You are on page 1of 86


New to the world

Adapts or replaces an existing product.
Broadens the market for existing product.
Old product introduced into a new market
An old product packaged and marketed in a
different way.
I pad
Google +
Mars Ice Cream
BMW Bikes
Additions to the product line
Polaris Software
Product Improvement and
Maruti 800
Maruti Alto
Maruti Wagon R
I Generation - 1993- 1998
II Generation - 1998- 2003
III Generation - 2003- 2008
IV Generation - 2008- Present
Tata Nano
New Products Can be Used To
Increase market share
Appeal to new segments.
Diversify into new markets.
Improvements of existing products
Introduction of a new product or a version of a
product into the segmented market
Put the Focus on the People, Not the
Product--- Steve Jobs
Product Launch- Definitions
The process by which a new product is
introduced into the market for initial
sale. It includes the engineering, market
analysis, and the development of a
communication strategy.
Product Launch- Definitions
A Product Launch is a marketing strategy
consisting of a carefully planned and
scheduled sequence of events with the
goal to make a big happening out of the
release and, of course make as much
sales as possible in a short time span
Product Launch- Definitions
Product Launch is the most intense part
of the product cycle. It is the period
where the product is announced to the
outside world and the first order can be
Product Launch- Definitions
Product launch is the orchestrated
introduction of a new product (or
version of a product) to the market; the
events surrounding making the product
available for purchase for the first time.
Why a product launch?
To show the people a compelling
picture of how the product is
going to make their life better
How the product is going to fit into
the life of the people
To make the people aware of the benefits and
usage of the new product
Why a product launch?
To satisfy additional customer
Spotting an additional way of
adding value to your existing
As a means of diversifying
and Testing
The New Product Development
The New Product Development
Factors That Limit
New Product Development
Shortage of effective ideas
Social and governmental constraints
Cost of development
Capital shortages
Faster required development time
Shorter product life cycles
Idea Generation: Creativity Techniques
Attribute listing
Forced relationships
Reverse assumption
New contexts
Mind mapping
Internal sources
Company employees at all levels
External sources
P&G marketers spend at least 12 hours a
month with consumers in their homes ,
watching how they wash dishes, clean floors
and brush teeth and asking them about their
habits and sources of frustration.
Toyota claims its employees submit 2 million
ideas annually.
Microsoft studied 13 to 24 years old and
developed Net Gen to satisfy their instant
messaging needs.
Idea Screening
After the firm identifies potential
products, it must screen them. In product
screening , poor, unsuitable or otherwise
unattractive ideas are weeded out from
further actions.
Idea Screening
No Error can occur if company permits
poor ideas to move into development
and commercialization.
Does the product meet a need?
Would it offer superior value?
Can it be distinctively advertised?
Does the company has necessary capital?
Is there sufficient demand?
Does it fit the firms image?
Concept Development
Product idea
A product idea is a possible product the company might offer to the market.
A car manufacturer figures out
how to design an fuel cell
powered electric car that can
go as fast as 110 km per hour
and as far as 370 km before
needing to be recharged. The
manufacturer estimates that
the electric car's operating
costs will be about half those
of a regular car.
Customers, do not buy a product
idea; they buy a product concept
Concept 1. A moderately priced subcompact
designed as a second family car to be used
around town. The car is ideal for running
errands and visiting friends.
Concept 2. A medium-cost, sporty compact
appealing to young people.
Concept 3. An inexpensive subcompact
'green' car appealing to environmentally
conscious people who want practical
transportation and low pollution.
Concept Testing
Concept testing calls for testing new-product concepts with a
group of target consumers. The concepts may be presented
to consumers symbolically or physically.
Here, in words, is Concept 3: An
efficient, fun-to-drive, fuel-cell-
powered electric sub compact car that
seats four. This high-tech wonder runs
on hydrogen created from methanol
fuel, providing practical and reliable
transportation with almost no
pollution. It goes up to 110 km per
hour and, unlike ordinary battery-
powered electric cars, never needs
frequent recharging.
After being exposed to the concept, consumers may
then be asked to react to it by answering the questions:
Do you understand the concept of an hydrogen cell electric car?
Yes( ) No( )
Do you believe the claims about the car's performance?
Yes( ) No( )
What are the main benefits of the electric car compared with a
conventional car?
What improvements in the car's features would you suggest?
Who would be involved in your decision to buy such a car? Who would
drive it?
Would you buy such a car?
Definitely( ) Probably( ) Probably not( ) Definitely not( )
The answers will help the company decide which
concept has the strongest appeal.
Identify concepts that are particularly liked or
disliked by potential buyers.
Feedback might suggest ways to refine the
Concept testing of prototypes can help avoid
costly mistakes.
Why Concept Testing?
Examples of Concept Testing gone
Marketing Strategy Development
Suppose the car manufacturing company finds
that Concept 3 for the fuel-cell-powered electric
car tests best.
The marketing strategy statement consists of
three parts.
I. The first part consists of:
1. Target market
2. product positioning
3. Sales,market share and profit goals
Target Market
Moderate-to-high income individuals
Couples or small families
Environmentally responsible/ Socially
The car will he positioned as:
More economical to operate
More fun to drive
Environmental Friendly: Less polluting
Better than battery powered electric cars
Business Analysis
Business Analysis
Estimating Sales, Costs,
and Profits Projections to See if
They Meet Company Objectives
If Yes, Move to
Product Development
If No, Eliminate
Product Concept
Estimating Total Sales
It is sum of 1
time sales, replacement sales and
repeat sales
Tasks Involved in Sales Estimation
Estimating first time purchases of the new product
Estimating replacement sale by estimating the
number of units that failed in one year.
For a frequently purchased new products, the seller
has to estimate repeat sales as well as first time
Estimating Cost & Profits
Costs are estimated by R&D, Manufacturing,
Marketing and Finance departments.
They project cash flow statements for certain
period of time say 5 years and evaluate that
how much time it will take product to enter
into pay back stage.
Pay back stage is the stage when company
started recovering all its investments.
Product Development
Product development converts a product idea
into a physical form and identifies a basic
marketing strategy.
It involves working prototype construction.
Quality Function Deployment
Customer Attributes
Engineering Attributes
Product Development through
Large companies will sometimes buy a
small companies rather than develop their
own new companies.
Microsoft acquires Nokia
PepsiCo purchased Tropicana Products.
Test Marketing
Launching a product in a small geographical area
A field experiment in realistic market setting
-To predict likely results of a national launch
-To test the operational effectiveness of
the marketing plan
-To identify possible problems
-To assess consumer reaction
Customers Test
Alpha Testing
Beta testing
Examples Of Customer Testing
P&G has on site labs such as diaper testing
centre where dozens of mothers bring their
babies to be studied.
Yahoo, Google always comes with their beta
products initially to be tested by users in real
scenario and rectify the bugs reported
Market Testing
After management is satisfied with
functional and psychological
performance, the product is ready to be
branded with a name, logo, and
packaging and go into a market test.
3 Types of Market Testing
Sales Wave Research
Simulated Test Marketing
Controlled Test marketing
Sales Wave Research
Consumers who initially tried the product at
no cost are reoffered it at slightly reduced
prices than competitors one.
Offer can be made 5 times.
Company notes how many customers select it
again and their reported level of satisfaction.
Simulated Test Marketing
30 or 40 qualified shoppers are asked about
brand familiarity and preferences in particular
product category and screened to them both well
known TV commercials or print ads and
advertisement of new product but is not singled
out for attention.
Consumers receives small amount of money and
asked to purchase any item.
Consumers are asked the reasons for their
purchase and non purchase.
The company notes how many consumers buy
the new brand and competing brands. This
provides a measure of the ads relative
effectiveness against competing ads in
stimulating trial.
Those who did not buy the new brand are given a
free sample.
Some weeks later they are interviewed by phone
to know about products value in terms of
Problems of Test Marketing
The test phase might not be a true indicator
Environment might change between the test and
the national launch, like any natural calamity.
Competition may disrupt the test marketing by
engaging in exceptional marketing activity.
Test marketing alerts competitors.
P&G Bleach V/S Clorox
P&G developed a prototype and entered into
market to test their product which is a Bleach.
Do you know What Clorox the Rival did?
They gave every household in Portland, Maine, a
free gallon of Clorox bleach- delivered to the
front door
And nobody in Portland, Maine, was going to
need bleach for several months and moreover
Clorox even gave consumers a $1 off coupon for
the next gallon.
Test Marketing thus subject to external factors.
Commercialization is the process of
introducing a new product or production
method into the market.
First entry-Firm enjoys first mover advantage
Parallel entry-Firm might time its entry to
coincide with the competitors entry
Late entry
Where(Geographic strategy)
Small companies select an attractive city
Large companies introduce their product into
a whole region
National Launch
Global Launch
To Whom(Target Market Prospects)
Early adopters
Heavy users
Opinion leaders
AIM- To generate strong sales as
soon as possible to attract
further prospects
Woodland: Are you a Woodlander?
identity has been adventure
with shoes
Woodland was launched in the
global market in 1992, and in
1994 it was introduced in India
positioning was very different
from other brands sporting
images.They talked about
adventure and nature through
their retail presence
Nestle-Maggiits different
Nestle launched its noodles in
indian market in early 1980s,but
it took several years to establish
brand.It had targeted the
convenience of working women.
Nestle repositioned the brand
towards the children using sales
promotion and smart advertising.
Taste bhi health bhi-Maggi Atta
Press Release
Online marketing/Blogging/Social Media
Television Ads
Event Launches
Publicity Campaigns
Road Shows
Bill Boards
Products or services launched through
promotional events
Launch of Tata Nano
Mostly Movies and Serials will be launched
through trailers
Products or Services can be launched
through Ad Campaigns
Toyota Etios Launch
Products launching through News Papers ,
Launch Of Maruti Swift
Product Launch promotion through Bill
Bill Board of Mc Donalds introducing Espresso
Caution: Dont Promote What
You Cant Deliver
E-Bay made grandiose announcements about
their entry into the Japanese market, well
before they had a localized product ready to
launch in Japan and failed.
Nokia N8 promoted as another innovation but
lags far behind than even first generation
APPLE! And thus failed.
Product Launch
Launch like Steve Jobs: 7 Ways to
Build Your Next Product Launch
iPhone Launch
1. Put the Focus on the People, Not
the Product
Dont just talk about what
your product does
Show them a compelling
picture of how its going to
make their life better. Thats
what gets people excited.
2. Get Opinion Leaders On-Board
Apple has a knack for getting
bloggers and other opinion
leaders on board before their
product launches.
They get everyone talking
months before the product
launches .
Theyre talking about what it
might do
3. Be Revolutionary
Do something none
of your competitors
have ever done
Paint a picture of
the future that your
customers want to
live in
4. Turn Your Product Launch into an
They stage an entire event
around it, going so far as to
even close their online store,
so that everyone knows
something important is
happening and they need to
pay attention.
5. Take Pre-Orders
Apple almost always offers
pre-ordering of their new
Its not uncommon for them
to sell hundreds of thousands
of units within a week of
6. Release a Product Your Customers
Will Want to Show off
Dont underestimate the
importance of your products
A professional design makes
people want to talk about it
online or offline, it can have a big
impact on your product sales
7. Draw out the Suspense for As Long
As You Can
The mystery will drive your customer base into
a frenzy.