New Products Management - CHAPTER 16 PART FIVE LAUNCH pot

PART FIVE
PART FIVE
LAUNCH
LAUNCH
McGraw-Hill/Irwin
Copyright ©2006 The McGraw-Hill Companies, Inc. All right reserved.
Launch
Launch
Figure V.1
The Five Decision Sets that Lead to a
The Five Decision Sets that Lead to a
Marketing Plan
Marketing Plan
Figure V.2
Common Myths About Marketing Planning
Common Myths About Marketing Planning
for New Products
for New Products

Marketing people make the decisions that constitute
a marketing plan.

The technical work is complete when the new item hits the
shipping dock. Marketing people take over.

The marketer’s task is to persuade the end user to
use the new product.

The more sales potential there is in a market segment, the
better that segment is as a target candidate.


The pioneer wins control of a new market.

As with Broadway shows, opening night is the culmination
of everything we have been working for.
Figure V.3
CHAPTER 16
CHAPTER 16
STRATEGIC LAUNCH PLANNING
STRATEGIC LAUNCH PLANNING
McGraw-Hill/Irwin
Copyright ©2006 The McGraw-Hill Companies, Inc. All right reserved.
Strategic Givens
Strategic Givens

Corporate, some team decisions made earlier.
Often found in the PIC Guidelines.

A specified gross margin: affects funding.

Speed-to-market: affects promotional outlays and
schedules.

Commitment to a given channel: affects
distribution plan.

Advertising policy: affects promotion decisions.

Pricing policy: affects decision to use penetration
or skimming pricing (slide down demand curve).
Revision of PIC Goals

Revision of PIC Goals

Customer
Acceptance Goals

Use

Satisfaction

Sales

Market Share

Financial
Performance Goals

Time to break even

Margins

IRR, ROI

Product Level
Performance Goals

Cost

Time to Market

Performance


Quality

Other

Competitive Effect

Image Change

Morale Change
Strategic Platform Decisions
Strategic Platform Decisions

Permanence

Aggressiveness

Type of Demand Sought

Competitive Advantage

Product Line Replacement

Competitive Relationship

Scope of Market Entry

Image
Permanence
Permanence


Permanent, stand-alone.

Permanent, but as a bridge to other items e.g.,
platform strategy.

Temporary. Given firms’ tendency to develop streams
of products, more and more new products are actually
only temporary.
Some Other Strategic Platform
Some Other Strategic Platform
Decisions
Decisions

Aggressiveness (aggressive versus cautious attitude
at entry)

Type of demand sought (primary versus selective)

Competitive advantage sought (differentiation, price
leadership, or both)

Competitive relationship (aim at a competitor, avoid
a competitor)

Image (create a new image, tweak an existing
image, use the already-existing image)
Product Line Replacement Strategies
Product Line Replacement Strategies
Butt-on product

replacement
The existing one is simply dropped when the new one is announced. Example:
Ford's marketing of Mondeo and dropping of Sierra.
Low-season switch Same as butt-on, but arranging the switch at a low point between seasons. Tour
companies use this switch when they develop their new catalogs.
High-season switch Same as butt-on, but arranging the new item at the top of a season. Example:
Polaroid used this strategy often, putting new replacement items out during the
Christmas season.
Roll-in, roll-out Another version of butt-on, but arranged by a sequence of market segments.
Mercedes introduced its C series country by country.
Downgrading Keeping the earlier product along side the new, but with decreased support.
Example: The 386 chip stayed along side the 486, until the Pentium was
introduced.
Splitting channels Putting the new item in a different channel or diverting the existing product into
another channel. Example: Old electronic products often end up in discounter
channels.
Figure 16.1
Scope of Market Entry
Scope of Market Entry

This is not test marketing. This is launch. All forces in
place and working.

Roll out slowly checking product, trade and
service capabilities, manufacturing fulfillment,
promotion communication, etc.

Roll out moderately, but go to full market as
soon as volume success seems assured.


Roll out rapidly full commitment to total
market, restricted only by capacity.
The Target Market Decision
The Target Market Decision

Alternative ways to segment a market

end-use, geographic/demographic,
behavioral/psychographic, benefit
segmentation

Micromarketing and mass customization

Also consider the diffusion of innovation
Using the Joint Space Map to Identify
Using the Joint Space Map to Identify
Benefit Segments
Benefit Segments
Figure 16.2
Aqualine
Islands
Splash
Molokai
Sunflare
2
3
1
Fashion
Comfort
Factors Affecting Diffusion of

Factors Affecting Diffusion of
Innovation
Innovation

Relative Advantage

Compatibility

Complexity

Divisibility

Communicability
Product Positioning
Product Positioning

Who Why How

To whom are we marketing?

Why should they buy it?

How do we best make the claim?
To Whom Are We Marketing?
To Whom Are We Marketing?

Users vs. non-users (primary vs. selective demand)

Target market criteria (demographic, geographic,
psychographic, benefit segmentation)


Everybody no narrowing down (mass
customization, Post-It notes)
The real issue here is commitment by all NPD
participants and by management
Why Should They Buy It?
Why Should They Buy It?

This too we have been testing basic concept
statement used for testing and for guiding
technical (e.g., QFD “Whats”), and the key
reason on the “How likely would you be to buy
this if we marketed it?” (product use test)

Formatted in three ways:

Solves major problem current products do not.

Better meet needs and preferences.

Lower price than current items.
How Do We Make the Claim?
How Do We Make the Claim?

Product positioning statement is a
strategic driver a
core item
not a list of advantages. Some new
products get one short sentence technical items more.


Can be stated as one or more features (what it is).

Can be stated as a function (how it works).

Can be stated as one or more benefits (how the user
gains).

Can be stated as a surrogate (no features, functions,
benefits).
Product Positioning Options
Product Positioning Options
Position to an Attribute

Feature

Function

Benefit (direct or
follow-on)
Position on a Surrogate

Nonpareil

Parentage

Manufacture

Target

Rank


Endorsement

Experience

Competitor

Predecessor
Figure 16.2
Branding Decisions
Branding Decisions

What is the brand’s role or purpose?

Are you planning a line of products?

Do you expect a long-term position in the
market?

How good is your budget?

Physical/sensory qualities of brand considered?

Message clear and relevant?

Insulting or irritating to anyone?
Questions and Guidelines in Brand
Questions and Guidelines in Brand
Name Selection
Name Selection

Question Guideline
What is the brand's role or purpose? If the brand is to aid in positioning, choose a brand
name with meaning (DieHard, Holiday Inn). If
purely for identification, a neologism (made-up
word) such as Kodak or Exxon will work.
Will this product be a bridgehead to a line of
products?
If so, choose carefully so as not to be a limitation in
the future (Western Hotels changed name to
Western International, then finally to Westin.)
Do you expect a long-term position in the market? If not, a dramatic, novelty name might be useful
(such as Screaming Yellow Zonkers).
Is the name irritating or insulting to any market
segment?
Women found Bic's Fannyhose to be objectionable.
Figure 16.8
Crapsy Fruit French cereal
Fduhy Sesane China Airlines snack food
Mukk Italian yogurt
Pschitt French lemonade
Atum Bom Portuguese tuna
Happy End German toilet paper
Pocari Sweat Japanese sport drink
Zit German lemonade
Creap Japanese coffee creamer
I'm Dripper Japanese instant coffee
Polio Czech laundry detergent
Sit & Smile Thai toilet paper
Barf Iranian laundry detergent
Some Brand Names That Didn’t Work

Some Brand Names That Didn’t Work
Figure 16-9
How Brand Equity Provides Value
How Brand Equity Provides Value
High
Brand
Loyalty
Other Brand
Assets
More/Better
Brand
Associations
High
Perceived
Quality
High
Brand
Awareness
Reduced
marketing
costs
Increased
trade
leverage
Patents or
trademarks
Strong
channel
relationships
Creates

positive
image
Helps
customer
process
information
Supports
quality
positioning
Supports
higher-price
strategy
Easier to
make
brand
associations
Increased
liking and
familiarity
Provides value to customer:
Assists in customer information processing
Increases confidence in purchase
Increases satisfaction in product use
Provides value to firm:
Increases effectiveness of marketing programs
Increases customer loyalty and trade leverage
Facilitates brand extensions
Is a source of competitive advantage
Figure 16-10
Building Brand Equity

Building Brand Equity

Getting
awareness
of the brand and the meaning.

Making
brand associations
even the factory location in
Saturn’s case.

Building
perceived
quality

Loyalty in
repurchase
locking them in

Getting
reseller
support