STRATEGIC PRODUCT LAUNCH

QUESTIONS
Whats 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. Whats 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. Whats 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

Less time to sell

More channels Increased Competition

More, Complex Products

NEW PRODUCT LAUNCH Always start with the consumer . Do consumers want/need this product?

Assess the opportunity: Size of the marketHow big is the consumer need? CompetitionHave they entered? Are they likely to? Estimate of your market shareWill 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 brands positioning.
Premium vs. Popular vs. Value/Fighter brand (private label)

Elasticity: Elasticity tells you how responsive/sensitive your brands sales are to changes in price. Use elasticity to analyze how pricing changes will impact your brands 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 dont give them a reason to try. Product upgrade to provide new benefit never give consumers a product-based 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 competitors 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 goodsAirplane trip

An intangible benefit -(doctors appt)

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 = doesnt 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 Applications Product/Market Category Mission Statement Company Product/ Service Match
Market Entry Customer Segment Roadmap and Market Segment Leadership Roadmap

Market/Customer Segmentation
Market Segment

Competitive Differentiation
Market Entry Customer Segment Critical Need and Total Product Requirements

Strategy Evidence
Positioning Strategy Statement

Customer Segments

Company Total Product Solutions Potential Differentiators

Competitors Total Product Solutions Potential Differentiators Barriers to Adoption Company Differentiator

Total Product Assets Technology and Total Product Roadmap Partnerships

Critical Needs

Business Model (Functional) Programs

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LAUNCH OBJECTIVES

Unite company around shared objective: making the launch successful Provide strategy evidence of the companys 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 (CONT)

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 cant 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

Trademarks & registration Thinks of a good brand name Avoid brand name pitfalls Manage brand equity

PRE-ANNOUNCING A PRODUCT?*

Why?
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?
Too much competitive information, too early
Market environment can change substantively Product development slips Obsolete an existing product

Analysts/Media wont 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.)
Dont

Name product, provide specifications Announce pricing Provide precise launch date

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LAUNCH PLAN OUTLINE

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 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

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 systemsales force
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LAUNCH MANAGER IS COMMAND AND CONTROL

Weekly Status and Project Management

Sales: Customer Advocates Content

Creative, Website, Interactive Marketing

Product Development/ Technical Marketing: Data Sheets & Demos Press/Analyst Relations, Materials Production

CTO/Guru: White Papers, Simulation Strategies

Launch Program Manager

Shows, Conferences, Events

Strategic Partners, Investor Relations

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LAUNCH RESPONSIBILITIES Launch Strategy

Marcom: Creative, Website, Interactive Marketing Product Marketing: Data Sheets & Demos Marcom: Tradeshows, Conferences, Events Marcom: Press/Analyst Relations, Collateral CTO/Guru: White Papers, Simulation Strategies

Biz Dev: Strategic Partners

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 T R A E D D E I T P O R R E S S S B U S I N E S S
Market Segment

Company

I N V E S T O R S

S A L E S

C H A N N E L

T A R G E T

A C C O U N T S

P A R T N E R S

I N D U S T R Y

A N A L Y S T S

F I N A N C I A L

A N A L Y S T S

E D I T O p R R S E S S

Market Entry Customer Segment

Validation

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MARKET LEVERAGE/INFLUENCER PLAN

Category Investors Sales Channel Beta Customers/ Targeted accounts Industry Partners, Leaders, Gurus Industry Organizations

Names

Relationship/Objective/Program

Company Owner

Industry analysts

Financial analysts

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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

Development Product marketing Sales (U.S., Intl) Technical sales Strategic partners PR, MarCom Customers Support

HINTS: LEVERAGE CROSSFUNCTIONAL 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 dont think like you!)

Sales: what it takes to win individual deals; dont 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 cyclefrom 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

Wheres the beef ?

Keep It About the Customer Answer 4 Basic Questions*

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 DOESNT 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 Dont 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

(Web, CD, face-face PDA, Document)

Multiple Audiences
(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 whats 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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PRODUCT LIFE CYCLE

Sales and Profits ($) Sales

Profits Time Product Development Losses/ Investments ($) Introduction Growth Maturity Decline

Introduction Stage of the PLC

Sales
Costs Profits
Marketing Objectives

Low sales High cost per customer Negative Create product awareness and trial Offer a basic product Use cost-plus Build selective distribution Build product awareness among early adopters and dealers

Product Price Distribution Advertising

Growth Stage of the PLC

Sales Costs Profits

Marketing Objectives

Rapidly rising sales Average cost per customer Rising profits Maximize market share Offer product extensions, service, warranty

Product Price Distribution Advertising

Price to penetrate market

Build intensive distribution Build awareness and interest in the mass market

Maturity Stage of the PLC

Sales Costs Profits

Marketing Objectives

Peak sales Low cost per customer High profits Maximize profit while defending market share Diversify brand and models

Product Price Distribution Advertising

Price to match or best competitors

Build more intensive distribution Stress brand differences and benefits

Decline Stage of the PLC

Sales Costs Profits

Marketing Objectives

Declining sales Low cost per customer Declining profits Reduce expenditure and milk the brand Phase out weak items

Product Price Distribution Advertising

Cut price
Go selective: phase out unprofitable outlets Reduce to level needed to retain hard-core loyal customers

THANK YOU