UNIT 16 – PRODUCT LAUNCH

Product Launch and its Objectives

The product Launch is the final stage of the new product development process in which the
decision is made to put the new product into full scale production and to launch it into the
market. The product launch signifies the point at which consumers first have access to a new
product. Promotion often begins prior to product launch as marketers prime the market. At this
stage emphasis may be on public relations in an attempt to encourage the media to discuss the
product prior to launch. The success of a new product depends not only on the idea behind the
product, but also on the marketing of the new product before, during and after the product
launch. New Product Launching (NPL) is part of the New Product Development. ―In the modern
world of business, it is useless to be a creative original thinker unless you can also sell what you
create. Management cannot be expected to recognize a good idea unless it is presented to them
by a good salesman. ‖ David M. Ogilvy

If we look at the market today, we observe that there is major competition for virtually all types
of products. This major competition has motivated companies to continue coming out with new
and innovative products in order to have an edge over competition. This can give companies
sustained success amongst a competitive market. That is why having a product launch plan is
very important for the success of a product. Here are four easy ways to get started with a
successful product launch plan. When the company creates a product launch plan, it is very
important that it has an understanding of its target market. If the company releases a product
amongst an audience that has no interest in its product, then the product launch plan will be a
tragic failure. Therefore, the company must really know its target audience before it comes up
with a product launch plan. Also, it is important that the company launches its product during a
time when there is maximum demand for its product in the market.

With a good product launch plan, it is necessary that the company market and presell its product
before the actual launch date. During this time, the company must use as many methods of
advertising as it can to get send out the message. Remember, that a successful product launch
plan always takes into account the target audience that it is marketing to. The company should
always include attractive bonus offers with its product when it begins to come up with the
product launch plan. Including bonuses and attracting offers with the product will improve the
chances of success and earnings gained from the launch. Another proven product launch plan
idea is to keep the price low initially during the launch, then raising the price to its normal price
after a few days.

The objectives of the launch are:

i. To give the product some momentum in the market.
ii. To announce it to all the customers.
iii. To use the opportunity to get some pre-booking for the product.
iv. To fill the distribution channel by telling all channel partners that after the launch
customers will want the product immediately.
 v. To inform internal customers that the development phase is over and that the product
is being commercialized.

Preparation for Launch

In order to launch the product in an effective manner the company as to undertake a large
amount of ground work before the launch date. The product launch strategy is a culmination of
a lot of work done on the product since its conceptualization through its development and testing
and finally to its launch. In order to launch a product, we need to work with funding, marketing,
public relations, development and many other channels to get the product off the ground.

In the preparation for the product launch the company must ensure that:
i. It has the right strategy for the product launch
ii. It has the right combination of the 4Ps so as to have a competitive edge in the market.

New Product Strategy – The New Product Strategy is developed right at the start of the
development process and it is fine-tuned throughout the development process. This strategy
provides the long term vision of the product and how this fits with the business objectives of the
company. At the end when the product is ready for launch it is this strategy that forms the basis
for its launch. The components of this strategy are:

The Competitive Strategy

 The competitive strategy defines for the company how the product will be differentiated in the
market from its competitors. It defines its positioning and what values the customer will seek in
the product. A lot of this is also based on the strengths of the company and what it is capable of
providing to its customers. The basis of defining the competitive strategy is how the company
wants the products success to be measured. Does the company look at the product in terms of
adding for the company the top line (sales) or bottom line (profit) or it expects to capture a large
market share, or it wants the product to help the company’s market penetration objectives. This
definition of the products USP in the market is defined at the time the product is approved for
development and the Customer Requirement Document is frozen. Subsequently as it passes
through the various development phases it might undergo subtle changes depending on how the
development takes place. If for example there is a road block in the development of the product
– a specific material is not available or is too expensive, or a technology needed is not available
because of licensing issues or any other problem and so the product specifications are modified
marginally the effort is to ensure that the competitive strategy is not changes. If some fine
changes are made needing some fine tuning the strategy may also be fine tuned along with the
development process.

This must outline the:

 Functional benefits of the product – these are benefits that can be measures in physical
terms as time, money, duration, etc
 Psychological benefits – these are those that gives to the customer a pleasant feeling
such as self esteem, feeling of power, pleasant view and so on The objective of the
 competitive strategy is to place the product in the market in such a way that it allows the
company to have an advantage over the competitor. The competitive strategy consists of:
 An analysis of competition their products and competencies
 A SWOT analysis of their products  A statement of areas where the company has an
advantage over competition
 It also gives how the new product will be positioned as compared to competitive
products.
 It also gives a scenario of the current market and a projection of the scenario by the time
the new product will be ready

See how Tata Motors got their competitive edge through their Chairman Mr. Ratan Tata‘s vision
at the end of this chapter.

The Market Strategy

This strategy outlines activities the company will need to take in order to meet its marketing
objectives defined in the competitive strategy. This document will define the sales channels that
the company will need in order to sell the product, the amount of advertising it will need,
methods it will use to approach customers, what after sale services will the company need in
order to support the product, in short all market related activities. This document aims at
positioning the company/ brand and the product vis-a-vis the competition in the market space.
The market strategy analyses the various aspects of the market and its customers. Form this the
company evaluates what types of customers are available in the market, it also tries to uncover
if there are any new applications or customer types that can be added to the new product being
planned, since this will enhance the area in which the product can be sold thereby increasing the
possibility of the products success. We know that any new product development originates from
a customer need or unfulfilled desire. The study and analysis of these unfulfilled desires has
already led us to begin new product development whose competitive advantages we have
outlined in the competitive strategy. Now added to this competitive advantage that the company
wishes to deliver to the customers it must also evaluate its own strength, the various types of
customers that can be targeted in addition to the initial segment that the product was aimed for.
Based on this analysis the company must find the best way of delivery of the new product if it
has to succeed in making a name for itself and ensuring that the product is successful in the
market.

The company must undertake an analysis of the following areas for making a successful
marketing strategy:
 Consumer analysis – In order to be able to sell to the customer the company must know the
customer. They must know his characteristics, his buying process and what type of benefits he
seeks – physical or emotional .
 Customer Characteristics – first of all we need to define if our customer is a business to
business customer or a business to consumer customer. A business to business customer
would be if a hotel buys bathing soap from a company. Here the company‘s customer is
buying in bulk and may be needing a special packing, and also a special price since the
 business customer is buying in bulk. However the same soap if it is bought by an end
consumer who is buying the product for his own use then he will be a business to consumer
type of consumer. He will buy in much smaller quantities, prices will be different, and the
way of selling and promoting the product will be different from the business customer
 The Buying process – every type of customer has their and this process varies from
product to product. So if a customer is buying a bathing soap the process, effort and
involvement the customer will have will be significantly different from that of buying a car,
or a consumer durable. So the company must evaluate:

 Who is the decision making person? In a Business-to Business the decision may be taken
by the manager so we must know which one is important to take the product decision to
him. In a Business-to-Customer situation the decision may be taken by the family or may
be taken by one person in the family – the father, mother or even the child. The more the
people involved in the decision making the more complicated the process.
 At what time or periodicity does he buy? The frequency of the purchase can have a
significant effect in the company’s strategy. For example, a large number of products are
sold during the marriage season or the festival season. This will vary with the
demographics of the population – Diwali and Eid come at different times of the year and
so the purchase pattern in demographically different area will vary.
 How does he buy? Depending on the different types of products and the customer
category the process of purchase will vary. It can be impulsive at one end of the spectrum
and highly considered at the other end of the spectrum. So if a person has to buy an ice
cream he may buy it on an impulse but if he has to buy a house he may consider various
options and look at each of them and take his time before taking a decision.
 How does he pay? Once the customer decides to purchase the product he must pay for
it. It has been seen that if the payment can be facilitating it can lead to an enhanced sale.
About two or three decades ago all payments were in cash. And so if a customer did not
have cash he could not buy a product until he saved enough money to buy the product.
However, over the last 10 to 15 years we have seen the introduction of various options in
payment. The introduction of credit cards, debit cards, loans for consumer durables,
homes and now internet banking has facilitated the sales of many products. If we see car
sales companies analyzed that customers do not have all the cash needed for purchasing
cars and so they tied up with financing companies to provide loans for their products.
These loans were provided at the sales outlet of the companies with the customer not
having to run around banks to get loans. Because of this convenience the customers
began to buy cars in a much larger number in comparison to what was being bought
earlier.

Market analysis – The company does not intend to sell to only one person. So it must know the
customer ‘s profile, thus it now has to group all the persons sharing the same profile: It is called
the customer market segment.
A market is a group of customers (or prospects) sharing their characteristics all of whom get
the benefits offered by the product or service.
Thus the company must first define the market for the company’s product. When we begin to
group customers we see that we find that for some product categories the user cannot be
categorized while in some cases we can do so. We thus have two broad categories of customer
markets:
 The Undifferentiated markets – these are the markets in which the product is used by all
categories of people without discrimination of age, sex, income, social standing. It has a
benefit for all categories or segments of the markets. For example, Coco-Cola, Pepsi – these
are consumed by virtually all segments of customers.
 Segmented markets – these are markets where products can be targeted to specific
customer segments or grouping of customers based on some parameters. The company
must segment the market into different segments based on its requirement of application
of the product.

These parameters could be:

 Demographic parameters – divide the population on measurable variables such as age,
sex, income, educational level and so on.
 sometimes can give valuable information based on the type of product.
 Geographical parameters – customers by area, city, state, country, market, etc.

Psychographic parameters – These parameters are emotional and difficult to measure but
Based on this definition the company must evaluate the total size of the market. While
segmenting the market the company must ensure that each segment must be:
Homogeneous: It means that a segment must be clearly different from other segments in the
same broad market. For example, a segment having people income ranging from Rs 20,000 to Rs
200,000 is not homogeneous and not useful for a marketing strategy.
Consistent: A segment must have a large number of prospects to allow a company to make profit.
The factors which can influence the size of a segment are the increase in population, the situation
of employment and the changes in income, the supply of resources, the evolution of laws, the
consumer tastes and preferences.
Profitable: A segment must generate profit. It means that the prospects in the segment must
have a sufficient income with regard of the product price. If you sell luxury car, it's not a good
idea to choose a segment which only contains middle income people.
Executable: It means that the company can reach the segment through advertising, sales force,
distribution. It does not make sense to choose a segment if it is unable to reach the people who
are in the segment. For example, if we want to sell a toy in Japan and if we do not understand
the Japanese culture we will never be able to sell in that market.

Once we have finalised the segment, the first task is to evaluate the size of the segment. This is
important as our sales projections are dependent on the total requirement. From this we need
to remove the quantities being sold by competing products or companies. This will then finally
give the gap available to us for selling. Once the market size has been evaluated the company
must analyse the growth trend of similar products in the industry and the industry as a whole.