New Products Management

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					New Products Management

         Chapter 21
     Launch Management
      Launch Management Concept                                                 Figure 21-1

       Showing Remedial Action
% aware who                   As of now                                  Goal
have tried

                                          With action

              Plan                                      Without action

  Launch                      Now                                    6 months

       Launch Management System
 Thepotential problems.
• Spot
• 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).
                                                  Figure 21-2

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
           DCC Machine
• 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

                  Tracking Study
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)
Purchase Questions
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)?
                                                            Figure 21-7

  A Sample Launch Management
Potential Problem
  Salespeople fail to contact general-purpose market at
  prescribed rate.
  Track weekly sales call reports (plan is for at least 10
  general-purpose calls per week per rep).
Contingency Plan
  If activity falls below this level for three weeks running, a
  remedial program of one-day district sales meetings will be
                                                            Figure 21-7

        Another Problem Illustrated
Potential Problem
  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.
Contingency Plan
  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

 Reason                                        Examples
 Technology advances lead to product           386 chip replaced by 486; 486 chip by
 obsolescence.                                 Pentium
 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
 through suppliers.
 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

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