Product Management

Session 10
Commercialisation
Session agenda

• OTB
• Commercialisation trends
• Organising the marketing function
• Business analysis
• *Consumer adoption
• *Marketing mix adjustments
• *Pitching
• Commercialisation & launch
management
• Implementation and control
On the Balcony
NPD Process
Commercialisation Trends
Trends in
Marketing Practices
• Reengineering • Focusing
• Outsourcing • Justifying
• Benchmarking • Accelerating
• Supplier partnering • Empowering
• Customer partnering • Broadening
• Merging • Monitoring
• Globalizing
• Flattening
Organising the marketing
effort
Organizing the Marketing
Department
 Functional organization
 Hub and spoke
 Geographic organization
 Matrix-management
Organization
 Product- or brand-
management organization
Functional Organization
Matrix Organisation
Hub-and-spoke system
Brand/Product Manager
Tasks
✓ Develop long-range/competitive
strategy
✓ Prepare marketing plan/sales forecast
✓ Work with agencies
✓ Increase support among sales force
✓ Gather intelligence
✓ Initiate product improvements
Product-/Brand-
Management Organization
 Product-Management organization
disadvantages
 Managers may lack authority to carry out
responsibilities
 Managers rarely achieve functional expertise
 Managers normally manage brand for a short
time
 Marketfragmentation makes it harder to
develop national strategy
Business Analysis
Business Analysis Defined
What is business analysis?

Business analysis is a
method of research for
identifying business needs
and offering appropriate
solutions for any of the
associated problems.

Solution range from

process management
improvement to software
to strategic planning.
Why Business Analysis?
➢ Normally conducted after screening

➢ Is refined after product development and

market testing for accuracy

➢ Iterative: Used when a more sophisticated and

detailed business analysis is required

➢ Helps you determine the costs and forecast

profits in future financial years

➢ Business analysis will also help to eliminate

inappropriate ideas and avoid unnecessary
costs
Business Analysis Outputs?
➢ With better data now available (based on a
developed product and a defined
production or supply process), you should redo
your initial financial and business analysis:
➢ Determine the BE, NPV, IRR, Payback Period, and
Productivity Index, identifying your key financial
assumptions

➢ Perform a sensitivity analysis on key financial

assumptions (for example, price, volume, costs)

➢ Assess the impact of the product on other products in

your company (for example, cannibalization)

➢ Identify your pivotal business and financial risks

➢ Prepare your Capital Appropriation Request (or CAPEX)

for equipment require
Finalise your product
price
➢ Review your market and competitor research and
your feedback from customers to determine the
selling price of your product

➢ Helps you maximize profits while maintaining a

good relationship with your customers

➢ Avoid serious financial problems that may occur if

your prices are too high or low
Price Research
1. Your pricing – cover costs / make profit;
compare favorable to your competitors.
2. Your existing costs – fixed costs; expected
cash flow.
3. Your competitors’ pricing –how do they
price?
Re-forecast your sales
volume
Recalibrate your estimate of the
volume of the product sales you
anticipate based on your research
and market test based upon:
• Customer needs
• Size of your existing customer
base
• Size of the market
Identify your break-
even point
Estimate the profitability of your
product, and determine your break-
even point - the amount of product
you need to sell to cover your fixed
costs (such as rent, electricity and
wages).
Consider the long term
➢ Forecast the lifespan of your product
in the market.

➢ How long will it be relevant to your

market's consumers?

➢ How long will it take you to realise a

decent return on your investment?

➢ What market share percentage

does it have the potential to realise?
Scope your marketing
strategy
➢ Review your overarching marketing
strategy:

➢ Pre-launch – review each element of the

marketing program (4/7 P’s) and
reconfirm understanding of costs

➢ Re-check positioning position your new

product in the marketplace.
Consumer Adoption
The Consumer-Adoption
Process
 Adoption
 An individual’s decision to become a regular
user of a product
 What does out Market Testing tell us about the
reality?
 What different strategies and tactics may be
required?
Stages in the
Adoption Process
Awareness

Interest

Evaluation

Trial

Adoption
Factors Influencing the
Adoption Process
 Readiness to try new products and personal
influence
Factors Influencing the
Adoption Process
 Characteristics of the innovation

✓ Relative advantage
✓ Compatibility
✓ Complexity
✓ Communicability
Adjusting the Marketing Mix
Distribution strategies
depend on the type of
product being sold. the
trick is knowing what
type of distribution you
will need to achieve
your growth goals.
There are three methods
of distribution that
outline how
manufacturers choose
how they want their
goods to be dispersed
in the market.
Pitching
Internal Marketing
 Internal marketing requires that everyone
in the organization accept the concepts
and goals of marketing and engage in
identifying, providing, and
communicating customer value
Pitching your Product or
Service
➢ INTRODUCTION: Establish common ground and grab attention.

➢ BIG IDEA: What is the main idea or essence of the project?

➢ WHY: Who is the target audience and what is your value

proposition?

➢ STATUS: What is the status of the project?

➢ THE ASK: What you are looking for right now? What is success for
this pitch?

Once you've addressed these 5 areas, you'll have the framework for
a pitch!
Commercialisation and
launch management
Commercialisation
Key considerations:

➢ Introduction timing. For instance, if the economy is

down, it might be wise to wait until the following
year to launch the product.

➢ Competitor activity. If competitors are ready to

introduce their own products, the company should
push to introduce the new product sooner.

➢ Introduction place. Where to launch the new

product?
➢ single location
➢ a region
➢ national market
➢ international market?
Launch Management
System
➢ Spot potential problems

➢ Select those to control

➢ Develop contingency plans – ‘what if’?

➢ Design tracking systems

➢ which variables
➢ Measuring system
➢ Trigger points
Spotting Potential
Problems
➢ Problems selects from the situation analysis

➢ Role play – what will competitors do?

➢ Review data on the new product ‘file’

➢ Consider hierarchy of effects needed for

customer satisfaction
➢ A-T-A-R
Spotting Potential
Problems
➢ Problems selects from the situation analysis

➢ Role play – what will competitors do?

➢ Review data on the new product ‘file’

➢ Consider hierarchy of effects needed for

customer satisfaction
➢ A-T-A-R
Implementation and control
Marketing
Implementation/Control
 Marketing implementation
 The process that turns marketing
plans into action assignments
and ensures they accomplish
the plan’s stated objectives
 Marketing
resource
management (MRM) software
Marketing
Implementation/Control
 Marketing control
 The process by which firms assess the effects of
their marketing activities and programs and
make necessary changes and adjustments

Annual Plan Control Efficiency Control

Profitability Control Strategic Control

Annual plan control
➢ Marketing metrics
➢ Sales metrics
➢ Customer readiness to buy
metrics
➢ Customer metrics
➢ Distribution metrics
➢ Communication metrics
Marketing audit

➢ A comprehensive, systematic,
independent, and periodic
examination of a company’s or
business unit’s marketing environment,
objectives, strategies, and activities,
with a view to determining problem
areas and opportunities and
recommending a plan of action to
improve the company’s marketing
performance
Marketing Audit
Components
Marketing Marketing
environment strategy

Marketing Marketing
function organization

Marketing Marketing
productivity systems
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