new product marketing: what really happens at work.... getting out of the thick of thin things!

Bryan Cassady Guest Professor, [email protected]

KU Leuven Master Class: New Product Marketing6/11 The real role of marketing

What really happens at work

Getting out of the thick of thin things


About this courseIt is a sad fact that most new businesses, products and service fail. Some estimate the failure rate is as high as 90%. This course is about why products fail and what you can do to increase your odds of success.

This lecture is a part of series of 12 lectures. In my classes I use a lot of videos. If you’d like to see the presentations with videos, go to: http://www.fast-bridge.net/resources/new-product-marketing/

I hope in the pages that follow you will find new ideas and inspiration… If you’d like to download the whole class go to: http://www.slideshare.net/bryancassady2/2009-course-new-product-management-by-bryan-cassady

If you have ideas on ways to improve this course or would like help with your new products, I’d love to here from you…

Bryan Cassady [email protected] +32-475-860-757

http://www.fast-bridge.net/resources/new-product-marketing/

http://www.slideshare.net/bryancassady2/2009-course-new-product-management-by-bryan-cassady


A less-than-optimal "configuration" of product or service attributes and benefits is selected.

Lack of a strong sustainable position in the market

Marketers fall in love with a product no one else loves

The marketing plan for the new product or service is not well implemented in the real world.

Marketers assess the marketing climate inadequately.

The plan is too complicated

A failure to ask the right questions and a belief that everything is a big idea

No Support to get things done

A questionable pricing strategy is implemented. A weak positioning strategy is used.

Cannibalization underestimatedThe advertising campaign generates an insufficient level of new product/new service awareness.

Over-optimism about the marketing plan leads to a forecast that cannot be sustained in the real world.

Too focused on the internal game not enough on the market

The Lemming effect


- Startup firm


Convert the value proposition into a market offering

Inbound

Product Development

OutboundProduct Marketing

Take the offering and the value message to market


“Outbound/Tactical”

Outbound-heavy role Understanding of product Understanding of vertical markets Less authority and direct influence Ability to manage interfaces Ability to communicate internally

“Inbound/Strategic”

Inbound-heavy role Close interaction with engineering Defining target markets Generating customer wins Broad authority and influence Ability to think strategically


Market requirementsPositioning framework

Product launchesList pricing/SKUs


Product Manager Influence(1-None, 10- Complete)

Defining Product Specifications 7.23

Managing Product Releases 6.96

Product Positioning 6.93

Product Upgrade Decisions 6.28

Managing Launch Events 6.44

Product Pricing 6.28

Product Packaging/SKU Decisions 6.31

Customer Segmentation 5.62

Consumer Promotions 5.48

Channel and Partner Promotions 5.15

Product Advertising 5.26

Channel Selection 4.78

Corporate Branding & Advertising 4.46


Product Development

Product Conception

Product Launch

Product Sustaining

Responsibilities:

Market research

Target market definition

Competitive analysis

Positioning

Market RequirementForecasts

Interfaces:

Customers

Research firms

Engineering

Finance

Sales

Responsibilities:

Refine market requirements

Customer research

Trade-off schedule vs. features

Interfaces:

Engineering

Customers

Partners

Responsibilities:

Product introduction plan

Customer demos

Refined forecasts

Sales training

Press kits

Trade shows Events collateral

Promotion/Advertising

BOM/Inventory

Responsibilities:

Sales training

Customer promotions

Trade promotions

Product updates

Next version planning

Interfaces:

Customers

Engineering

Tech support

Sales

Partners

Interfaces:

Customers

Sales

Analysts

Press

Engineering

Finance

Tech support


Yes No

Product Revenues 62.2% 37.8%

Product Profitability 61.5% 38.5%

Market Share 46.9% 53.1%

Customer Satisfaction 19.7% 80.3%


BusinessKnowledge

BusinessKnowledge

BusinessKnowledge

BusinessKnowledge

BusinessKnowledge

“What it does” “What it needs to do” Product functionality Product roadmap Product architecture Core technology Product bugs/gaps Product usability Complementary products Competing products

Who - Customer segments Why - Customer needs Where – End-use scenarios How often – Usage levels Why not – Usage barriers Who else – Customer DMU How – Customer DMP Purchase drivers Upgrade drivers Installation experience Usage experience Customization experience Support experience Upgrade experience Partner/VAR experience Unmet needs Known product problems Known service problems Brand/company image Customer satisfaction

Key demand trends (by segment)

Key technology trends Key alliances/partnerships Competitive products Competitors’ motivations Potential competitors Strengths/weaknesses

(company) Strengths/weaknesses

(product) Strengths/weaknesses

(partners) Strengths/weaknesses

(brand)

Customer insight process MRD development process Product planning process Budgeting process Product development

process Product testing process Product launch process Partner management

process

Company values Company vision/strategy Company image/brand Vision of the business Goals of the business


Importance (10 point scale)

Customer knowledge 8.81

Product knowledge 8.65

Competitor knowledge 8.21

Company business knowledge 8.00

Macro environmental knowledge 7.61


+/- 20% 20-30%

+/- 20% +/- 40%


Important !

What you know don’t know might be less important than what don’t know you don’t know


Important: remember we tend to over-estimate our capabilities I wouldn’t invest in this business


GroupGroup

PredictionScore

Group Size Worse PercentileNumber CorrectGroup

NumberIndiv. Avg

9 1 5 4 20% 7 4.4

1 1 9 8 11% 5 3.0

4 2 9 7 22% 5 3.2

10 3 7 4 43% 4 2.8

5 4 8 4 50% 4 3.0

2 4 5 1 80% 4 3.0

7 6 7 1 86% 4 4.4

8 3 8 5 38% 3 1.6

6 5 8 3 63% 3 2.9

3 7 8 1 88% 2 2.6

50%


Statement of Purpose

An introductory sentence that concisely and succinctly states the reason for the recommendation. Provides a context for the memo as a whole

Background

Factual analysis That connects the purpose of the memo to the strategic objectives of the company or the brand. Also provides facts in relation to the problem recommendation Is supposed to address.

Rationale

The reasons for the recommendation, and the logic by which the recommendation was reached.

Recommandation

The specific proposal on how to solve the problem or exploit the opportunity detailed in the background section.

Discussion

Details of the recommendation, anticipated questions or areas of concern, risk assessment, identification of other alternatives, details of the recommendation.

Next Steps

Who will be following through on the recommendation, what target dates they would be working towards, what actions they would be taking to execute the recommendation

Supporting Exhibits

Other supplementary information as appropriate.


(not looking for an answer but how to find the answer)

Is there a market for high priced (very effective) loan leads in Belgium


Note; if you want to make this east, think about how an advertisement is put together. Hook, Product (in your case your Reco) Benefit, Reason Why, Next steps.


Facts


Next assignment due

before the next class not Monday


Due Date AssignmentPresentation

GroupGrading Group

10/10/2007 What is the product (consumer + partner) 1 5

10/10/2007 What is the product (consumer + 2 6

10/17/2007 What are the right research Qs 3 7

10/31/2007 Pricing for value and profits 4 8

11/7/2007 Predicting business results/scenario planning 5 9

11/14/2007 15 minutes to fame; presenting your bus. Case 6 10

11/21/2007 A realistic into market timing 7 1

11/28/2007 What if, planning for the first 3 months 8 2

12/5/2007 Business Metrics – scorecard for success 9 3

12/12/2007 Launch advertising 10 4

Deliver your next assignment to group 10 and me

List of groups and group member sent by email to all class participants


Assignment due November 5 (this is Monday November 5)


Keys to evaluating advertising

And some fun to end the class7


Where is John

The beef West Drugs

[ ] Win [ ] Win [ ] Win

[ ] lose [ ] lose [ ] lose

What is your gut reaction?

Is a clear strategy communicated?

What’s the Big Selling Idea?

Is Drama used and is it good?

Product Registration and Recall

Is it convincing and distinctive

Does it motivate action?

Winner/Loser

Budget Allocation