What are the top two things that you remember when a new product is launched? The advertising and the product's presence in the stores certainly leave a mark in your memory. To give my own example of how I registered the presence of Cadbury’s Dairy Milk Silk Bubbly, it was when I first saw the campaign on television and, later, when I visited a store nearby, where this product was displayed on the shelves.
This period — from when the organisation decides to create awareness about the product to making it available to the consumer for sale — is called the “market launch”.
What’s so significant about it?
According to research, it is the most expensive step in new product development activities in certain industries.
While in technology or manufacturing industries, most costs go towards product development or R and D, in consumer goods, about 46 per cent of the total spend goes towards this final step of market launch. This is why it needs to be treated with a lot of care.
Costs apart, this is also the step that signals the end of new product activity internally, for the organisation. This means that the people deployed for development will be released for other projects in the pipeline.
It also the time when the success parameters of the new product get defined. There could be many ways of doing this, such as sales volume or value; customer acceptance and retailer comment. The last one is particularly important in the food industry, where the retailer gives spontaneous feedback on which products have repeat demand and which ones don’t.
Celebrity touch
Different companies adopt different strategies to ensure the product launch is remembered by many — celebrities starring in such launches is quite common these days — Shahrukh Khan for TAG Heuer; Chess champion Viswanathan Anand for Memory Plus and other such examples. This is done to heighten the recall value of the launch event in the consumers’ minds.
In entrepreneurial companies, the owner himself makes it a point to attend all new product launch events personally: this builds motivation for the entire team that has worked on the launch for several months.
Role of various departments
The first and foremost is their presence in the event. We all know how famous the PR briefings of Apple are. In many cases, media is invited to the launch. And this is why it is important to have different departmental heads answer questions about the new product. Research and Development needs to be able to field questions on formulation, costs and other related queries; marketing needs to be able to answer questions on competition; finance on pricing and profitability, and so on.
The sales department probably has the most important role during a market launch. This includes target planning, outlet distribution for the new product, arranging for funds from channels, organising trade meets and other related activities. Since the sales team faces the external world of trade and distributors on a daily basis, the success or failure of a new product affects them the most. Hence, most good organisations have incentives worked out for them to carry out the launch diligently.
A job well begun is half-done, goes the old adage. In the new product development context, this can be modified as “a job well-completed is half done”.