Product Launch

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Chapter Sixteen; Strategic Launch Planning
The firm should think of product commercialization in two sets of decisions: 1. Strategic Launch Decisions
a. Strategic platform decisions (overall tones and directions) b. Strategic action decisions (define to whom we are going to sell and how) 2. Tactical Launch Decisions
a. Marketing mix decisions such as communication, promotion, distribution, pricing, etc. b. Strategic givens (already established; difficult or costly to change at this point) For examples check page 374

Strategic Platform Decisions
Different levels of product newness require different kinds of impact the launch activities must have on demand: • New to the world: entry strategy with the emphasis on stimulating primary demand • Product improvement or upgrade to existing product: Entry strategy with the emphasis on customer migration (to newer product). Stimulating replacement demand • New entry or line addition in established market: Emphasis on stimulation on selective demand Several other platform decisions:

Permanence: Three options:
1. In to stay
2. In to stay if we meet our goals
3. Temporary (think of things like a tamagochi, merchandise related to movies) Aggressiveness: Refers to attitude as much as dollars, three options: 1. Aggressive entry
2. Cautious entry
3. Balanced
Competitive Advantage: Why should customer buy your products? 1. Price
2. Differentiation
3. Both

Product Line Replacement: Most new products relate to existing products in the company’s product line, how should we manage the replacement strategy? 1. Butt-on product replacement
Existing product is dropped on launch of new product. (like a new version of car.) 2. Low season switch
Like Butt-on, but the switch at a low point between seasons. (like tour operators) 3. High season switch
Like butt-on, but the switch is at the top of the season (like camera’s) 4. Roll-in, roll-out
Like butt-on but arranged by a sequence of market segments (Mercedes C-series launched at different times in different countries) 5. Downgrading
Keeping the older product, but with less support (like Pentium 386 chip alongside the 486 chip until Pentium was launched) 6. Splitting channels
Putting the old or new product in a different channel, like old electronics in the discount section. Technologically stronger firms can cannibalize their own products with newer, higher-performance versions (like razors from Gilette)

Competitive relationship:
1. Make no reference to specific competitors
2. Aim directly at specific competitor
3. Avoid a specific competitor

Scope of market entry: market testing, roll in and then roll out, several (roll out) techniques: 1. Roll out very rapidly (barely holding up long enough to find crisis problems) 2. Roll out deliberately, as performance warrants.

3. Go to the total market at the beginning (most firms, no roll out)

Image:
1. An entirely new image
2. A major change in an existing image
3. A tweaking of an existing image
4. No change whatsoever in an image
The target market decision

Categories of segmenting a market:
1. End-use
2. Geographic and Demographic
3. Behavioral and Psychographic
• SRI Consulting follows trends in these variables, as well as in key demographics using its well-know VALS (Values, Activities and Lifestyles) questionnaire. 4. Benefit Segmentation
• May be clear from the original concept generation • The firm’s method of operation may constrain the choice • A focus may come from concept testing or product use testing Many firms use parallel development keeping two or three target alternatives in development.

Micromarketing and mass customization
Small targets (neighborhoods or industrial subsets) with unique purchase patterns: Micromarkets.

Database marketing: allows...
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