New Products Management

Chapter 21

Launch Management

Launch Management Concept Showing Remedial Action

% aware whohave tried

As of now Goal

Launch Now 6 months

Time

PlanActual

With action

Without action

Figure 21-1

The Launch Management System• Spot potential problems.

• Select those to control.

– Consider expected impact/damage.

• Develop contingency plans for the management of problems.

• Design the tracking system.

– Select variables.

– Devise measuring system.

– Select trigger points.

Adage: in driving a car, it is the potholes you don’t know about (or forget about) that cause you damage.

Spotting Potential Problems• Problems section from the situation analysis.• Role-play what competitors will do.• Look back over all the data in the new product's

"file."• Consider hierarchy of effects needed to result in a

satisfied customer (A-T-A-R).

A-T-A-R Hierarchy: Where Does the Problem Lie?

Aware

Unaware

Tried

NotTried

ReusedNot R.

Does the problem lie in awareness, trial, or repeat?

Figure 21-2

Problems at Launch: Philips DCC Machine

• Advertising: Missed lack of product understanding; used DCC term without defining it.

• Resellers: In relaunch, marketed only to those dealers who supported and were willing to invest in the concept.

• Price: Cut price too much, depleted inventories, dealers sent back tapes.

• Consumer Attitudes: Preferred CD-ROMs to DCC tape format (whether right or not).

All of these problems could have been identified and managed!

Select the Control EventsOf all potential problems,

• Which have enough impact to warrant investigation?

• Which of these ought to be given special consideration?*

• Which of these should be given contingency planning?

• And which of these need to be tracked?

*Basis: Consider potential damage and likelihood of occurrence.

Develop Contingency Plans• "Is there anything we can do?"

– E.g.: competitive price cut or product imitation.

• Base contingency plan on type of problem:– 1. A company failure (e.g., inadequate

distribution)– 2. A consumer failure (e.g., low awareness or

trial)

Designing the Tracking System

• Select the tracking variables– Relevant, measurable, predictable

• Select the trigger points

• Consider the nontrackable problems

Questions from New Product Tracking StudyCategory Usage Questions

In the past six months, how many times have you bought (product category)?

What brands of (product category) have you ever heard of?

Have you ever heard of (brand)? (Ask for 4 to 6 brands)

Have you ever bought (brand)? (Ask for 4 to 6 brands)

About how many times have you bought (brand) in the past six months?

Advertising Awareness Questions

Do you recall seeing any advertising for (brand)? (ask all brands respondent is aware of)

Describe the advertising for (brand).

Where did you see the advertising for (brand)?

Figure 21-6

Questions from New Product Tracking Study (continued)

Purchase Questions

Have you ever bought (brand)?

If "Yes":

How many times have you bought it?

How likely are you to buy (brand) again?

What did you like/dislike about (brand)?

What do you think of the price of (brand)?

If "No":

Did you look for (brand) in the store?

Why didn't you try (brand)?

How likely are you to try (brand) in the future?

Figure 21-6(cont’d.)

A Sample Launch Management Plan

Potential Problem

Salespeople fail to contact general-purpose market at prescribed rate.

Tracking

Track weekly sales call reports (plan is for at least 10 general-purpose calls per week per rep).

Contingency Plan

If activity falls below this level for three weeks running, a remedial program of one-day district sales meetings will be held.

Figure 21-7

Another Problem IllustratedPotential Problem

Potential customers are not making trial purchases of the product.

Tracking

Begin a series of 10 follow-up calls a week to prospects.

There must be 25% agreement on product's main feature and trial orders from 30% of those prospects that agree on the feature.

Contingency Plan

Special follow-up phone sales calls to all prospects by reps, offering a 50% discount on all first-time purchases.

Figure 21-7(cont’d.)

Reason ExamplesTechnology advances lead to productobsolescence.

386 chip replaced by 486; 486 chip byPentium

New generation product cannibalizesdemand for current product.

Windows 3.1 replaced by Windows 95;Windows 95 by Windows 98

Users prefer or demand alternativesolutions.

Slide rule; 8-track tape player

Profit margins shrink due to greatercompetition or operational cost increases.

New car sales

Product category does not fit the firm'sstrategic focus.

Sears spun off Allstate; Coca-Cola spun offColumbia Pictures

Product category does not fit othercompany product categories or groups.

Kraft Foods sold Entenmann's Bakeries;General Mills sold Olive Garden

Key components are no longer availablethrough suppliers.

Raw paper and lumber supplies

Product is too difficult to support, due tounique or complex technologies involved.

AT&T withdrew from PC business

Increased global competition. Airlines; microwaves; televisionsProduct presents a toxic or hazardoussituation.

Ford Pinto; breast implants

Funds are reallocated to other new productopportunities.

New Coke; consolidation of new carmodels by Jaguar Motor Cars

Reasons for Product Discontinuation

Figure 21-8