LAUNCH

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LAUNCH

• STRATEGIC LAUNCH PLANNING

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Common Myths About Marketing Planning 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 marketers 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.

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The Five Decision Sets that Lead to a Marketing
Plan
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Strategic Givens

• Corporate, some team decisions made earlier.
  Often found in the PIC Guidelines.
• A specified gross margin for a new product
  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).
• Brand equity building, etc.

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Revision of PIC Goals
Most used set of measures

• Customer Acceptance Goals
• Use
• Satisfaction
• Sales
• Market Share
• Financial Performance Goals
• Time to break even
• Margins
• Profitability

• Product Level Performance Goals
• Cost
• Time to Market
• Performance
• Quality
• Other
• Competitive Effect
• Image Change
• Morale Change

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Strategic Platform Decisions

• Permanence
• Product Line Replacement
• Aggressiveness
• Type of Demand Sought
• Competitive Advantage
• Competitive Relationship
• Scope of Market Entry
• Image

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Permanence

• In to stay
• Stay if meet the goals (useful if entering new
  markets)
• Temporary. Given firms tendency to develop
  streams of products, more and more new products
  are actually only temporary.

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Product Line Replacement Strategies
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Some Other Strategic Platform 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, no reference to a specific
  competitor)
• Image (create a new image, major change in
  existing image, tweak an existing image, use the
  already-existing image) important for
  side-by-side replacement to keep continuous
  positive image

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Scope of Market Entry

• This is not test marketing. This is launch. All
  forces in place and working.
• Roll out slowly (part of the market) -- 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.

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The Target Market Decision

• Alternative ways to segment a market
• end-use, geographic/demographic,
  behavioral/psychographic, benefit segmentation
• Micromarketing/database marketing (e.g. direct
  marketers)
• Food buyers can be segmented into
• Loyalists (one brand, dont use deals)
• Rotators (two-three-product sets, dont use
  deals)
• Deal-selectives (rotators, determined by deals)
• Price-driven (all brands, always on sale)
• Store brand buyers
• Light users (buy too little for the pattern to
  show)
• Mass customization (towards unique specifications
  of individuals) allowed by information
  technology
• Also consider the diffusion of innovation (slow
  for microwaves, rapid for cell phones, may be
  instantaneous for cancer cure)
• TMD measures potential in each target market,
  needs satisfaction in each, capacity to compete
  in each

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Using the Joint Space Map to Identify Benefit
Segments
Comfort
3
Aqualine
2
Molokai
Islands
1
Splash
Fashion
Sunflare
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Factors Affecting Diffusion of Innovation

• Relative Advantage
• How superior to the existing product?
• Compatibility
• Does it fit with current usage process?
  (continuous vs. discontinuous innovation)
• If incompatible learning is required
• Complexity
• Will cause frustration and confusion?
• Divisibility (trialability)
• How easily can trial portions be purchased ad
  used? )low for houses)
• Communicability (observability)
• Easily seen and studied by potential users?

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Product Positioning

• Positioning statement will buy our product
  rather than others offered because _______
• Originated in advertising, now seen as part of
  total strategy 4 Ps must be consistent with it
• Who -- Why -- How
• To whom are we marketing?
• Why should they buy it?
• How do we best make the claim?

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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

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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.

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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).

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Product Positioning Options

• Position to an Attribute
• Feature
• Function
• Benefit (direct or follow-on)

• Position on a Surrogate
• Nonpareil (no equals, the best)
• Parentage (who makes it)
• Manufacture (process, ingredients, design)
• Target (especially for those like you)
• Rank (best-selling)
• Endorsement (by those you respect)
• Experience (long and frequent use)
• Competitor (like other known product, but
  cheaper)
• Predecessor (comparable to earlier product you
  liked)

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Branding Decisions

• What is the brands 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?

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Questions and Guidelines in Brand Name Selection
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Some Brand Names That Didnt Work
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
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How Brand Equity Provides Value
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A Brand Report Card
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Profitable Brand Strategies
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LAUNCH

• IMPLEMENTATION OF THE STRATEGIC PLAN

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The Launch Cycle
Sales and Expenditures
Sales
Expenditures
Introduction
Prelaunch Beachhead Early growth
Announcement
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Preannouncement

• Getting to be popular, and very creatively
  managed.
• Far from the old days of tease the public.
• Preannouncement signaling may be used
  (vaporware).

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Beachhead

• This refers to the heavy expenditure needed to
  overcome sales inertia (getting the ball
  rolling).
• Steep rising expenditures curve during this
  period, up to point where sales are increasing at
  an increasing rate.
• Begins with the announcement.
• Key decision during beachhead when do you end
  it? How do you know inertia has been overcome?

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Tactical Launch Decisions and Actions, Showing
Influences on Demand
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A-T-A-R Goals The New Product Groups Obligation

• New product group must persuade itself and
  management that the plan can achieve the
  necessary awareness, availability, trial, and
  repeat purchase...
• and that it can do so in sufficient quantity and
  at acceptable cost.

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Copy Strategy Statement

• Communications tools used at launch will have
  certain deliverables.
• The way in which the firm communicates these
  deliverables to the advertising and promotion
  creative people is the copy strategy statement.
• Typical contents
• The market segment targeted
• The product positioning statement
• The communications (promotion) mix
• The major copy points to be communicated (product
  attributes features, functions, benefits, uses
  surrogates)

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Typical Examples of Copy Points

• The provider of this insurance policy is the
  largest in the world.
• This cellular phone has no geographic
  limitation.
• Dockers are available at JCPenney.
• Future neurosurgeons benefit from the
  hand-to-eye skills of computer games like this
  one.

There is no limit to the choices here, but there
must be a focus. Only a few copy points are
going to be accomplished at a time.
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Motivating Distributors

• Increase distributors unit volume (outstanding
  product, pull techniques, exclusivity, demos in
  stores).
• Increase distributors unit margin (offer
  discounts and allowances for prepayment,
  promotion, service).
• Reduce distributors cost of doing business
  (training, return policies, delivery).
• Change distributors attitude toward the line
  (advertising, threats, product instructions).

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Barriers to Trial

• Lack of interest in the claim.
• Lack of belief in the claim.
• Rejecting something negative about product.
• Complacency.
• Competitive ties.
• Doubts about trial.
• Lack of usage opportunity.
• Cost.
• Routines.
• Risk of rejection.

To overcome Free goods, coupons, free service,
replacements offers, discounts, rebates pay the
buyer for anticipated loss of time, money,
prestige.
Achieve repeat purchase through long-term
discounts, new uses for the item, availability of
additional products and continuing service
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Appropriate Launch Tactics Given Relative
Advantage and Compatibility