T:New Product Marketing

Strategy
• Learning Objective
• Steps of launching new products
• Reason of failure
• Seller-Customer Mismatch
• By and large 13 steps
 New Product development stages
 Initial screening
 Preliminary market assessment
 Preliminary technical assessment
 Detailed market study
 Preliminary business analysis
 Product development
 Alpha tests
 Beta tests
 Test market
 Trial production
 Final business plan
 Production ramp up
 Market launch
 New Product Taxonomies
• See Page 47 of article: New Product
Commercialization: Common Mistakes
Exhibit 1: New Product Taxonomies
• Ref Newness to Market: New-to-World
Products is only 10% out of total new
markets
Why most of the new products fail?
• Because Marketer and Customer do not
see eye to eye.
• One of the reason is switching
cost/switching convenience
• Ref Figure 4: Nature of Marketing Tasks in
page 50
• For simplicity we divide “Breakthrough”
and “Incremental”
Why most of the new products fail?
• Breakthrough product requires intensive
technology and /or application
development.
• It often doubtful whether large number
customer really understand the product
usage
• While few “opinion leader” customers may
share the vision
Why most of the new products fail?
• In contrast, customers play major role in
incremental product as they view as
evolutionary development. Sales and
marketing have crucial role to play
 Mismatch
• Refer fig 3: New Product Types in pg 48 and fig
5: Seller-Customer Mismatch
• Shadowed New Product: We don’t mean
technical merit or customer benefit is negligible;
product’s contribution in economic term to
company’s portfolio is relatively minor in short
term eg.3M’s post-It.
• These products discovered in the shadow of
more important activity.
• Cost very little but imaginative marketing could
add new customer segment
 Mismatch
• Delusionary New Product: Largest proportion
of new product failure comes from here. New
and improved positioning
• eg. failure of MDF; Sonny’s walkman success
after price down from $165 to $100 in 3 years
 What we have learnt?
• The mismatches – the shadow and delusion
could be corrected by aligning with
Breakthrough or Incremental – but it has to be
done from customers’ view point; alignment will
not automatically come -- it has to be carefully
piloted through 13 steps
• But at least if ideas are right and when
accompanied by good execution, the chances
of success are maximized.
• On the other hand, if alignment is mismatched,
no amount of creativity and executional
excellence can remedy a guaranteed failure