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Commercial Planning is the term commonly used for commercializing a product. 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 method. 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 A practical example is used in this article to give a clear view of the results and the functioning of this method. The case that is used in this article is as follows: A software company (further mentioned as T-computing) has developed mainly office software, but is now developing a new computer game. The game is almost in the testing phase and the company expects to finish the development in 6 months. Its now time for preparing to launch this computer game into the market.
Method purpose
The new product launch method, as described in this article, gives a checklist of important activities for launching new products. It specifies strategic and tactical activities in the marketing area, which conducts in a strategic plan and a tactical plan. These plans are a preparation for launching a new product.
Method explanation
This method has no strict order in activities, except for the main two activity categories: 1. 2. Create a launch strategy Create an approach for the product launch
The top-down approach is used, so the launch strategy must be developed before the approach for the NPL. These main activities are shown on the right in figure 1: the meta process diagram of the New Product Launch method.
Strategic planning
A launch strategy gives a long-term vision about the new product. During the first activity, research will be done to create a strategic plan for launching the new product, and the changes in the company regarding to the new product.
Example: the computer game is a first-person shooter and other software companies and resellers also sell this kind of game. T-computing has to find out what the competitive advantages are, in respect to the competitors. It could mean that the companys game is far less aggressive than the other games, which is more attractive for children under 16. But on the other hand, older people often do not appreciate a shortage of violence in first-person shooters.
3. 4. 5.
Example: the first-person shooter far less aggressive than other first-person shooters. After the market analysis and consumer analysis, it appears that children under the age of 16 really like this kind of game. An approach for reaching this customer group is to make publicity on products that they like, as candy and soda.
Example: if T-computing wants to grow in the Dutch gaming industry and get a market share of 10%, it has to find out how that is possible and which actions have to be taken. For example: should T-computing make game-development a core industry?
Example: if T-computing wants to have a long product life cycle for the first-person shooter game, because of high development costs, it has to decide how to keep the product interesting and innovative during the whole
PLC. It is possible to plan updates for new weapons, levels and characters in the game, so that the game gets renewed.
Tactical planning
After creating a launch strategy, an approach for launching the new product has to be defined. This activity uses the marketing mix structure for preparing the NPL on a tactical level. The outcome of this activity is a tactical plan.
In combination with the define breadth of assortment, it forms a product plan. This plan contains information and decisions about the new product and is part of the tactical plan. Example: because it is the first computer game, created by T-computing, it can define a new brand, where the game belongs to. A brand extension is not possible, because of the great difference between office software and games. If T-computing does not work with brands for products, it is possible that the brand is the company itself.
Purpose: the price level of a new product is essential for selling the product. Product: in combination with the define pricing policy, it forms a pricing plan. This plan contains information and decisions about the pricing of the new productand are part of the tactical plan. Example: the targeting customer group is younger than 16 years. These people often dont have much money to spend, so the price cannot be too high. After a market research, it appears that the targeting customer group wants to spend about 15 to 30 Euros for a game. T-computing can now make a price level, because the expectations from the customers and the costs per product are known.
Purpose: defining the promotion expenditures gives a clear view on the costs for promoting the new product. This information can be used in calculating the price level of the product. Product: in combination with the define sales force intensity activity, it forms a promotion plan. This plan contains information about the promotion costs and activities and is part of the tactical plan. Example: T-computing has to find out the combination of which, and how much, promotion activities are best for reaching the targeting customer group(s). The balance between promotion expenditures and promotion activities has to be found. Children under 16 years watch often TV, but seldom read books or magazines, so an expensive TV commercial is probably better than a, cheaper, advert in a magazine.
Purpose: defining the distribution expenditures gives a clear view on the costs for distributing the new product. This information can be used in calculating the price level of the product. Product: a distribution plan (see paragraph 2.2.7). Example: T-computing has to determine the cost of distributing the product to resellers and directly to the customer. The cost per product will be defined by the way of transport: the faster the transport, the higher the cost.