New product launch, strategies,

mistake, success & failure

BY

RENJINICHANDRAN

S3 MBA

GIMS , KADAKKAL

Introduction

New product launch is the most crucial aspect in the new product development . The success and failure of a product heavily depend on the new product launch .

Diffusion of InnovationRogers has suggested the use of diffusion of

innovation method for launching a new product. Not all potential users of a product or a new generation of a technology adopt the new product at the same time .Consequently , on the basis of the stage at which they adopt the new product, adapters traditionally are classified into five categories

1. Innovators 2. Early adapters3. Early majority4. Late majority5. Laggards

1. InnovatorsInnovators are willing to take risks, have the highest social status, have financial liquidity, are social and have closest contact to scientific sources and interaction with other innovators. Their risk tolerance allows them to adopt technologies that may ultimately fail. Financial resources help absorb these failures.

2. Early adoptersThese individuals have the highest degree of opinion leadership among the adopter categories. Early adopters have a higher social status, financial liquidity, advanced education and are more socially forward than late adopters. They are more discreet in adoption choices than innovators. They use judicious choice of adoption to help them maintain a central communication position

3. Early MajorityThey adopt an innovation after a varying degree of time that is significantly longer than the innovators and early adopters. Early Majority have above average social status, contact with early adopters and seldom hold positions of opinion leadership in a system

4. Late MajorityThey adopt an innovation after the average

participant. These individuals approach an innovation with a high degree of skepticism and after the majority of society has adopted the innovation. Late Majority are typically skeptical about an innovation, have below average social status, little financial liquidity, in contact with others in late majority and early majority and little opinion leadership

5. Laggards

They are the last to adopt an innovation. Unlike some of the previous categories, individuals in this category show little to no opinion leadership. These individuals typically have an aversion to change-agents. Laggards typically tend to be focused on "traditions", lowest social status, lowest financial liquidity, oldest among adopters, and in contact with only family and close friends.

The diffusion of innovations according to Rogers. With successive

groups of consumers adopting the new technology (shown in blue), its

market share (yellow) will eventually reach the saturation level. In

mathematics, the yellow curve is known as the logistic function. The

curve is broken into sections of adopters.

Rogers suggests that the rate of ease of adoption of new idea depends on the following elements

• Relative advantage: The degree to which the idea is perceived as better than the one it supersedes. The greater the relative advantage an idea has, the faster it will be adapted.

• Compatibility: The degree to which the idea is perceived as being consistent with existing values, past experience &needs of potential adapters.

• Complexity: The degree to which the idea is perceived as difficult to understand &or use. The less complex a new idea is , the faster rate of adoption.

• Trialability: The degree to which the idea can be tested .The easier it is to experimentally test a new idea ,the faster it will be adapted.

• Observability: The degree to which the result of an innovation are visible to others .The more observable these results , the faster the idea will be adapted. Providing free samples , trial packs make the product visible . High degree advertising also help in observability.

LAUNCH OF TYPE OF PRODUCTS

• Innovative product

• Imitative product

• Me too product

NEW PRODUCT SUCCESS

When operating in this technology driven era at a breakneck pace, firms cannot afford to take the time to complete the traditional forms of qualitative and quantitative market research –activities aimed at reducing a firm risk of failure. Taking 9 to 18 months to define and deliver a product is no longer an option

In many of today’s industries products must be conceived and delivered within 6 months or less to give a company a first to market position. As a result often eliminate or cut back on their customer research, taking on more risk than desired when rolling out their new products. With this added risk, firms are often forced to wait until the product is introduced to gain an accurate assessment as to how customers will respond. This is often dangerous proposition.

In the days weeks that follow a product’s introduction, evaluation are published or reported by trade magazines, user groups, industry waters, newsmagazines and other customer groups that have an interest of the product. During this period only companies are learning how potential customers perceive their products.

A marketer to ensure product success

guidelines may use the following • Distinguish your product from the competition

in a consumer relevant way

• Capitalise on key corporate competencies and brand strength

• Develop and market products to people’s needs & habit

• Market to long-term trends , not fads

• Don’t ignore research , but don’t be paralysed by it

• Make sure your timing is right• Be a marketing leader , not a distant follower• Offer a real value to customer• Determine a products short-term & long-term

sales potential• Gain legitimacy and momentum for the brand• Give the trade as good a deal as the customer• Clearly define, understand ,&talk to your target• Develop &communicate a distinctive & appealing

brand character... & stick to it • Spend competitively and efficiently , behind a

relevant proposition• Make sure the customer is satisfied ...& says that

way

According to Sanchez &Perez the

following ere the practices that need

to be done for new product successes

• Open organisations

• Broad jobs

• Employee autonomy

• Cross-training /job rotation

• Standardization

• Group technology

• Computer –Aided – Design/Computer-Aided Engineering

• Cross –Functional terms for innovation

• Supplier development

• Supplier partnership

• Just –in- Time purchasing

• Benchmarking

• Concurrent engineering

• Rapid prototyping

• Value analysis

• Design for manufacturing

PRODUCT FAILURES

• A product is a failure when there is

• Withdrawal of the product from the market

• Inability of a product to take off toward anticipated market share

• Inability of a product to fulfil anticipated life cycle

• Failure of a product achieve profitability

Studies have shown that in many industries 35-40% of new product effort fails. 46% of new product funding is wasted on failed or cancelled projects. Failures are different from FADS(which have a naturally short life cycle)Failure are not necessarily financial failures, although bankruptcy enough or misdirected product research or market research , failures include , but are not limited to products and services which pose health & safety hazards .Failure are not necessarily bad technical ideas . The study of failure is important in that it can help us prevent future failures

Reasons for the product failures

• The relationship of the company or its brands on the consumers will decide whether a product will be successful or not. Ponds decided to enter the toothpaste market because the consumers perception of Ponds as talcum powder, not as a tooth paste

• Too small a target market ,which is too specialised for the volume originally planned

• Too many new products in quick succession . Bajaj auto, the biggest scooter maker during 1998 launched 4 models and5 products upgrades . But none of them succeeded.

• Insufficient differentiation from existing offerings ,leading to another me-too product. Mac industries diversified into papad business but lost out due to the grey market Ponds toothpaste was similar as Colgate

• Poor or inconsistent product quality.

• No access to the market due to faults in the company's policy

• Poor timing in terms of the industry life cycle. No company ventured to offer new products during the recessionary times of 2008 . Even the film industry decided not to release more films during the secession

• Launching the product too early• Launching the product too late.• Poor marketing and not enough attention was paid

to main competitive alternatives.• The following statements are very important to get

the benefit this product offers were new to customers. The customers perceived the product features as novel/unique. This product offers improvements in existing product features.

Thank you....