. Clearly, revenues
should exceed costs and the brand should be profitable.
• Profits = Revenue – Costs
•
Pricing Strategies/Considerations: Keep your brand plan & goals in mind when
determining your pricing strategy!
• Perceived customer value, markup, going rate/comparative, discriminatory,
bundling
NPL Discussion
You are a BM at Nestle, and the company is considering
launching a new chocolate-flavored KitKat product. What
factors/issues would you consider to make the decision to
launch and subsequently introduce the product?
•You are charged with marketing a candy bar in Indonesia
which has been very successful in the UK. What things should
you consider in bringing the product to Indonesian market?
•Give me an example of a recent new product launch that was
well done.
New Competitor
•
How viable is this threat? Assess the threat to determine whether or not you
need to defend:
– Does the new product meet a consumer need? Will anyone buy this
product?
– How strong is the competitor? Will they spend to support the launch – are
they smart marketers?
– Where will they take volume from? Are they targeting you or your
competitors?
•
Should you decide it is necessary to defend, there are some strategies to
consider (Think 4Ps):
– Reinforce equity with advertising/promotion – remind consumers why your
product is better than new competitor – don’t give them a reason to try.
– Product upgrade to provide new benefit – never give consumers a productbased reason to switch.
– Load consumers – provide price incentives so consumers will be stocked up
with your product when a competitor launches (aka Pantry Loading).
•
Track new competitor’s performance after launch to see if it is successful.
New Competitor - Private Label
• Build your equity: Use advertising to communicate quality/image of
branded products to consumers. Establish a point of difference versus
private label. Customers must understand the enhanced value of the
brand.
• Innovate: Increase product quality or innovate by introducing new
flavors, scents or choices.
• Manage the price gap: Consider a price sensitivity analysis. Determine
how much of a premium you can afford to charge before your brand
starts losing volume to private label (in essence, quantify the value of
your brand to consumers).
• Introduce a value brand: Larger companies that have more than one
brand competing in a given category could position one brand as a value
brand to compete against the private label. This offers consumers a
branded option at a lower price.
Declining Sales
Is the decline driven by a general category decline or a share
decline on my brand? These drivers lead to very different
strategies for reversing the decline:
• Why is my category declining?
– Changing consumer needs/habits/trends (health,
convenience), macroeconomic factors
• Why is my share declining?
– You changed something or your competitors changed
something (new product substitute – e.g. bleach usage
declined when Tide w/ bleach was launched)?
Declining Sales
• If category is declining, determine strategy to increase category usage:
– Increase frequency – “brush after every meal instead of in the
morning/evening”
– Use more per usage occasion – “for whiter whites use a full cup
instead of half”
– New product uses – e.g. recipes
– Expand across categories
• If share is declining, determine why. Explore 4 Ps for yourself and your
competitors:
– Price – Changes? Temporary or permanent? Reason – lower costs,
inventory, steal share, etc?
– Product – Has the quality changed? Any new products/upgrades?
SKU rationalization?
– Promotion – Have promos/advertising changed? Message?
– Placement – Have I lost distribution? Have competitors gained
distribution?
Product Strategies
• Product – bundle of benefits
– Offered to a market
– For attention, ownership, use or consumption
– Satisfy a need or want
– Object, service, place, organization or idea
Product – Service Continuum
• Pure tangible good (soap)
• Tangible good augmented by service(s)
• Clothes, camcorder
• Hybrid offer – equal parts product/service
(custom suit)
• A service with accompanying goods• Airplane trip
• An intangible benefit -(doctor’s app’t)
Product Onion
• Core Product: core benefit to buyer
• Actual Product: quality level, design, brand
name, packaging
• Augmented Product: Additional services and
benefits surrounding the product
Product Classifications
• Consumer Products
• Industrial Products
• Organizations, Persons, Places and Ideas
– Organization: Unicef, WALHI
– Persons: Roy Suryo, Paris Hilton
– Places: business site marketing and tourism
marketing
– Ideas: demarketing, green living
Consumer Product Classifications
• Convenience products
– Staples, impulse and emergency
• Shopping products
• Specialty products
• Unsought products
Analytical Dimensions
• Consumer buying behavior: frequency,
degree of planning and purchase effort;
degree of customer involvement; degree of
comparison
• Price
• Distribution
• Promotion
Convenience Product
• Buy it often, little planning or comparison, low
involvement
• Price: low
• Distribution: widespread, convenient locations
• Promotion: Mass (by the producer)
• Examples: toothpaste, detergent
Shopping Product
• Buy it less often, do plan and do compare
brands on quality, price, style
• Price: higher (than convenience)
• Distribution: Selective but still reasonable
convenient locations
• Promotion: advertising and personal selling by
producer and reseller
• Examples: computer, furniture, clothing
Specialty Products
• Strong brand preference, special purchase
effort, little comparison, low price sensitivity
• Price: high
• Distribution: one or a few outlets
• Promotion: carefully targeted by producer and
reseller
• Examples: luxury and some hobby goods
Unsought Product
• Little awareness or interest until needed;
often negative interest
• Price: varies
• Distribution: varies
• Promotion: Aggressive ads and personal
selling by producer/reseller
• Ex: funeral home, dental services
The Importance of Launches
“A company….must choose a launch strategy
that is consistent with its intended positioning.
The launch strategy should be the first step in a
grand plan for life-cycle marketing.”
Philip Kotler
Marketing Management
Does your product launch plan reflect all of the money
and time put into developing the product?
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Some Factoids
• 85% of new B2B products are failures
• 95% of new consumer products are failures
• Failures = doesn’t meet company objectives,
withdrawn from market within 12-18 months
Source: New Product News
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Positioning Strategy Process
Market Vision
Market
Drivers
Technology
Enablers
Customer/
End-User Problem(s)
Definition
Market/Customer
Segmentation
Competitive Differentiation
Strategy Evidence
Market Segment
Market Entry Customer
Segment Critical Need and
Total Product
Requirements
Positioning Strategy
Statement
Customer Segments
Company Total Product
Solution’s Potential
Differentiators
Total Product
Assets
Critical Needs
Competitors’ Total Product
Solutions’ Potential
Differentiators
Applications
Product/Market
Category
Mission
Statement
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Technology and Total
Product Roadmap
Partnerships
Company Product/
Service Match
Barriers to
Adoption
Market Entry Customer Segment
Roadmap and Market Segment
Leadership Roadmap
Company
Differentiator
Business Model
(Functional) Programs
Launch Objectives
• Unite company around shared objective: making the launch
successful
• Provide strategy evidence of the company’s intent, and right,
to be a market segment leader in product/service category
• Build independent third-party validation, and strategy
evidence, of positioning strategy
• Start the ‘buzz’, market pull with a consistent message
architecture
• Support long leadtime sales cycles
• Facilitate fundraising
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Launch Objectives (con’t)
• Establish core technology/system as an extensible
platform for future products and partnerships
• Establish broad-based awareness and credibility with
product customer segment
• Generate market momentum/Accelerate the sales
cycle for Product iPad; delay customer purchase
commitments to competitors
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Strategic Platform Decision
• Type of demand sought:
- New-to-the-world, develop entry strategy with emphasis on
stimulating primary demand for the product category (iPad)
- Product improvement, to achieve customer migration, to
stipulate replacement deal.
-Line addition, stimulate selective demand
• Permanence (stay, stay if meet the goals, temporary)
• Agressiveness (agressive, cautious, balanced)
• Competitive advantage (differentiation, price, or both)
• Product line replacement
• Competitive relationship
• Scope of market entry
• Image
Target Market Decision
• Segmentation (end-use; geographic & demographic;
behavioral and psychographic, benefit segmentation)
• Micromarketing & mass customization (loyalist, rotators on
alternative sets, deal-selective, price-driven, store brand
buyers, light users)
• Diffusion of innovation
• Product characteristic (relative advantage, compatibility,
complexity, divisibility, communicability)
Product Positioning
• Buyers should buy our product rather than others being
offered and used because:....................!
• Attribute (a feature, function, benefit)
• Feature, “the car that can’t make you lost (with a GPS ready)”
• Function, “shampoo that coats your hair with athin layer of
protein”
• Benefit, “saves your money.”
Branding & Brand Management
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Trademarks & registration
Thinks of a good brand name
Avoid brand name pitfalls
Manage brand equity
‘Pre-Announcing a Product’?*
• Why?
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Complex problem/solution = market education
Big budget line item product = long budget cycle, complex buying process
Competitive pressures
Need market ‘buzz’ for funding round
• Risks?
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Too much competitive information, too early
Market environment can change substantively
Product development slips
‘Obsolete’ an existing product
Analysts/Media won’t cover ‘the real deal’
* Often executed as a ‘crescendo launch,’ a series of targeted announcements leading up
to product launch
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‘Pre-Announcing’ Tips
• Do
– Describe key elements of technology
– Explain benefits of technology/potential applications
enabled
– Articulate initial total product assumptions (services,
standards, partnerships, etc.)
• Don’t
– Name product, provide specifications
– Announce pricing
– Provide precise launch date
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Launch Plan Outline
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Positioning Strategy Statement and Message Architecture
Objectives and Strategies
Competitors/Competitive Response
Market leverage/Influencer plan
Sales training and lead generation (closed loop)
Marketing programs materials
Schedule/Timeline
Momentum milestones
Appendix
- positioning toolkit
- customer segment profile
- buying decision process
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Launch Checklist: Some Strategy
Evidence Options
Positioning Toolkit
• Sales, channel strategy
• Product Release schedule
Programs
• Ads, site sponsorships
• CD, Flash demo
• Customer seminars
• Data sheets, application notes
• Direct mail, e-mail, list promotions
• Newsletters
• Sales, channel launch; training
• Trial, swap-up program
• Trade shows, conferences, events; suite briefings
• Advance press and analyst tour
• Speaker program
• Regional field sales champions
• User groups, customer councils
• Webcasts/Webinars with guest
experts: customers, analysts, partners
• Lead management system…sales force
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Materials
• Brochures
• Data sheets, application notes
• Presentations
• Price lists
• Product catalogs
• Product demonstrations
• Product roadmap
• Press releases
• Technical articles
• Technology, company backgrounders
• Testimonials
• White papers
• Web site update
Launch Manager is ‘Command and
Control’
Weekly Status and
Project Management
Sales:
Customer
Advocates
Content
CTO/Guru:
White Papers,
Simulation
Strategies
Creative,
Website,
Interactive
Marketing
Launch
Program
Manager
Shows,
Conferences,
Events
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Product
Development/
Technical
Marketing: Data
Sheets & Demos
Press/Analyst
Relations,
Materials
Production
Strategic
Partners, Investor
Relations
Launch Responsibilities
Launch Strategy
Marcom: Creative, Website,
Interactive Marketing
Product Marketing:
Data Sheets & Demos
Marcom: Press/Analyst
Relations, Collateral
Biz Dev: Strategic Partners
Marcom: Tradeshows,
Conferences, Events
CTO/Guru: White Papers,
Simulation Strategies
Sales: Customer Advocates
Content
Finance: Investor Relations
Product Development:
Product Availability
Launch Manager and Champion
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Developing Strategy Evidence: Market
Leverage Model
Education
Company
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Market Segment
Market
Entry
Customer
Segment
Market Leverage/Influencer Plan
Category
Investors
Sales Channel
Beta Customers/
Targeted accounts
Industry Partners,
Leaders, Gurus
Industry Organizations
Industry analysts
Financial analysts
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Names
Relationship/Objective/Program
Company Owner
Launch Pitfalls
• Launch planning starts too late in product development process
– Positioning strategy half-baked and untested, externally
– Not enough (credible) strategy evidence: bug-free product, the
right – at least one Tier 1 - customer testimonials and
references (negotiated into contracts), application notes and
documentation, channels, customer support
– Proper market foundation has not been laid, no one has heard
of the company or product
• A non-programmatic approach (‘escapes’ vs. launches): lack of
launch manager, market leverage and message models, launch
objectives, plan, measurable goals
• Lack of fully integrated plan (from product management to
marketing communications to product development)
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Hints: Start Yesterday!
Develop the Launch Plan Early
• Validate size of market and
positioning as foundation for plan
• Build consensus on key
messages
• Give yourself lead time to create
sales tools
• Technology, solution partners
play a larger role today
Hints: It takes a village to raise a child or launch
a product!
Leverage Cross-Functional Team Expertise
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Development
Product marketing
Sales (U.S., Int’l)
Technical sales
Strategic partners
PR, MarCom
Customers
Support
Hints: Leverage Cross-Functional Team Expertise
• Launch manager
– Oversee process
• Subject Matter Experts
– Create content: Author white papers, presentations, webcasts to
ensure message consistency
• Sales management, “friends and family” analysts,
customers and partners
– Bullet-proof launch messages, content, and delivery prior to
general release
– Early indicator of product success in market
• Pre-define roles and responsibilities for all
Hints: Sales is From Mars
Marketing From Venus**
• Know Your Audience (and they don’t think like you!)
– Sales: what it takes to win individual deals; don’t naturally
sell “new stuff”
– Marketing: best way to capture a market segment
• Walk in Their Shoes
– Spend time with the telesales group for a day
– Make a few cold calls to see what works and what doesn't.
– Shadow a sales rep through an entire sales cycle—from the
first call to signing the papers. You'll learn first hand what it
really takes to get a deal done.
Source: TopLine Strategy Group
Hints: Get to the Point – Fast
Where’s the beef?
• Keep It About the Customer
• Answer 4 Basic Questions*
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–
–
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Who am I selling to?
Why are they buying anything?
What do I have to sell them?
Why would they buy from me?
• Reinforce key messages
– No more than 3 key sub-messages
– Be creative – but make it meaningful
– Repeat throughout
rce: Customer Message Management Forum
Hints: One Size Doesn’t Fit All
• Different needs for:
– Domestic and international launches
– Field sales, inside sales, channel partners, distributors,
technical sales, service and support
– 76% of companies tailor messages
• For each audience
– Customize the message to what they care about
– Tailor delivery with a blend of tools
Hints: KISS – Keep It Simple Stupid
• Create a comprehensive self-service information center
– Supports multiple forms of content
• Live events, help center, reference materials, samples,
simulations…..
– Accessible online and remote
– Plan for peak usage, not average
– Based on typical user desktop, no special requirements
– Don’t expect the field to learn a new process easily
• LESS is MORE!
– Refrain from adding “extra” information
– Make everything easy to find
– Delete outdated information
Why Launches Can
Make You Crazy
Multiple
Objectives
(educate, announce,
certify,…)
Multiple
Tools
(presentation, web cast,
press releases, demos,..)
Multiple Delivery
Options
Multiple
Audiences
(Web, CD, face-face
PDA, Document)
(Customers, sales, resellers,
distributors, integrators)
Hints: Integrated Process
• Start with the customer presentation, messaging
– Gain consensus on the target, value proposition, features
• Integrated communication programs
– Re-examine at the list of what’s needed each time
– Multiple-activity communication campaigns
• Build sales and channels into the programs
– Communications content for all audiences managed together
– Make it easy for subject matter experts to create, submit and
update content into single framework
Summary and Wrap-Up
The Launch Plan is the chance to get the company and product off to
a good start in the market!
Make it clear and execute it creatively.
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Ref: Crawford and Benedeto (2008) and other online sources.
THANK YOU