Launching a new product in a distribution company
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The document outlines the various categories of new products, reasons for their failure, and the importance of market research in identifying opportunities and analyzing market segments. It discusses types of market research by source, methodology, and objectives, as well as the processes involved in conducting effective research. Furthermore, it provides insights into marketing strategy, pricing considerations, and sales boosting tactics within the product life cycle.
Launching a new product in a distribution company
- 2. What are new products? New to the world: Innovative products → create a new market New to the company (new product line): Allows the company to enter an existing market for the first time Flankers: Company makes additions to existing product lines/brands Line extensions Brand extensions Repositioning: Existing products targeted to a new market Product Improvements: Quality, feature, service enhancements toward greater value, different flavor, change in packaging
- 3. Why new products fail? (in a distribution company) Overestimation of market size Poor use of research Poor planning and strategy Incorrectly positioned, priced, or advertised Poor execution Poor timing Bad support from channel Product problem (Design, Quality,…) Competition might be too fierce Go to the main menu
- 4. Why We use Marketing Research? Identify & Evaluate Opportunities Analyze Market Segments Select Target Markets Plan & Implement Marketing Mixes Analyze Marketing Performance Identify trends that affect sales and profitability Keeping up with competitors' market strategies
- 5. Types of Market Research: By Source: Primary Secondary By Methodology: Qualitative Quantitative By Objectives: Exploratory Descriptive Causal (experimental)
- 6. Primary Collection of data specifically for the problem or project in hand Secondary Based on data previously collected for purposes other than the research in hand (e.g. published articles, government stats, ...) Market Research by source:
- 7. Market Research by methodology: By Methodology: Qualitative Quantitative Type of Question Probing Simple Sample Size Small Large Information per respondent High Low(ish) Questioner’s skill High Low(ish) Analyst’s skill High Low Expenses Low High Areas probed Attitudes Choices Areas probed Feelings Frequency Areas probed Motivations Demographics Ability to replicate Low High
- 8. Market Research by objective: Exploratory Preliminary data needed to develop an idea further. E.g. outline concepts, gather insights, formulate hypotheses Descriptive Describe an element of an ideas precisely. E.g. who is the target market, how large is it, how will it develop Causal Test a cause and effect relationship, e.g. price elasticity. Done through experiment
- 9. 1. Defining the problem and objectives 2. Developing the research plan 3. Collecting the information 4. Analysing the information 5. Presenting the findings The Market Research Process: Distinguish between the research type needed e.g. exploratory descriptive causal Decide on budget data sources Research approaches instruments sampling plan contact methods Information is collected according to the plan (it is often done by external firms) Statistical manipulation of the data collected or subjective analysis of focus groups Overall conclusions to be presented rather than overwhelming statistical methodologies Go to the main menu
- 10. Business review: Category: Factors impacting trends in related categories. Consumer: Define segments and key insights for each segment, through tracking data and research Channels: Look at each channel’s performance, major customers and tools for winning used in each channel Competitors: dissect competitors looking at positioning, pipeline, pricing, distribution differences, consumer perception, strategies. Brand: look at internal and external health and wealth of brand. Use financial analysis and market research perceptions.
- 12. Positioning: Who: Target market criteria (demographic, geographic, psychographic, benefit segmentation) What: What are we selling? (main Benefit) What do want people to think, feel or do? Why: Why should they believe us? (Support points) How: How we want to tell them? How we reach them?
- 13. Selecting Target Customers considerations: Segment size Revenue and margin opportunity Customer benefits Customer interest Customer willingness-to-pay Competition/market coverage Sales channel and associated profit margin Cost to serve Customer loyalty/lock-in
- 14. Pricing considerations: Value/benefit delivered Customer’s ability to pay Competitive alternatives/pricing Product “image” created Initial sales ramp Profitability (short- and long-run)
- 15. Selecting channels considerations: The Nature of the Product: Perishability Size and weight of product Unit value of a product The Nature of the market: Number of prospective buyers Size of the order Geographic concentration of market The Nature of the company: Cost of distribution of goods Our facilities Product margin The nature and size of the manufacturing unit: Manufacturer Reputation and Financial Stability Marketing Strategy Go to the main menu
- 16. Pre-launch Activities: Training of sales/marketing staff Building service capability Pre-announcements/market signalling Pre-stocking Product listings, price lists etc. Market access Legal, regulatory, purchasers
- 17. Time (months/years) Volumeofsales(howmanyaresold) New product is launched Product matures – sales are steady Plateau Sales grow Sales decline Development Saturation 0 Product life cycle:
- 18. Pre- launch Introduction Growth Maturity Decline Sales Pre-launch Announcement Beachhead Early Growth The Launch Cycle Sales & Expenditures SalesExpenditures The Launch Cycle:
- 19. Sales boosting strategies: To boost sales and prevent a decline in a product life cycle, we could implement marketing strategies such as: Advertising, e.g. television, billboard, online Price reduction Sales promotion Adding value or new features Exploring new markets, e.g. international markets
- 20. Time (months/years) Volumeofsales(howmanyaresold) New product is launched Sales grow Development 0 Sales boosting or extension strategies are implemented Product life cycle – sales boosting strategies:
- 21. I’m a self-motivated and goal oriented professional, with more than 10 years of comprehensive experience in sales and marketing with successful track record. My in-depth understanding of business concepts enabled me to work in challenging, dynamic and fast pace environments. Professional Skills: Solid knowledge of sales and marketing specially in CPG field Extensive experience in Distribution Channels Experienced in Supply Chain Management Extensive ability for sales and marketing data analysis Solid knowledge of Merchandising Management Trade and Consumer Marketing Solid experience in Market Research Proficient software user: Microsoft Office, CRM, ERP Go to the main menu