launching strategies and plc

7/29/2019 Launching Strategies and PLC

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STRATEGIC PRODUCT LAUNCH


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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 improveit?

How would change the way brand Nescafe is marketed?

Give me 3 line extensions for brand Lifebuoy. Whats yourcritical comment?

When you walk down the supermarket aisle, what productjumps out and says buy me and why?

What would the title of your autobiography be?

QUESTIONS


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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 rolloutproducts

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)

WHY LAUNCHING STRATEGY?

Source: Eloquent Market Survey, 2001


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WHY DOES IT MATTER?

Newinnovations

Increased

Competition

More,Complex

Products

More channels

Less time to

sell

Eroding Margins


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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 deliverto your target consumers. Positioning should be differentiating versus competition.

Determine marketing strategy for new product (Think 4Ps)

Priceset to reflect positioning (premium, popular, or value) and drive profitProductwhich attributes to offer (flavor, size, etc.)Promotionhow will you create awareness and trial of product (advertising, coupons,

sampling, product demos, etc.)Placementwhere will consumers buy product (grocery, mass, drug, club, convenience,

etc.)

NEW PRODUCT LAUNCH


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Customer Acceptance Measures (Customer

aceptance/use; customer satisfaction; revenue; marketshare; 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.

MEASURED GOALS


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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 yourbrands volume and profit.

Elastic (commodity products) vs. Inelastic (differentiated products)

Cost Structure: Always consider costs when analyzing pricing. Clearly, revenuesshould exceed costs and the brand should be profitable.

Profits = RevenueCosts

Pricing Strategies/Considerations: Keep your brand plan & goals in mind whendetermining your pricing strategy!

Perceived customer value, markup, going rate/comparative, discriminatory, bundling

PRICING


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You are a BM at Nestle, and the company is consideringlaunching 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.

NPL DISCUSSION


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How viable is this threat? Assess the threat to determine whether or not youneed 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 launchare 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/promotionremind consumers why your product isbetter than new competitordont give them a reason to try.

Product upgrade to provide new benefitnever give consumers a product-based reasonto switch.

Load consumersprovide price incentives so consumers will be stocked up with yourproduct when a competitor launches (aka Pantry Loading).

Track new competitors performance after launch to see if it is successful.

NEW COMPETITOR


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Build your equity: Use advertising to communicate quality/image of

branded products to consumers. Establish a point of difference versusprivate 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 howmuch 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 brandcompeting in a given category could position one brand as a value brand tocompete against the private label. This offers consumers a branded option

at a lower price.

NEW COMPETITOR - PRIVATE LABEL


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Is the decline driven by a general category decline or a sharedecline 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 changedsomething (new product substitutee.g. bleach usage declined

when Tide w/ bleach was launched)?

DECLINING SALES


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If category is declining, determine strategy to increase category usage:

Increase frequencybrush after every meal instead of in themorning/evening

Use more per usage occasionfor whiter whites use a full cup instead ofhalf

New product usese.g. recipes

Expand across categories

If share is declining, determine why. Explore 4 Ps for yourself and yourcompetitors:

PriceChanges? Temporary or permanent? Reasonlower costs, inventory,steal share, etc?

ProductHas the quality changed? Any new products/upgrades? SKUrationalization?

PromotionHave promos/advertising changed? Message?

PlacementHave I lost distribution? Have competitors gained distribution?

DECLINING SALES


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Productbundle of benefits

Offered to a market

For attention, ownership, use or consumption

Satisfy a need or want

Object, service, place, organization or idea

PRODUCT STRATEGIES


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Pure tangible good (soap)

Tangible good augmented by service(s)

Clothes, camcorder

Hybrid offerequal parts product/service (custom suit)

A service with accompanying goods-

Airplane trip

An intangible benefit -(doctors appt)

PRODUCTSERVICE

CONTINUUM


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Core Product: core benefit to buyer

Actual Product: quality level, design, brand name, packaging

Augmented Product: Additional services and benefits surrounding the product

PRODUCT ONION


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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

PRODUCT CLASSIFICATIONS


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Convenience products

Staples, impulse and emergency

Shopping products

Specialty products

Unsought products

CONSUMER PRODUCT

CLASSIFICATIONS


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Consumer buying behavior: frequency, degree of planning and purchaseeffort; degree of customer involvement; degree of comparison

Price

Distribution

Promotion

ANALYTICAL DIMENSIONS


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Buy it often, little planning or comparison, low involvement

Price: low

Distribution: widespread, convenient locations

Promotion: Mass (by the producer)

Examples: toothpaste, detergent

CONVENIENCE PRODUCT


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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 resellerExamples: computer, furniture, clothing

SHOPPING PRODUCT


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Strong brand preference, special purchase effort, little comparison, low pricesensitivity

Price: high

Distribution: one or a few outlets

Promotion: carefully targeted by producer and reseller

Examples: luxury and some hobby goods

SPECIALTY PRODUCTS


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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

UNSOUGHT PRODUCT


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A company.must choose a launch strategythat is consistent with its intended positioning.

The launch strategy should be the first step in agrand plan for life-cycle marketing.

Philip Kotler

Marketing Management

THE IMPORTANCE OF LAUNCHES

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Does your product launch plan reflect all of the money

and time put into developing the product?


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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

SOME FACTOIDS

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Source: New Product News


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Positioning Strategy Process

Positioning Strategy

Statement

Technology and Total

Product Roadmap

Partnerships

Total Product

Assets

(Functional) Programs

Business Model

Market Entry CustomerSegment Critical Need and

Total ProductRequirements

Company Total ProductSolutions Potential

Differentiators

Competitors Total ProductSolutions Potential

Differentiators

CompanyDifferentiator

Barriers to

Adoption

Market

Drivers

Customer/End-User Problem(s)

Definition

Mission

Statement

Applications

Technology

Enablers Customer Segments

Critical Needs

Company Product/

Service Match

Market Entry Customer SegmentRoadmap and Market Segment

Leadership Roadmap

Market Segment

Product/MarketCategory

Market Vision Market/CustomerSegmentation Competitive Differentiation Strategy Evidence


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Unite company around shared objective: making the launchsuccessful

Provide strategy evidence of the companys intent, and right, tobe 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 messagearchitecture

Support long leadtime sales cycles

Facilitate fundraising

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LAUNCH OBJECTIVES


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Establish core technology/system as an extensibleplatform for future products and partnerships

Establish broad-based awareness and credibility withproduct customer segment

Generate market momentum/Accelerate the sales cyclefor Product iPad; delay customer purchase commitments

to competitors

LAUNCH OBJECTIVES (CONT)

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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, tostipulate 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

STRATEGIC PLATFORM DECISION


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Segmentation (end-use; geographic & demographic; behavioraland 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)

TARGET MARKET DECISION


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Buyers should buy our product rather than others being offeredand 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 ofprotein

Benefit, saves your money.

PRODUCT POSITIONING


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Trademarks & registration

Thinks of a good brand name

Avoid brand name pitfalls

Manage brand equity

BRANDING & BRAND MANAGEMENT


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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 productAnalysts/Media wont cover the real deal

PRE-ANNOUNCING A PRODUCT?*

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Often executed as a crescendo launch, a series of targeted announcements leading up to

product launch


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Do

Describe key elements of technology

Explain benefits of technology/potential applicationsenabled

Articulate initial total product assumptions (services,standards, partnerships, etc.)

Dont

Name product, provide specifications

Announce pricing

Provide precise launch date

PRE-ANNOUNCING TIPS

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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

LAUNCH PLAN OUTLINE

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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 guestexperts: customers, analysts, partners

Lead management systemsales force

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 Checklist: Some StrategyEvidence Options


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LAUNCH MANAGER IS COMMAND AND CONTROL

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Launch

Program

Manager

Creative,

Website,

Interactive

Marketing

Product

Development/

Technical

Marketing: Data

Sheets & Demos

Press/Analyst

Relations,

Materials

Production

Strategic

Partners, Investor

Relations

Shows,

Conferences,

Events

CTO/Guru:

White Papers,

Simulation

Strategies

Sales:

Customer

Advocates

Content

Weekly Status and

Project Management


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LAUNCH RESPONSIBILITIES

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Launch Strategy

Marcom: Creative, Website,

Interactive Marketing

Product Marketing:

Data Sheets & Demos

Marcom: Press/Analyst

Relations, Collateral

Biz Dev: Strategic PartnersMarcom: Tradeshows,

Conferences, Events

CTO/Guru: White Papers,

Simulation Strategies

Sales:Customer AdvocatesContent

Finance: Investor RelationsProduct Development:

Product Availability

Launch Manager and Champion


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Market Segment

SALES

T

ARGET

PA

RTNERS

IN

DUSTRY

AN

ALYSTS

AN

ALYSTS

TRADE

PRESS

MarketEntry

Customer

Segment

Company

BUSIN

ESS

pRES

S

E

DITORS

AC

COUNTS

CHANNEL

FINANCIAL

EDITORS

Validation

Education

INVESTORS

Developing Strategy Evidence: MarketLeverage Model


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MARKET LEVERAGE/INFLUENCER PLAN

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Category Names Relationship/Objective/Program Company Owner

Investors

Sales Channel

Beta Customers/

Targeted accounts

Industry Partners,

Leaders, Gurus

Industry Organizations

Industry analysts

Financial analysts


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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 rightatleast one Tier 1 - customer testimonials and references (negotiated into

contracts), application notes and documentation, channels, customersupport

Proper market foundation has not been laid, no one has heard of thecompany or product

A non-programmatic approach (escapes vs. launches): lack of launchmanager, market leverage and message models, launch objectives,plan, measurable goals

Lack of fully integrated plan (from product management to marketingcommunications to product development)

LAUNCH PITFALLS

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Validate size of market andpositioning as foundation for plan

Build consensus on key messages

Give yourself lead time to createsales tools

Technology, solution partners play a

larger role today

HINTS: START YESTERDAY!

Develop the Launch Plan Early


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Leverage Cross-Functional Team Expertise

Development

Product marketing

Sales (U.S., Intl)

Technical salesStrategic partners

PR, MarCom

Customers

Support

HINTS: IT TAKES A VILLAGE TO RAISE A

CHILD OR LAUNCH A PRODUCT!


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Launch manager

Oversee process

Subject Matter Experts

Create content: Author white papers, presentations, webcasts to ensuremessage consistency

Sales management, friends and family analysts, customersand partners

Bullet-proof launch messages, content, and delivery prior to general releaseEarly indicator of product success in market

Pre-define roles and responsibilities for all

HINTS: LEVERAGE CROSS-

FUNCTIONAL TEAM EXPERTISE


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Know Your Audience (and they dont think like you!)

Sales: what it takes to win individual deals; dont naturally sell newstuff

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 tosigning the papers. You'll learn first hand what it really takes to get a

deal done.

HINTS: SALES IS FROM MARS

MARKETING FROM VENUS**

Source: TopLine Strategy Group


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Wheres the beef ?Keep It About the CustomerAnswer 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-messagesBe creativebut make it meaningful

Repeat throughout

HINTS: GET TO THE POINTFAST

ce: Customer Message Management Forum


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Different needs for:

Domestic and international launches

Field sales, inside sales, channel partners, distributors, technical

sales, service and support76% of companies tailor messages

For each audience

Customize the message to what they care about

Tailor delivery with a blend of tools

HINTS: ONE SIZE DOESNT FIT ALL


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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

HINTS: KISSKEEP IT SIMPLE STUPID


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WHY LAUNCHES CAN

MAKE YOU CRAZY

(educate, announce,certify,)

(Web, CD, face-face

PDA, Document)

(presentation, web cast,press releases, demos,..)

Multiple

Objectives

Multiple

Tools

Multiple DeliveryOptions

(Customers, sales, resellers,

distributors, integrators)

MultipleAudiences


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Start with the customer presentation, messaging

Gain consensus on the target, value proposition, features

Integrated communication programsRe-examine at the list of whats needed each timeMultiple-activity communication campaigns

Build sales and channels into the programs

Communications content for all audiences managed togetherMake it easy for subject matter experts to create, submit and update

content into single framework

HINTS: INTEGRATED PROCESS


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SUMMARY AND WRAP-UP

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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.

PRODUCT LIFE CYCLE


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PRODUCT LIFE CYCLE

Time

Product

Develop-ment

Introduction

Profits

Sales

Growth Maturity Decline

Losses/Investments ($)

Sales andProfits ($)

I d i S f h PLC


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Introduction Stage of the PLC

Sales

Costs

Profits

Marketing Objectives

Product

Price

Low sales

High cost per customer

Negative

Create product awarenessand trial

Offer a basic product

Use cost-plus

Distribution Build selective distribution

Advertising Build product awareness among earlyadopters and dealers

Growth Stage of the PLC


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Growth Stage of the PLC

Sales

Costs

Profits


Product

Price

Rapidly rising sales

Average cost per customer

Rising profits

Maximize market share

Offer product extensions, service,warranty

Price to penetrate market

Distribution Build intensive distribution

Advertising Build awareness and interest in themass market

Maturity Stage of the PLC


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Maturity Stage of the PLC

Sales

Costs

Profits


Product

Price

Peak sales

Low cost per customer

High profits

Maximize profit while defendingmarket share

Diversify brand and models

Price to match or best competitors

Distribution Build more intensive distribution

Advertising Stress brand differences and benefits

Decline Stage of the PLC


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Decline Stage of the PLC

Sales

Costs

Profits


Product

Price

Declining sales

Low cost per customer

Declining profits

Reduce expenditure and milk the brand

Phase out weak items

Cut price

Distribution Go selective: phase out unprofitableoutlets

Advertising Reduce to level needed to retainhard-core loyal customers


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THANK YOU

launching strategies and plc

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