As a strategic manager of a company, I have a certain responsibility for introducing or launching a new product in the market.
My decision is a key term to launching the product and depends the company image, goodwill and the financial growth of the company. So I think look in the following issues then it will be safe plan for the new product launch.
Market Segmentation Target Market Market positioning: Product Review
Total market share: Total competitors Ratio of the potential customers & scope for the market positioning SWOT analysis:
Goals and Objectives
Link between goals, objectives and priority:
Core Competency: What usually goes wrong: Launch our product:
It’s important to focus our attention on the group of people who are most likely to buy from us. Customers who are already buying a similar product can also make up our audience. we’ll be targeting a market that has already formed a need for our type of product. but does so in a way that adds features or functions better. It has to fill a demand in the market. We’re not spending marketing dollars on individuals who are not interested in our product. hotel room. therefore we should divide the market into sub segments. They identify and profile distinct groups of buyers who might prefer or require varying product and service mixes by examining demographic.
Our product is after all the most important part of our launch.
Market segmentation is a process by which market researchers identify key attributes about customers and potential consumers that can be used to create distinct target market groups. This is an audience that is already familiar with our products and with buying them from us. price and quality.that’s a built in market right there. Our new item must address all of these needs
. and behavioral differences among buyers. Not everyone likes the same cereal.most of the effort is simply lost in the context. Our product might be a new version of an existing one that we already sell. Consumers demand products that work on multiple levels – functionality. Advertising and Sales without a market segmentation base is like scattering breadcrumbs to a product -. This actually makes more sense financially. which can lead to disastrous results. If our item expands on the idea of an existing product. Businesses will often mistakenly offer new products to customers without proper research or planning. Start with our current customers. It must connect with and benefit enough potential customers to make it financially viable and successful. This is much easier than having to create that need in the first place. restaurant etc.
We cannot satisfy everyone in the market. psychographic.
unique or with little to no competition.
Total market share:
Market share is typically reported as a percentage and reflects the portion of a target market that is an actual customer base. A "market" is a universe of customers or clients who are interested in a particular product. They offered luxury styling and amenities at a price point far below the competition. the Apple iPhone was insanely popular even before it launched. which led to the shift in consumers’ minds. or company. expanding our product line helps us to offset sales fluctuations.
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New products help us to stay ahead of the competition. But in 2008. businesses seek to increase their market share. The profits associated with new products help to add to our bottom line. If our product or service is seasonal in nature.
New products can change customer’s perceptions about a company:
For decades Hyundai was barely even a consideration among those shopping for economy cars. Including:
New products have higher margins than older ones: This is especially true if they are innovative. there are other reasons why our business needs to launch new products. everything changed. In addition to reacting to changes in customer tastes and competitors products. Competition was hardly even a consideration. Because the figure for the possible / available revenue
. service. let alone luxury buyers. it should be a product that sells itself. when they released their Genesis sedan.and do so in a better way than what’s currently available. Ultimately. naturally. For example. An increase in market share often makes economies of scale available that can contribute to earnings and profit margins so. Market share may be reported as revenue or unit sales from a specific market divided by the total possible revenue or unit sales in that market.
or unit sales in a specific market must be estimated or extrapolated. It is mandatory for calculating the promotion cost of the new product.
We have to find out the total market share and the total number of competitors belongs in the market to find out the scope of our new product. Threat
External factors that offer a benefit (We have a strong business relationship with a local car dealership.
Ratio of the potential customers & scope for the market positioning:
After finding the total competitors in the market we will easily know about the unexplored market or the customers that is mean here by potential customers.)
. efficient car washes. SWOT analysis: SWOT stands for:
Strengths (External) Weaknesses (External) Opportunities (Internal) Threats (Internal)
Review of the Internal Environment Strengths. it is common for a firm to use market research to arrive at that figure.)
2.) Review of the External Environment Opportunities. we own a hypothetical company that offers fast. Weaknesses
Areas that place us at a disadvantage (We are unable to offer the lowest prices.
Characteristics of our company that give us an advantage (For example. Weaknesses.
Check how the competition markets itself. Evaluate how our product measures up to what’s already out there.
. put our self in the mind of the customer. whatever they use to interact with the public. they’ll be comparing us to the competition.2.) Our first step is to put together a list of other companies that have a product similar to the one we want to launch. However. We may think that our product idea is something new and unique and there is nothing in the market that can compare to it. advertising. Review their websites. Threats
External factors that may hinder our progress (A competitor is producing commercials that bad-mouth us. promotional materials. This will give us a good idea of how they portray themselves and the areas where you might need improvement. Our new product should be able to satisfy the needs of our customers and resonate with them better than our competition does. and we need to be prepared for that.
objective and philosophy. objectives and priority:
The product that we are wants to introduce in the market. and then is total opposite with the company goal. objective and the overall philosophy. because depending on this issue our image will build in front of the customer.Figure: New Product Launch in the Market
Goals and Objectives:
Link between goals. whether it is matched with the company goals. and we want to introduce new taste of cigarettes in the market. So we should be very careful about this issue.
. If our philosophy is like “Discipline is life” like BIRDEM.
Select pricing method Step: 6. and legal restraints on price. So we should set the price of new product in such a way that enables us to compete in the market and ensure the growth of the company. competitors’ reactions. Here we should charge minimum price. Estimate costs Step: 4. Select final price Step: 1. ignoring the effects of other marketing mix variables. or rate of return on investment. Maximum current profit: Companies pursuing this pricing objective estimate the demand and costs associated with alternative prices and choose the price that produces maximum current profit. Determine demand Step: 3. Steps in Setting Price: Step: 1. Select the price objective: We first have to decide what it wants to accomplish with its particular product offer. Analyze competitors’ costs. By emphasizing current financial performance the company may sacrifice long-run performance.
. the companies stay in business. Select the price objective Step: 2. Survival: We pursue this objective when it suffers from over capacity. and offers Step: 5. cash flow. intense competition. As long as the prices cover variable costs and some fixed costs. Prices. or changing consumer wants. Marketing Plan:
Setting the product price is one of the major issues in new product development.
assuming that the market is price sensitive. iii. ii. In the normal case. Here we should set the lowest price. social price (geared to the varying income situations of different clients) etc. Maximum market share: Companies pursuing this objective believe that revenue maximization will lead to long-run profit maximization and market share growth.
. Here we should charge a high price initially and gradually lower price. partial cost recovery. full cost recovery. viz. Step 2: Determining Demand: Each price that the company might charge will lead to a different level of demand and will therefore have a different impact on its marketing objectives. distributing. and the lower the price. That is. Estimate demand curves. the higher the price. demand and price are inversely related. Maximum market skimming: Companies introduce an innovative product usually follow pursue this objective. Price sensitivity. Here we should develop high-quality products and price them pretty high compared to most of the competitors’ products. Other Objectives: Nonprofit and public organizations may adopt a number of other pricing objectives. Product-quality leadership: Companies aiming to become product-quality leaders in the market usually pursue this strategy. the higher the demand. The company wants to charge a price that covers its cost of producing. Price elasticity of demand. the lower the demand. and selling the product. Following points are to be addressed in determining the demand:
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Step 3: Estimating Costs: Demand sets a ceiling on the price that the company can charge for its product.
Now suppose three firms compete in this industry. and offers: Within the range of possible prices determined by market demand and costs. and “Z”.9. Step: 4. Following points are to be addressed while estimating costs:
i. This decline in the average cost with accumulated production experience is called the experience curve or learning curve. Average cost falls with accumulated production experience. Average cost is the cost per unit at that level of production. Management wants to charge a price that will at least cover the total production costs at a given level of production. If all firms sell at Tk. “X”. Activity-based cost accounting:
Today’s companies try to adapt their offers and terms to different buyers. “Y”. prices.2 per unit. Fixed costs are costs that do not vary with production or sales revenue.including a fair return for its effort and risk. competitors’ costs.000 pen is Tk. Target costing:
Here. When the company has produced the first 200.000 ball point pens per day. Accumulated production:
Suppose our company runs a plant that produces 3. its methods improve. Prices. As we gains experience producing pens. Total costs consist of the sum of the fixed and variable costs for any given level of production. it is equal to total costs divided by production.
A company’s costs take two forms.8. each cost element – design. Thus the average cost of producing the first 100. Types of costs.10 per pen. and procurement costs fall. manufacturing. we make a profit of Tk. and different means are adopted to bring costs of each element at a target level. 9 thus can wipe one or both of the competitors.
iv. engineering. After its accumulated production experience doubles again to 400.
iii. A manufacturer. materials flow more smoothly. for example. The company
. sales – etc are examined. will negotiate different terms with different customers depending on the service rendered to them and the associated costs.000. the average cost is Tk. the average cost has fallen to Tk.000 pens.10. Workers learn shortcuts. and possible price reactions help the firm establish where to set its prices. Variable costs vary directly with the level of production.
ii. fixed and variable. Analyze competitors’ costs. To eliminate one of two of its competitors we can sell at a price of Tk.
. Influence of other marketing mix elements.e. including: • • • • A. Value pricing 5.b. and D.f. Once the company is aware of competitors’ prices and offers.a. Impact of price on other parties
After we’ve determined whom it is that we’re targeting with our product. psychology of prices (price-quality relation). The company also needs to learn the price and quality of competitors’ offers.needs to benchmark its costs against its competitors’ costs to learn whether it is operating at a cost advantage or disadvantage. It turns it into a “must have” item. What is it about our product that they should value the most? This is our unique value proposition (UVP). Sealed-Bid pricing
Step 6: Selecting the Final Price: Pricing methods narrow the price range from which the company must select its final price. Step 5: Selecting a Pricing Method: • • • • • • 5. B.d. C. It’s a way of making our product compelling. it can use them as an orienting point for its own pricing. we need to establish exactly why people will want to buy from us and not the competition. Markup pricing 5. In selecting the final price. Perceived-value pricing 5. Our UVP tells us audience what makes our product different and better than the competition. Company pricing policies. to the point that even if it was unavailable. Going-rate pricing 5. Target-return pricing 5. customers would wait for it and not even look at the competition.c. the company must consider additional factors.
we’re going to have to pursue them in different ways. Online Marketing – Websites. Guerilla Marketing. brochures. Promotional Literature – Business cards. media mailers. Direct Mail – Sales letters. online retail sites.
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Product distribution should be based on the product nature.
Financial objectives are generally described in quantitative terms for at least three years in the future: • Gross sales (increase) • Cost-of-goods (decrease) • Gross margin (increase) • Net income (increase) • Return on investment • Return on income
. radio. self-mailers. Marketing for our launch can be broken down into a few key areas:
Advertising – Television. Promotional Products. email marketing. If our product is consumable then the distribution system is different from if the product is service oriented. If we can do that. the more success we’ll have. magazine and outdoor. flyers. blogger and social media influencer outreach. postcards. CD mailers. online advertising. Another important thing is that whether we are unable to use the existing distribution system or not.The more channels that we can use to sell our product. social media. newspaper. statement stuffers. we can minimize the cost of the distribution. which means in order to guarantee the success of our product launch. Consumers get information from multiple sources.
Core Competency: Finally we should go for the production of the new product. Four of the most frequently used strategic approaches to setting a company apart from rivals and achieving sustainable competitive advantages are: Being the industry’s low cost provider. it may contain a summary of quarterly promotion and advertising plans. Marketing objectives are quantitative translations of the company's financial objectives.
.Businesses seeking outside funding and capital should provide a minimum of five years of projected income statements. although these are usually located in the financial section of the business plan rather than the marketing section. timing.and long-term company objectives and your marketing strategy. in marketing terms. Before going in that portion we should keep in mind some factors. For example: • Sales dollars • Sales units • Market share • Distribution levels/channel • Advertising awareness • Key account distribution The sales and marketing plan outlines each specific marketing event or action plan to increase sales. Sales and marketing plans should be a logical outgrowth of short. These may come from the following strategies. Those are how we can achieve the competitive advantage over the competitors. For example. and share or shipment goals for each program.
more attractive style. omitted.usually made in the interest of saving time. ignored. better service. a failure to understand customer needs and wants. When these corners are cut. and activities have to be repeated. all at great time and money expense. A poor definition of the product and market.
Developing expertise and resource strengths that give the company competitive capabilities
that rivals can easily initiate or trump with capabilities of their own. Poor Quality of Execution: New product development processes are deficient. poor quality of execution and moving too quickly – all converge on the homework phase being very fuzzy and ill defined. For instance. or erroneous. Through their awareness it is anticipated that Stanski Customers may successfully avoid these during their NPD projects. mistakes are made. wider product selection. Focusing on a narrow market niche and winning a competitive edge.
. Moving Too Quickly: Many of these errors include failure to do certain key tasks and short-cutting of others . added performance. combined with organizational bravado is a recipe for failure. Not Enough up Front Homework: Inadequate market analysis. the project moves off target. Lack of Market Orientation: Inadequate market analysis.
What usually goes wrong: Some of the most common pitfalls associated with new product development (NPD) include the items listed below. when key actions often considered central to success are arbitrarily omitted. these are usually indicative signs of poor execution. or unusually good value for the money. technological superiority. Outcompeting rivals based on such differentiating features as higher quality. and insufficient attention to the marketplace are consistently cited as major reasons for NPD failure.
our marketing campaigns need to begin their roll out as soon as possible. and people is the root cause of many errors of omission and poor quality of execution. Think about holding a launch event so you can build up buzz. We should also establish our web presence prior to the launch event. This gives customers somewhere to go to get information on our product immediately. Provide members of the media with a press packet and give them access to our product for review. or seminar. Consider holding our event at a trade show. There is no turning back once people know about our item and if we’ve done our job correctly. No Focus. Whichever we choose. Lack of Product Value for Customer: Moving ahead into product development with vague understanding of customer requirements leads to too many ill defined products. networking group. The lack of time. Launch our product: No matter how we conduct our launch. and Lack of Resources: This is one of the most common new product development scenarios that plague organizations. thus resulting in poor market adoption. This is why we’ll need to create a new product launch plan. conference. people are going to want what it is we’re offering. Too Many Projects. make sure that we use our public relations skills. This includes all advertising and direct mail. In order to capitalize on the momentum built by our launch event. This in turn has serious consequences on product development as scarce resources are dissipated across many fronts and the truly deserving projects are under resourced. we need to make 100% certain that our product is complete and ready to be purchased by the public. money. We’re looking to reach the exact audience that will turn into someone willing to pay for our product.
. These new products add no value or minimal benefit to customers.