Examples of expensive product launches. Features of the program to promote a new product to the market. Chappi® - nutritious dog food
Most businessmen dream of creating a new product. They are passionate about the idea of selling a product or service that competitors do not have. And it should be a product for which buyers will line up. The idea is good, but not many people manage to find it, let alone implement it. How to launch a new product on a new market, which will leave no chance for competitors in the future?
Task complexity
Bringing a new product to market is not an easy and expensive task. In this regard, many entrepreneurs give up their positions at the very beginning of their journey. The difficulties ahead scare off newcomers. However, bringing a new product to a new market is a feasible task. By developing the right marketing strategy in the shortest possible time, you can ensure that the product or service takes a leading position. An entrepreneur only needs to be prepared for the fact that it is unlikely that a new product will start to make a profit at the initial stages.
Choosing the right strategy
Based on existing practice, it can be concluded that the introduction of a new product into a new market is associated with significant risks. This leads to the fact that the implementation of the idea is not always successful.
To minimize risks, you will need to apply the right marketing and use the necessary techniques to help attract consumer attention to a little-known product that has just appeared on the market. Only this will make it buyable and in demand. How to achieve the desired result? To do this, it is important for each manufacturer to use marketing tools that will make it possible to produce the product that the consumer needs, selling it when needed, where needed and at the price that would satisfy the buyer.
Currently, many different methods have been developed that contribute to the introduction of a new product to a new market. In this regard, entrepreneurs and businessmen will need, first of all, to study the existing arsenal of marketing tools and learn how to use them correctly to implement their idea. Of course, in any already tested methods of strategy and methods of promoting a product or service, each manufacturer must introduce its own nuances, which will be dictated by specific conditions. After all, classic techniques work as efficiently as possible only if they are adapted to a specific business.
Be that as it may, the introduction of a new product to the market, before it reaches the buyer, must go through certain stages. They start with concept development and end with commercialization. The strategy for bringing new products to market can be different. That is why we will consider a generalized idea of the steps to promote goods and services.
Idea development
Where does the creation of a new product begin? From generating or searching for ideas. They can come from company employees and academics, customers and competitors, dealers, and senior management.
Considers the most logical starting point of this stage to identify the needs and desires of consumers. After all, buyers who most professionally use the products already manufactured by the company are the first to notice everything that needs to be improved in it. The company can learn about the needs and needs of customers by organizing surveys, group discussions, projective tests, as well as considering complaints and suggestions from consumers. In the history of world business, there are many examples when good ideas are born from engineers and designers after surveys were conducted of consumers talking about their problems while using the product.
To create a new product, many companies use suggestions received from their employees. Moreover, the desire to create new ideas by employees, as a rule, is encouraged. For example, Toyota employees come up with about 2 million new ideas every year. Moreover, the company implements 85% of them. And Kodak rewards employees who submit the best ideas with gifts and cash bonuses. This practice is adopted in many other companies.
Good ideas sometimes come from studying the product of competitors, through contact with dealers and sales representatives of the manufacturer. There are other sources that allow a company to start building a new product. Sometimes they are inventors, commercial and university laboratories, trade publications, etc.
Selection of ideas
Any company collects received proposals. In the future, they are considered by the head of ideas. He divides proposals into three groups - promising, doubtful, and unpromising. Those ideas that belong to the first category are further tested on a large scale. When selecting proposals received, it is important not to make a mistake. After all, sometimes companies reject a good idea, starting work on a hopeless direction. One example of a new product launch is installment trading. At one time, Marshall Field had a premonition of the unique possibilities of such tactics. But Endicott Johnson did not like this proposal. He called installment trading a vile system that can only create trouble.
Product release decision
After selecting the most promising ideas, the company needs to consider the following aspects:
- expected profit from the sale;
- the ability of the company to take the idea into production;
- the probability of investing in a new project;
- an approximate estimate of the volume of consumer demand;
- formation of the price level;
- sales channels;
- the likelihood of obtaining a patent;
- assessment of available resources and the level of costs for the purchase of equipment (in the case of the production of a technically complex product).
Concept development
What is the future plan for bringing the new product to market? The most compelling ideas should then turn into product concepts that can be tested. What does she represent? The concept of a product is understood as an already developed version of a promising idea, which is expressed in a form that is meaningful to the consumer.
Consider this important of all stages of bringing a new product to the market using the example of a company operating in the food industry.
Let's assume that its management decides to launch a powder that, when added to milk, can increase its taste and nutritional value. This is just an idea for a product. Further, it must be turned into a concept, which may not be one. For example:
- Who will be the user of the product? In this case, it can be infants, children, adolescents or adults.
- What are the benefits of the product? Energy boost, refreshing effect, nutritional value or taste?
- When will consumers consume such a drink? During breakfast, lunch, dinner, dinner or late at night?
Only by giving answers to all these questions, it will be possible to start forming the concept of the product. So, the drink intended for production can be:
- Soluble. It will be for adults only. It is planned to be consumed as a quick nutritious breakfast.
- Children's. The product will have a pleasant taste, and its use is acceptable throughout the day.
- Strengthening health. Such a drink will be necessary for older people to drink in the evening.
At the next stage of bringing a new product to the market in marketing, a categorical one is selected from all these concepts. It will determine the area of product competition. For example, an instant drink will become an alternative to eggs and bacon, cereals, coffee, muffins, as well as other products included in the breakfast menu.
Brand creation
What is the future plan for bringing the new product to market? The product concept at the next stage should turn into a brand concept. A new drink needs to be significantly different from those already on the market. This applies to its average calorie content and price. A company should not position a new product with existing brands, otherwise it will be quite difficult to win its place in the sun.
proof of concept
What should be the future marketing strategy for bringing a new product to the market? At the next stage, the company needs to test the chosen concept. This can be done by testing the product with a specific audience of target consumers. This will allow you to find out their reaction.
A plan to bring a new product to market may involve presenting a product concept in some form. It can be either symbolic or material. At this important stage of launching a new product on the company's market, a graphic or verbal description of the product is sufficient. However, it should be borne in mind that the effectiveness of the test will be most reliable when there is a large similarity that can be seen between the tested concept and the finished product.
An example of bringing a new product to the market at this stage is designing it on a computer with the manufacture of a plastic model of each of the options. In this way, toys or small household appliances can be created. Such dummies will allow buyers to get an idea of the appearance of a new product.
One of the steps to launch a new product on the market is the creation of virtual reality. This is a computer simulation of the surrounding reality when using touch devices such as glasses or gloves. Such a program is often used to familiarize the consumer with the new interior of his kitchen, the furniture from which will be purchased from this company.
Development of a marketing strategy
How will the new product be brought to market in the future? In marketing, the next stage in the implementation of a promising idea involves the development of a preliminary strategy plan. It represents certain steps that a company has to go through to sell its product or service. In the future, some corrections and clarifications may be made to the strategy for bringing a new product to the market, depending on the current situation.
The developed plan should consist of three parts. The first of them contains information about the volume and structure of the target market, as well as the behavior of consumers on it. It also describes the positioning of the product, expected sales volumes, planned profits and market share. All these data are calculated for several years ahead.
The second part in the marketing strategy plan contains data on the pre-formed price of the product, on its further distribution, as well as on the level of sales costs during the first year of sales.
The third part of the marketing plan includes indicators of product implementation and profit in the future.
Possibilities of production and sales
At the next stage of product promotion, it is important to consider the business attractiveness of the offer. This can be done by analyzing the calculation of estimated sales and costs, as well as profits.
All of them must be consistent with the goals of the company. In the case of positive results of such a test, you can begin to develop the product itself.
Process of creation
At the initial stage, it is necessary to prepare production for the release of a new product. To do this, they develop technology, produce the necessary equipment and purchase additional tools and equipment. Next, the production of prototypes or a batch of newly created products is carried out. This completes the creation of a new product.
At this stage, you should prepare and carry out test sales. They represent the implementation of a small number of experimental products. Such a move will allow for an additional check of the market, clarifying the need of the population for the created product. When introducing prototypes of a product to the market, one should not hope to receive the planned profit. At this stage, it is important to check how customers feel about the product and, if necessary, adjust the methods of its further promotion.
Access to the market
At this stage of the launch of a new product, all departments are involved and all functions of the company are affected. These are production and sales, procurement and finance, personnel, etc. At the same time, operational marketing is connected to strategic marketing, which will require the participation of a tactical as well as a project manager.
As a rule, at this stage, the company's work is unprofitable, and if it makes a profit, then it is insignificant. It's all about the costs of promotion and further development of distribution channels, which are quite high. That is why at the initial stages of a product entering the market, it is necessary to offer consumers only those options that are basic, because customers are not yet ready to consider modifications to a new product.
In addition, when introducing a product to the market, manufacturers should focus on the target audience. In it, product expectations and requests are the most studied and predictable.
At this stage, an important role belongs to the distribution channels and further distribution of products or services. They should be given special attention. With a competent solution of this problem, a place in the market will be won in the shortest possible time and at minimal cost.
What will be the choice of implementation system? It depends on the characteristics and image of the firm and product, as well as the reputation of the company.
During development, two options can be considered:
- Direct distribution. In this case, the product from the manufacturer goes directly to the consumer. This scheme is most acceptable for the sale of high-tech goods, as well as for expensive and large transactions.
- Distribution with the participation of intermediary firms. Often, trading organizations have a large amount of resources necessary to bring the product to the end consumer. In addition, they provide the buyer with a choice of a wide variety of brands, which allows the client to significantly save time.
When forming a marketing strategy, a marketing plan for promoting the product should be drawn up. At the same time, it should be borne in mind that there is no universal tool that would allow introducing a new product to the market. For example, large firms in this case invest impressive amounts in advertising on radio, television and on the Internet. They place outdoor advertising, and also carry out the promotion of goods in the places of its sale.
Smaller companies are deprived of such an opportunity due to lack of funds. As a rule, they use word of mouth, contextual advertising, social networks, etc. In addition, marketers recommend doing everything possible so that a new product placed on store shelves compares favorably with offers from other companies, is attractive and bright .
If all the efforts invested in the promotion of the product did not bring the expected result, then experts recommend making changes to the promotion strategy. In this case, you will need to use other types of advertising and promotions.
At this stage of introducing a new product to the market, it is of particular importance to determine the size of the advertising budget, draw up a promotion program, and also search for the means of communication through which such work will be carried out.
The presentation of a new product to consumers should be bright and memorable. To do this, advertising should focus on the features of the product and its differences from existing analogues. At the first stages of bringing a new product to the market, it will be more rational to sell it via the Internet through participation in specialized exhibitions, etc.
As you can see, there are many factors that influence the success of a new product on the market. That is why at each stage of the project implementation, the company must approach the matter comprehensively. This will allow new products to gain a foothold in the market, winning the hearts of consumers and bringing a stable profit to the company.
The success of modern business organizations largely depends on the quality of strategic planning and management. The ability to timely and effectively plan and carry out the renewal of the assortment portfolio is the basis for the competitiveness of the enterprise and its products on the market. No company producing products for consumer markets will be successful for a long period of time without taking steps to develop and improve their products. This need is due both to the existence of the life cycle of each individual product, which must be monitored and adjusted as necessary and possible, and to the constantly changing needs of consumers of goods. In addition, various environmental factors can serve as a reason for changing the market activity and product policy of the enterprise.
New products may be different in nature and origin. The classification recognized in world practice is shown in Figure 1.
Figure 1. Classification of varieties of new products
Shorter terms (due to the unstable, too rapidly changing economic situation, and the weakness of the strategic planning of the activities of organizations);
Making decisions on the creation of a new product at the will and order of the management, and not based on the results of an assessment of the conditions and necessity;
Priority of the product over the consumer during development (mostly the target group is selected later, for the finished product);
Orientation to Western samples and their copying;
- "pseudo new" products (release of cheaper products by reducing the cost of production, reducing the number of ingredients or replacing them with cheaper analogues);
Accounting for the preservation of state regulation and socio-political interests in a number of sectors of the national economy, the operation of national programs for the development of the economy;
Mass import substitution of products on the market.
The strategy for developing and bringing to market a new product includes nine main stages, presented in Figure 2.
Figure 2. Stages of a new product development and launch strategy
First of all, the relevance of a new product and its success in the market depends on the correct choice of the search direction. Choosing a direction serves four main purposes:
1. Determines the area in which development should be carried out,
2. Helps to direct the search efforts of all company structures,
3. Concentrates the attention of developers on the assigned tasks,
4. The need to develop directions acceptable to all members of the leadership contributes to their advance thinking.
Idea generation is a systematically organized process of finding and generating ideas for new products. In 2014, experts from the scientific and socio-political journal of the Russian Academy of Sciences "SotsIS" conducted a survey of managers of research departments, during which the frequency of passing new ideas through further stages of development was found out. The survey results are shown in Figure 3.
Figure 3. Percentage of new ideas passing further development stages
Among the most common and used in companies, methods for generating ideas are: the method of listing features, forced combination, morphological analysis, determining the needs and problems of consumers, brainstorming (storming), synectics.
The idea selection stage is aimed at identifying suitable and rejecting unsuitable proposals. During the initial evaluation of proposed projects for new products, it is necessary to answer questions about the benefits that consumers and society can see in them, the benefits for the company, the compatibility of the project with the goals and strategy of the company, the complexity of its development, advertising and distribution.
The next stage in the development and testing of the concept of a new product involves the creation of a system of basic orienting ideas of the manufacturer about the product being created, its market opportunities and characteristics, and testing the impact of this concept on target consumer groups.
The development of a marketing strategy is based on the creation of a system of marketing activities through which the company intends to achieve the planned sales and profits. The structure of the strategy presentation is presented in Table 1.
Table 1 - The structure of the presentation of the marketing strategy for a new product
After the concept and marketing strategy of the product are formulated, more specific questions arise about the likelihood of matching the actual value of sales volumes, market share and profits from the sale of the novelty planned in the project. This probability can be estimated by economic or business analysis.
Business analysis is a more detailed evaluation of a new product idea in terms of the required investment, expected sales volumes, prices, costs, profit margins, and projected return on investment.
The economic analysis of an idea includes a forecast of costs associated with product development, market entry and sale, an assessment of competition and sales volume, a profitability analysis, and accounting for uncertainty and risks.
If a new product successfully passes the business analysis stage, it moves on to the prototyping stage, during which it turns into a real product. At this stage, it will be found out whether the concept of the product lends itself to being translated into a product that is cost-effective, both from a technological and commercial point of view, and whether the ideas embedded in it are feasible in practice. Finished prototypes are tested. Prototypes that have successfully passed the test for quality and reliability go to the trial marketing stage, where they are tested under conditions close to market ones.
As part of a strategy for developing and launching a new product, the test marketing stage is one of the most important components and should not be ignored. It is a transitional link, meaning the completion of development and preparation for the release of the product. Companies that do not pay enough attention to trial marketing or want to save time and money by neglecting it, as a result, lose disproportionately large amounts of money after bringing an untested product to the market in full, when changes can no longer be made or it costs huge efforts and costs. In addition to being able to assess consumer reaction to a new product and make the necessary adjustments, trial marketing allows you to select the most appropriate and effective marketing tools and distribution channels for use during the commercialization stage, having previously verified their effectiveness. When using trial marketing, consumer product companies typically choose one of three methods - standard, controlled, or simulated trial marketing.
In case of a positive decision based on the results of trial marketing, the project enters the commercialization phase. The commercialization stage means the development of mass production and the launch of a new product on the market, which require significant costs. When introducing a new product to the market, there must be clear decisions on the four issues presented in Figure 4.
Figure 4. The content of issues that need to be worked out when bringing a product to the market
By the end of the product development process, during which sales are zero and costs rise as the final stages of the process approach, the product enters a new stage of the life cycle - introduction to the market, usually accompanied by a gradual increase in sales. The beginning of the stage is the first appearance of new products on sale. Even if a new product is very successful, it takes time to conquer the market. Significant funds are needed to attract distributors and create stocks.
When introducing a new product to the market, a company may adopt one of several strategies. The enterprise can adjust the level for each of the variables - price, promotion, distribution and product quality. Recommended strategies for bringing new products to market are presented in Table 2.
| Strategy | Variable level | Meaning | Application conditions |
| Gradual extraction of maximum profit | The price is high, sales promotion costs are low. |
A high price helps to maximize the profit per unit, and low promotion costs reduce overall marketing costs. | The small size of the market and the awareness of buyers about the product, with their willingness to pay for it. A small number of competitors. |
| Accelerated extraction of maximum profit | High price level and sales promotion. | Allows you to expand the circle of knowledgeable consumers, contributing to the volume of sales. Income must cover the cost of incentives. | The market is small, the bulk of buyers have a poor understanding of the product and measures are needed to alert and convince them. |
| Accelerated market conquest | The price is low, the cost of promotion is high. | Provides the most rapid and complete conquest of the market and the capture of its highest share. | The market is large, buyers are price sensitive, unfamiliar with the product, competitors are dangerous. The lower the cost, the larger the scale of production and the richer the experience of the firm. |
| Gradual market conquest | Weak sales promotion, low price. | Systematic introduction of the product to the existing competitive market with low opportunities and low ambitions of the company. | Limited finances do not allow spending large amounts on withdrawal. |
| Average market penetration parameters | Average price level and average sales promotion. | The product is intended for the middle class, does not try to stand out, competes on the basis of quality, emphasis in advertising and positioning on high quality at an affordable price. | Mainly in the market of necessary goods, with a focus on buyers who are more responsive to quality rather than price, and are also quite knowledgeable, have some idea about the product. |
The company chooses a strategy for bringing the product to the market in accordance with the intended positioning of the product. Choosing a strategy for the launch phase of a product is the starting point of a plan for the entire life cycle of a product. The company focuses its sales on those buyers who are most ready to buy and holds events that allow them to try out a new product or interest consumers in it.
As world practice shows, a rather small part of new products is a commercial success. According to some experts, only 20% of innovations are successful in the market.
Reasons for new product failures are usually as follows:
Lack of a clear and adequate novelty concepts;
Solution of technical and technological problems by the product without meeting the basic needs of the consumer;
Poor coordination of efforts of employees and departments when launching a new product;
Expectation by the management of an instant financial effect from the novelty, unpreparedness for long-term investments and promotion;
Low quality of goods;
Wrong pricing policy;
Untimely launch of the product to the market;
Weak distribution and lack of marketing support for sales.
Factors that complicate the development of new products include:
Short life cycle of goods and technologies;
Existing state regulation of innovation processes;
Significant amount of necessary capital investments;
Relative similarity of basic technologies for enterprises of certain industries;
High costs for the development and implementation of products.
The key success factors for new products are:
The superiority of the product (the presence of unique properties that bring additional benefits to the buyer, contributing to a better perception and interest);
Marketing know-how (better understanding of the market, development focus on the market and the client);
Technological know-how.
In addition, success factors include: intensive initial analysis, precise formulation of the concept, development plan, control of all stages of bringing the product to the market, access to resources, the time factor, as well as a correct assessment of the degree of risk.
Thus, when forming a strategy for developing and launching a new product on the market, it is necessary to take into account all the factors of success discussed above and the causes of failures, as well as a thorough study of the stages of creating a product and choosing tactics for its introduction to the market, corresponding to its positioning and the established price level and sales promotion. The combination of these measures and a strategic approach to the processes of developing and bringing a new product to the market contribute to:
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Before getting to the buyer, a new product goes through a series of stages from concept development to commercialization. In different sources, you can see many approaches to the structure of creating and launching a new product on the market. The analysis of sources made it possible to formulate a generalized representation (Fig. 3):
Figure 3. Scheme of launching a new product on the market
commodity market risk product
Depending on the type of product, existing information about the market and the situation within the company, stages may be combined or excluded in the process of bringing the product to the consumer market. Consider the content of each stage.
1. Creating an idea for a new product.
The creation of a new product most often begins with the search or generation of ideas. There are a number of principles, the observance of which allows you to avoid mistakes:
- the company must ensure a constant influx of new ideas and proposals, give this process an organized and systematic character;
l ideas must be constantly commensurate with the capabilities of the company and the situation on the market;
- proposals should be sufficient to ensure the freedom to choose the most promising;
- focus on the potential needs of consumers in the future, and not on the needs of "today";
The company should have a communication system between departments and employees so that each responsible person has an idea about the areas of development that are most interesting for the company.
Ideas at this stage can be generated within the company (initiated by employees or by creating a special department responsible for new ideas), buying an idea from an outside organization, or hiring an employee to develop a concept.
Possible sources of ideas can be:
ь opinions of consumers and sales agents obtained by survey method;
l market research;
ü representatives of development, maintenance, company management or other departments that have contact with consumers (for example, the sales department);
l competitive analysis;
ь study of secondary sources of information (printed publications, mass media;
ь opinions of industry experts (professional communities and associations), exhibitions and expositions.
Involving third-party companies for development saves time, but increases the risk of information leakage to competing companies.
After a sufficient number of ideas have been generated that can be implemented within the organization, the stage of selecting the most attractive and profitable ones begins. Before deciding on a trial release of a product / service, the following aspects are considered:
ь expected profit from the product/service;
l the ability of the company to realize the idea and take it into production;
ь analysis of the financial position of the company, required investments for the project;
ь approximate assessment of the volume of the consumer market and the trend of its development;
ь a preliminary assessment of the price and the necessary distribution channels is given;
l evaluates the possibility of obtaining a patent for a product/service;
- if the product is technically complex - an assessment of the existing resources for production and the cost of the necessary equipment and materials is given.
2. Development of the concept of a new product, giving the idea of real characteristics. Most often, this stage is a test of the idea on the target group of consumers, tracking the reaction to the product. The less a new product differs from an existing one, the less costly and large-scale research is supposed to be. The result of this stage is the trial production of a product or the provision of a service, which allows you to evaluate the existing problems of production and use. According to the results of the opinions of consumers and experts, the requirements for product characteristics are adjusted. The reliability of this stage is determined by the degree of compliance of the tested product with the final one, which will go to the consumer.
If the product is technically complex, then in parallel with the study of consumer properties, at this stage, they study the features of the production process, and specialists proceed to apply for a patent. A quality control system for goods is being developed.
3. Development of a marketing strategy for a new product.
If management makes a positive decision to enter the market with a new offer, then actions are taken to develop a marketing strategy for a new product and assimilate company departments (marketing, sales, finance) to implement the strategy.
The main goal of the stage is to analyze the macro- and microenvironment of the market, the most promising and target consumer markets.
The development of a marketing strategy includes the following blocks:
l competitive analysis - identifying the strengths and weaknesses of competitors;
ь study of typical situations in which the consumer makes a decision to purchase (goods / services);
study of the needs and values of buyers;
ь analysis of economic indicators (market volumes, planning of sales volumes, planning of costs and profits, necessary investments and payback period, pricing);
ь formation of technical specifications / development of goods (issues of organization of production and management);
l trial marketing.
The choice of marketing strategy is largely determined by the characteristics of the product. Conventionally, the development of a marketing strategy can be divided into several blocks (Fig. 4):
Figure 4. - The main components of the marketing strategy of a new product
Most often, when developing a strategy, focus groups, in-depth interviews, quantitative surveys, retail audit, U + A studies, consumer panels are used.
The final stage of the stage is the launch of pilot production. Specialists finally formulate the so-called Marketing Mix of the product: the name of the product, the design of packaging and related materials (advertising materials, instructions, etc.), technical specifications for the departments involved in the implementation of the product are developed.
The concept of a new product is launched into trial production (the number of offers is limited and directed exclusively to the target group of consumers). This stage allows you to conduct comprehensive consumer research, assess the level and structure of costs required for serial production, and set a price.
This plan is the basis for the decision to bring a new product to the market by the company.
4. Bringing goods to market. This stage affects all functions and departments of the company: marketing, sales, production, personnel, purchasing, finance, etc. Along with strategic marketing, operational marketing begins to function. The participation of tactical and project management is required.
In most cases, at this stage, companies incur losses or have insignificant profits, since the costs of promotion and development of distribution channels are very high. At the initial stages, it is advisable to release only the main variants of the product, since the market is not yet ready to accept product modifications.
The main attention of the manufacturer is directed to the target audience, as its requests and expectations from the product are the most studied and predictable.
A significant role at this stage should be given to the choice of channels for the sale and distribution of goods. A competent solution to this problem contributes to a less expensive and faster gaining a place in the market. The choice of distribution system depends on the characteristics and features of the product, the image of the product and the company, the reputation of the company.
There are two marketing strategies available:
- direct distribution - from the manufacturer, the product goes directly to the consumer. This distribution system is most adequate for the sale of high-tech solutions (requiring warranty and service maintenance), or for large, expensive transactions;
- distribution through intermediary firms. Often, intermediary organizations have more resources to bring the product to the consumer and they do it with greater efficiency than the manufacturer himself. This is largely due to the fact that having a large number of supplier companies, intermediaries can provide the buyer with a choice of brands, which significantly saves their time.
The main elements of a marketing strategy can be (Fig. 5):
Figure 5. - Classification of distribution channels
Promotion of a new product to the market is not easy and costly, and along the way, many entrepreneurs “lose ground”, difficulties scare away newcomers. In fact, to bring a new product to the market and in the shortest possible time to ensure that it occupies a leading position is a completely feasible task. But this requires a properly developed strategy and the use of effective methods of promoting goods to the market. We will talk about this in our article.
Promotion of a new product to the market: how to “occupy” the right niche?
The process of launching any new product, product or service on the market is complex, multi-tasking, and requires the investment of a significant amount of money, effort and time. This also applies to successful companies, large corporations and small firms that create something unique and want to make it known to many.
Promotion of a new product to the market – the task is responsible and complex, and even the slightest mistake can cost the company significant losses. Many "arrogant" entrepreneurs prefer to act independently, at random, without looking at the experience of other companies, without calculating everything in advance, without having information about the market situation, the competitive environment, the possible demand for a new product, without adhering to any promotion strategy. Experts are sure that in this case it is wrong to do so and rely only on your intuition. It requires an integrated approach, expert advice and the use of effective techniques. Only work “in a complex” will help the correct introduction of a new product to the market and the achievement of the set economic results.
Today, most entrepreneurs who are puzzled by the promotion of new products on the market, while having a different ready-made base. The first category of entrepreneurs felt the need to expand the range, create a new product and bring it to the market, and now they are faced with the task of creating a new promising product that can interest consumers and take its rightful place in the market and become competitive.
Businessmen who do not have experience in “promotion” of goods often use the services of marketers who conduct a comprehensive analysis – market monitoring, including competitiveness research, assess the degree of compliance of the product with market expectations, the benefits of new products – and, based on the results of such an analysis, they give a correct assessment of the future success of the proposed novelty, and can correct the strategy for its promotion. It is not uncommon for cases when, based on the results of a comprehensive analysis of the prospects of a new product, it turns out that bringing it to the market will simply be unpromising, and even unprofitable for business.
In cases where businessmen have just conceived the creation of a new product, experienced marketers study offers, demand for similar products, present entrepreneurs with requirements for what a new product should be, develop options and concepts for what a product should be in order to satisfy all requirements as much as possible. consumers.
Does this mean that the promotion of a new product to the market is possible only with the help of professionals, specialists from marketing agencies and significant investments in strategy development? Of course, this will be the so-called “path of least resistance”, but for entrepreneurs who decide to launch a new product on the market on their own, there are “unified” promotion tools that can be used in their work.
New product on the market: implementation stages
The process of launching new products on the market scares away the “newcomers” of the business, since not every young company is ready for global competition. In cases where the product or product that is planned to be launched on the market is “doomed to success”, is truly original and will resonate in the hearts of buyers, marketers advise entrepreneurs not to be afraid to take risks and try to adhere to a clear strategy within several main stages. promoting a new product to the market.
1. Market research
The first and really important task that needs to be given special attention when promoting a new product to the market is – this is a study of the market and the "mood" of the target audience, for the sale of which the new product is designed. An entrepreneur must identify the most promising market sectors for selling his new product, determine the circle of consumers who will buy such a product in the future. The best "niche" for a new product is "scarce" goods that cannot be bought in your city.
For example, there are bicycle shops in the city, but they are all of poor quality, many cyclists are ready to come and give their money for bicycles of famous brands, but they simply do not exist, and then people have to order bicycles on the Internet, overpay, go shopping in other regions. That is, this niche – is not yet occupied by anyone, and bringing to the market a new product, in our case, bicycles of a well-known company, which has no analogues in our city or country, such products automatically become in demand, as they satisfy the needs of consumers.
Experienced marketers advise businessmen who are engaged in market and target audience research to monitor “foreign” trends in this regard. That is, all new products that have successfully “entered” the foreign market in most cases will “take root” in our country, and the “cream” will be removed by the one who manages to introduce a new product to the market faster than others.
2. Product positioning
An important stage in the promotion of a new product on the market is the positioning of the product, the development of its concept. To do this, it is necessary to analyze the novelty, characterize its strengths and weaknesses, determine its future value, and assess how the novelty will “meet” consumer expectations. How not to make a mistake at this stage? First, the right decision is to determine the basic qualities of the product that the consumer will “appreciate” first of all. For example, when introducing a new product to the market – unique cosmetics made from honey, when creating the concept of product positioning, the emphasis should be on the naturalness of all components of such cosmetics, the safety of these products, or on the unique technology used.
All these "basic characteristics" of the new product will help it differ from competitors, attract consumers. On the basis of these data, the emphasis will subsequently be placed on compiling unique sales offers, conducting an advertising campaign, etc.
3. We take a place among competitors
Before promoting a new product to the market, this market must be comprehensively studied, and, first of all, this applies to competing firms. It is necessary to find out which companies are represented in the market of this type of goods, what direct and indirect competitors the company has, to find out how they position themselves, what development strategy they follow. If the products of competing firms similar to our novelty have a higher cost, then the firm should build its positioning in relation to competitors, focusing on low prices. If the prices for a new product are higher than those of competitors, then the consumer needs to explain in an accessible way what he “overpays” for.
Note
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You need to position your new product correctly relative to competitors. For example, when launching new highly carbonated drinks with fruit juice, three indirect competitors of this type of product will be: carbonated drinks, juices, waters. Think about how your product is better than those of competitors and focus on this.
4. Making a sales forecast
No strategic action plan for bringing a new product to market is complete without a sales forecast – this is a certain value that the company can achieve if certain conditions are met and the main tasks are implemented. Of course, it is not easy to obtain accurate and “one hundred percent” data here, but without this data it is impossible to predict how successful the sales of a new product will be, in what estimated time all the funds invested in the project will pay off. The sales forecast is made, among other things, on the basis of survey data of the target audience, on data from research on sales of similar products in the past, on the basis of market trends, seasonality, macroeconomic trends, the amount of investment in advertising, marketing, etc. It is the preparation of a sales forecast that will help a businessman plan events in order to achieve the desired performance.
5. Drawing up a marketing promotion plan
According to marketers, there is no “universal” tool for promoting a new product to the market. For example, large firms, introducing new products to the market, do not spare any funds for “promotion”, investing significant amounts in advertising on television, radio, on the Internet, outdoor advertising and “promotion” of goods at points of sale. Smaller firms choose other ways of "promotion". For example, word of mouth, promotion through social networks, contextual advertising, etc. When planning to sell a product at retail, an entrepreneur must think in advance about the options for its delivery or work through distributors, etc.
But the most effective way to "promote" a new product, experienced businessmen consider advertising a product at the point of sale. This allows you to draw attention to it. Try to make sure that on the shelves of the store the product is noticeable, attractive, compares favorably with the products of other companies. If, after all the funds invested in marketing and promotion, the expected result cannot be achieved, experts advise making changes to the strategy for its promotion to the market, using new ways for advertising, and thinking over the concepts of other promotions.
You will need
- - media services;
- - information about competitors;
- - improvement of a new product;
- - Knowledge of the basics of PR.
Instruction
Define your "enemy". It could be a competing company or a product category that is hindering the success of your new brand. For example, if you are selling Pepsi, then your enemy is Coca-Cola, etc. Once you have established the enemy, you can begin to develop a targeted strategy, the opposite of the "enemy" one. When Procter & Gamble introduced a new mouthwash to the market, they identified Listerine as their enemy. And since she produced a similar product with unpleasant taste, then Procter & Gamble product like exactly the same, but with a pleasant taste. And thanks to this, she has achieved incredible success.
Create an "information leak" about the new product e. The media loves behind the scenes stories about events that will only ever happen. Especially valuable if it is exclusive. This is the way Microsoft brought to market game console "Xbox". 18 months before official launch product and the dissemination of information began. Hundreds of articles have been created about the "Xbox" and the upcoming tough fight with the market leader - "PlayStation" from Sony. This move was a huge success.
Tip 2: How to form a grocery store assortment
The efficiency and profitability of almost any trading business largely depends on a well-composed assortment. Today's range of food products on the market is quite extensive. Therefore, it is problematic for management to decide which positions should be presented in their grocery store.
The development stage of the range should be preceded by marketing research. Their task should be to identify competitors and analyze their assortment. Next, you need to analyze potential consumers and determine their preferences. It should be noted that consumer behavior must be constantly analyzed and, based on changes in it, adjustments should be made in the assortment.
Range width and depth
Before proceeding with the formation of an assortment for, it is necessary to determine its key parameters. The product range is characterized by such characteristics as width, depth and height.
The first thing to do when developing an assortment is to decide on its width. It represents the number of assortment groups in the total volume. Features of the allocation of product groups will depend on the format of the outlet and its specifics. It is clear that the width of the assortment in a hypermarket and a small convenience store is significantly different.
For example, in most small format convenience stores, product groups such as dairy, bakery products, confectionery, tea and coffee, convenience foods and frozen foods, cheeses and alcoholic beverages, vegetables and fruits are distinguished. And if the store is highly specialized, then the product groups will differ. For example, in a butcher's shop, you can select such subsections as raw meat, semi-finished products, prepared food, sausages, canned food, etc.
The width of the assortment should be determined on the basis of an analysis of the assortment of competitors. You need to strive to find your own niche and offer a unique product, because. it will be quite problematic to compete with large hypermarkets and supermarkets in terms of price parameters. So you can focus on the sale of healthy food, organic products or delicacies in the assortment.
After you decide on the width of the assortment, you need to start filling each product group with goods. The number of products in each product group is called depth. It is believed that it is optimal to include products in the assortment that will be focused on various customer segments and include economy class products, goods from the mid-price category and from the premium segment. The predominance of certain products will depend on the store positioning strategy and its location. The cost of goods in product groups will determine the height of the assortment.
Characteristics of an effective assortment
Important parameters characterizing the effectiveness of the assortment is its mobility and relevance. They reflect the ability of the assortment to change to best suit the needs of customers and the demand for key assortment positions. For example, in recent years there has been a growing popularity among buyers for a healthy diet, so stores are expanding the range of fermented milk products, vegetables and fruits.
On the other hand, the assortment of a grocery store should be stable, i.e. it must always present goods that are in demand.
Based on ideas about the optimal depth and width of the store, an assortment is created. It includes the necessary list of goods sold, which satisfies the needs of buyers. The minimum list of products sold is the assortment minimum, which must always be present in the store.
In order for the store to make a profit, the assortment must be formed in accordance with the well-known ABC rule. According to him, product group A is the most popular and sought-after products. They account for 20% of the product range, but they bring up to 80% of the profit. They must be guaranteed to be present in the store in the right amount. Products from groups B and C are needed in the assortment, first of all, to maintain the optimal width.