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LAUNCH P ART F IVE

Launch Figure V.1

The Five Decision Sets that Lead to a Marketing Plan Figure V.2

Common Myths About Marketing Planning for New Products Marketing people make the decisions that constitute a marketing plan. The technical work is complete when the new item hits the shipping dock. Marketing people take over. The marketer’s task is to persuade the end user to use the new product. The more sales potential there is in a market segment, the better that segment is as a target candidate. The pioneer wins control of a new market. As with Broadway shows, opening night is the culmination of everything we have been working for. Figure V.3

CHAPTER SEVENTEEN STRATEGIC LAUNCH PLANNING

Strategic Givens Corporate, some team decisions made earlier. Often found in the PIC Guidelines. A specified gross margin: affects funding. Speed-to-market: affects promotional outlays and schedules. Commitment to a given channel: affects distribution plan. Advertising policy: affects promotion decisions. Pricing policy: affects decision to use penetration or skimming pricing (slide down demand curve).

Revision of PIC Goals Customer Acceptance Goals –Use –Satisfaction –Sales –Market Share Financial Performance Goals –Time to break even –Margins –IRR, ROI Product Level Performance Goals –Cost –Time to Market –Performance –Quality Other –Competitive Effect –Image Change –Morale Change

Strategic Platform Decisions Permanence Aggressiveness Type of Demand Sought Competitive Advantage Product Line Replacement Competitive Relationship Scope of Market Entry Image

Permanence Permanent, stand-alone. Permanent, but as a bridge to other items -- e.g., platform strategy. Temporary. Given firms’ tendency to develop streams of products, more and more new products are actually only temporary.

Some Other Strategic Platform Decisions Aggressiveness (aggressive versus cautious attitude at entry) Type of demand sought (primary versus selective) Competitive advantage sought (differentiation, price leadership, or both) Competitive relationship (aim at a competitor, avoid a competitor) Image (create a new image, tweak an existing image, use the already-existing image)

Product Line Replacement Strategies Figure 17.1

Scope of Market Entry This is not test marketing. This is launch. All forces in place and working. Roll out slowly -- checking product, trade and service capabilities, manufacturing fulfillment, promotion communication, etc. Roll out moderately, but go to full market as soon as volume success seems assured. Roll out rapidly -- full commitment to total market, restricted only by capacity.

The Target Market Decision Alternative ways to segment a market –end-use, geographic/demographic, behavioral/psychographic, benefit segmentation Micromarketing and mass customization Also consider the diffusion of innovation

Aqualine Islands Splash Molokai Sunflare Fashion Comfort Using the Joint Space Map to Identify Benefit Segments Figure 17.2

Factors Affecting Diffusion of Innovation Relative Advantage Compatibility Complexity Divisibility Communicability

Product Positioning Who -- Why -- How To whom are we marketing? Why should they buy it? How do we best make the claim?

To Whom Are We Marketing? Users vs. non-users (primary vs. selective demand) Target market criteria (demographic, geographic, psychographic, benefit segmentation) Everybody -- no narrowing down (mass customization, Post-It notes) The real issue here is commitment -- by all NPD participants and by management

Why Should They Buy It? This too we have been testing -- basic concept statement used for testing and for guiding technical (e.g., QFD “Whats”), and the key reason on the “How likely would you be to buy this if we marketed it?” (product use test) Formatted in three ways: –Solves major problem current products do not. –Better meet needs and preferences. –Lower price than current items.

How Do We Make the Claim? Product positioning statement is a strategic driver --a core item -- not a list of advantages. Some new products get one short sentence -- technical items more. Can be stated as one or more features (what it is). Can be stated as a function (how it works). Can be stated as one or more benefits (how the user gains). Can be stated as a surrogate (no features, functions, benefits).

Product Positioning Options Position to an Attribute Feature Function Benefit (direct or follow- on) Position on a Surrogate Nonpareil Parentage Manufacture Target Rank Endorsement Experience Competitor Predecessor Figure 17.2

Branding Decisions What is the brand’s role or purpose? Are you planning a line of products? Do you expect a long-term position in the market? How good is your budget? Physical/sensory qualities of brand considered? Message clear and relevant? Insulting or irritating to anyone?

Questions and Guidelines in Brand Name Selection Figure 17.8

Crapsy Fruit French cereal Fduhy Sesane China Airlines snack food Mukk Italian yogurt Pschitt French lemonade Atum Bom Portuguese tuna Happy End German toilet paper Pocari Sweat Japanese sport drink Zit German lemonade Creap Japanese coffee creamer I'm Dripper Japanese instant coffee Polio Czech laundry detergent Sit & Smile Thai toilet paper BarfIranian laundry detergent Some Brand Names That Didn’t Work Figure 17-9

How Brand Equity Provides Value High Brand Loyalty Other Brand Assets More/Better Brand Associations High Perceived Quality High Brand Awareness Reduced marketing costs Increased trade leverage Patents or trademarks Strong channel relationships Creates positive image Helps customer process information Supports quality positioning Supports higher-price strategy Easier to make brand associations Increased liking and familiarity Provides value to customer: Assists in customer information processing Increases confidence in purchase Increases satisfaction in product use Provides value to firm: Increases effectiveness of marketing programs Increases customer loyalty and trade leverage Facilitates brand extensions Is a source of competitive advantage Figure 17-10

Building Brand Equity Getting awareness of the brand and the meaning. Making brand associations -- even the factory location in Saturn’s case. Building perceived quality Loyalty in repurchase -- locking them in Getting reseller support

A Brand Report Card Figure 17.11

Profitable Brand Strategies Figure 17.12