New Products Management
Launch Management Concept Figure 21-1
Showing Remedial Action
% aware who As of now Goal
Plan Without action
Launch Now 6 months
Launch Management System
• Select those to control.
– Consider expected impact/damage.
• Develop contingency plans for the management of
• 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
• 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?
Tried Not R.
Unaware Does the problem lie in awareness,
trial, or repeat?
Problems at Launch: Philips
• 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
Select the Control Events
Of 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
Develop Contingency Plans
• "Is there anything we can do?"
– E.g.: competitive price cut or product
• Base contingency plan on type of problem:
– 1. A company failure (e.g., inadequate
– 2. A consumer failure (e.g., low awareness or
Designing the Tracking System
• Select the tracking variables
– Relevant, measurable, predictable
• Select the trigger points
• Consider the nontrackable problems
Questions from New Product Figure 21-6
Category Usage Questions
In the past six months, how many times have you bought (product
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)?
Questions from New Product Figure 21-6
Tracking Study (continued)
Have you ever bought (brand)?
If "Yes": If "No":
How many times have you bought it? Did you look for (brand) in the store?
How likely are you to buy (brand) again? Why didn't you try (brand)?
What did you like/dislike about (brand)? How likely are you to try (brand) in the
What do you think of the price of (brand)?
A Sample Launch Management
Salespeople fail to contact general-purpose market at
Track weekly sales call reports (plan is for at least 10
general-purpose calls per week per rep).
If activity falls below this level for three weeks running, a
remedial program of one-day district sales meetings will be
Another Problem Illustrated
Potential customers are not making trial purchases of the
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.
Special follow-up phone sales calls to all prospects by reps,
offering a 50% discount on all first-time purchases.
Reasons for Product Figure 21-8
Technology advances lead to product 386 chip replaced by 486; 486 chip by
New generation product cannibalizes Windows 3.1 replaced by Windows 95;
demand for current product. Windows 95 by Windows 98
Users prefer or demand alternative Slide rule; 8-track tape player
Profit margins shrink due to greater New car sales
competition or operational cost increases.
Product category does not fit the firm's Sears spun off Allstate; Coca-Cola spun off
strategic focus. Columbia Pictures
Product category does not fit other Kraft Foods sold Entenmann's Bakeries;
company product categories or groups. General Mills sold Olive Garden
Key components are no longer available Raw paper and lumber supplies
Product is too difficult to support, due to AT&T withdrew from PC business
unique or complex technologies involved.
Increased global competition. Airlines; microwaves; televisions
Product presents a toxic or hazardous Ford Pinto; breast implants
Funds are reallocated to other new product New Coke; consolidation of new car
opportunities. models by Jaguar Motor Cars