New Products Management - CHAPTER 17 IMPLEMENTATION OF THE STRATEGIC PLAN potx

Tactical Launch Decisions and Actions, Showing Influences on Demand Promotion Advertising Cases where awareness will stimulate trial Coupons Reinforcing awareness Publicity New and co

CHAPTER 17

IMPLEMENTATION OF THE STRATEGIC PLAN

McGraw-Hill/Irwin Copyright ©2006 The McGraw-Hill Companies, Inc All right reserved

The Launch Cycle

Announcement

Sales and

Expenditures

Figure 17.1

Tactical Launch Decisions and Actions, Showing Influences on Demand

Promotion

Advertising Cases where awareness will stimulate trial

Coupons Reinforcing awareness

Publicity New and controversial technologies with high perceived usage risk

Sampling Cases where product advantages best learned through usage

Beta Test Sites Stimulating “sampling” and as a reference for other potential buyers

Sales and Distribution

Shows/Demonstrations Clarifying relative product advantages or where uncertainty exists

Technical Support Cases of incompatibility in usage process

Distribution Structure Cases where relative advantage strong (direct channels)

Intensity of Coverage Cases where warranty/maintenance service needs to be offered easily

Distribution Incentives Cases where availability needs to be stimulated

Pricing

Introductory Pricing High relative advantage and compatibility (skimming policy); early

adoption needs to be stimulated (penetration policy) Price Administration Cases where economic risk needs to be reduced (i.e., through rebates or

money-back guarantees)

Product

Breadth of Assortment Introducing new product categories with high relative advantage

Timing

Product Deletion High margin but strong relative advantage (fast deletion); high switching

costs (slow deletion) Preannouncing Building hype for new products; useful if relative advantage is high

Figure 17.2

managed.

public.”

(“vaporware”).

needed to overcome sales inertia

(“getting the ball rolling”).

this period, up to point where sales are increasing

at an increasing rate.

it? How do you know inertia has been overcome?

Copy Strategy Statement

 Communications tools used at launch will have certain deliverables.

 The way in which the firm communicates these

deliverables to the advertising and promotion creative people is the copy strategy statement.

 Typical contents:

 The market segment targeted

 The product positioning statement

 The communications (promotion) mix

 The major copy points to be communicated.

Typical Examples of Copy Points

largest in the world.”

limitation.”

hand-to-eye skills of computer games like this one.”

There is no limit to the choices here, but there must be a

focus Only a few copy points are going to be accomplished

at a time.

A-T-A-R Goals: The New Product

Group’s Obligation

and management that the plan can

achieve the necessary awareness,

availability, trial, and repeat purchase

and at acceptable cost.

Motivating Distributors

business.

the line.

Figure 17.3

Barriers to Trial

Appropriate Launch Tactics Given Relative Advantage and Compatibility

A Low Relative Advantage B High Relative Advantage

1 Low Compatibility Penetration price

Slow deletion Risk-based promotion (leasing, money-back guarantees,

equipment allowances) Intensive distribution

Preannounce Broad product assortments Information-based promotion (shows, demonstrations, websites, publicity/education)

Selective distribution

2 High Compatibility Secrecy before entry

Narrow product assortments Awareness promotion (coupons, etc.)

Intensive distribution

Skim price Fast deletion Usage-based promotion (samples, beta tests) to clarify benefits received

Selective distribution

Source: Adapted from Joseph P Guiltinan, "Launch Strategy, Launch Tactics, and Demand Outcomes,"

Journal of Product Innovation Management, Vol 16, No 6, November 1999, pp 520-521.

Figure 17.4