New Product Launch

How to Increase the Success Rate of NewHow to Increase the Success Rate of New Product Launches

This Presentation

• Introduction

• Where new product launch goes wrong

• How to deal with issues• How to deal with issues

• Toolkit

Launch planning• Launch planning

• Launch execution

Launch monitoring• Launch monitoring

• Conclusion

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Wh N P d t L h G WWhere New Product Launch Goes Wrong

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Delivering What Customers Want

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Trends since 1995 - PDMA 2004 Comparative Study

• Overall sales and profits from new products declined

• Incremental new products increased as a % versus more innovative new products

• Success rates had not changed since 1990

• Significant differences between ‘the Best’ (72%) and ‘the Rest’ (47%)

• Implies top performers are benefiting most from process and tool improvements in NPD

• Dramatic increases in (the application of) NPD processes

• Cycle times and process efficiencies had improved

• X functional development teams are the norm

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From NPD Best Practices Study: The PDMA’s 2004 CPAS, 2004

Why do it?

On average:On average:• New products account for about 32% of sales and 30% of profits• The ROI for successful new products is 96%

Median values:50% of successful new products achieve 33% ROI or better• 50% of successful new products achieve 33% ROI or better

• Half have a payback of 2 years or less• Half achieve over 35% market share

Greater pressures – globalisation, competition, technology, changing customer needscustomer needs………

And, by the way, new products are the future….

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From Robert Cooper, Product Leadership, 2005

What’s going wrong?

•PDMA concluded that the leading cause of product failure is ‘not understanding the customer’

•More detailed analysis* includes the following:

• Striving for superior products

• Being market driven and customer focused

• Doing the homework

• Quality of execution of key tasks from idea to launch

• Planning and resourcing the launch

• Only 38% of companies rank their launches as highly successful**

*Robert Cooper ‘New Products what separates the winners from the losers and what drives success’ PDMA Handbook of NPD 2nd edition 2005

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Robert Cooper, New Products – what separates the winners from the losers and what drives success , PDMA Handbook of NPD, 2nd edition, 2005** Business-to-Business Launch Survey Executive Summary, Schneider Associates, Center for Business Innovation at Babson College, 2007

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The Pitfalls

Pitf ll #1 Pitfall # 3:Pitfall #1: Customers are

averse to h

The PitfallsPitfall # 3: Going to

market before you are readychange you are ready

Pitfall #2: Expecting too much too soon

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How to Deal with the Issues

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Strategic and Practical Launch Challenges

Strategic Practical

•Precisely defining the market opportunity – size, market segments

•Getting alignment in the organisation

•Building the route to market - support

•Having a clear, compelling value proposition

throughout the channels to market

•Understanding the steps to getting l & b ildi h l d•Developing the entry strategy with

milestones and KPIs

sales & building the tools and programmes to get there

•Understanding the buying process and its influencers and influences

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Launch Strategy

Sales

Mainstream

Stage 3 Targets•Names or descriptions

Mainstream market•Names or descriptions

•Why will they buy?C t t t t

Stage 2 Targets•Names or descriptions•Why will they buy?

descriptions•Why will they buy?•Contact strategy•Channel strategy•How to leverage for mainstream market

•Contact strategy•Channel strategy•How to maintain momentum & loyalty

Initial targets•Names or descriptions

Why will they buy?•Contact strategy•Channel strategy•How to leverage for Stage 3

mainstream market

KPI 1

•Names or descriptions•Why will they buy?•Contact strategy•Channel strategy•How to leverage for Stage 2 Time

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Milestone 1

Buying Map

STEP 1

STEP 2

Influences/Influencers?••

Influences/Influencers?••

STEP 3

Influences/Influencers?•

STEP 4

•

Influences/Influencers?

STEP 5PURCHASE/ REPURCHASE

Influences/Influencers?••

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Go to Market Strategy and Launch Plan

•• WhatWhat (are you taking to market)? – the key attributes of the product or solution: features, business model, price or price position, market position

•• WhoWho (should be involved internally & externally)? - Target markets? Initial customers/entry strategy? Influencers? Channels/partners? Launch team?

•• WhyWhy (should they adopt it)? - the value proposition (s) and key messages for t h l d th di d i flcustomers, channels and other audiences and influencers

•• How and WhereHow and Where (should it be done)? – external activities, tools for customers, t l f i t l ditools for internal audiences

•• (What &) When (What &) When (key activities and milestones)? – timing, launch date (s), i t l d ti iti f t KPI / t ?internal processes and activities, forecasts, KPIs/measurements?

N.B.N.B. – use a product launch checklist/project plan but not as a substitute for a strateg

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strategy

Product Launch Checklist

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© Copyright 2001 Go-To-Market Strategies

Product Launch Toolkit

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The Three Phases of New Product Launch Growth Team MembershipTM Toolkit

Phase Description

Launch Planning

Determination of appropriate product positioning, volume forecasting distribution channels and budget allocationPlanning forecasting, distribution channels, and budget allocation

Introduction of product to market with awareness – andLaunch

Execution

Introduction of product to market with awareness – and demand – generating campaigns; sales force and (as

applicable) channel partner training

LaunchEvaluation of product, sales rep, and channel partner

performance; product feedback collection from customers Launch Monitoring

p ; pand sales teams

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Launch Planning: Key Steps and Tools

Step Purpose Sample Tools

Product Positioning

Analysis

Carve out and articulate your new products niche within the larger category

•Product Placement Worksheet

•Customer Segment Profiling Templatey

Volume P t ti

Forecast and plan for production requirements immediately following launch

•Demand forecasting Interview TemplateProtection

Analysis

immediately following launch Template

•Volume Projection Guidelines

Distribution Identify optimal distribution channels for taking •Distribution Planning Checklist

Analysis your product to market •Channel Partner Evaluation Scorecard

Budget Allocate resources to support the new products Marketing Budget PlanningBudget Analysis

Allocate resources to support the new products launch; set deadlines for taking the product to market

•Marketing Budget Planning Template

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Launch Execution: Key Steps and Tools

Step Purpose Sample ToolsStep Purpose Sample Tools

Awareness Campaign

Generate interest for your new product through targeted media outreach

•Press Release Template

•Agency Evaluation Scorecardp gDevelopment

Agency Evaluation Scorecard

Demand Generation

Build demand for your new product through marketing communications and promotions

•Media Mix Evaluation Template

•Channel Reach/ Clutter Matrix

Sales Preparation

Familiarise your sales teams and channel partners with your new product

•Channel Partner Engagement Guidelines

•Competitor Comparison Chart•Competitor Comparison Chart

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Launch Monitoring: Key Steps and Tools

Step Purpose Sample ToolsStep Purpose Sample Tools

Internal Evaluation

Assess sales and marketing performance and collect product feedback from the sales team

•Sales and Marketing Performance Dashboard

•Sales feedback Collection Template

External Evaluation

Build demand for your new product through marketing communications and promotions

•Market Response Assessment Worksheet

•Customer Feedback Collection Template

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In Conclusion

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Summary

Achieving success consistently with new products is a tough challenge but:

• There is a big difference between ‘the best’ and ‘the rest’

• The best make a lot of money from new product success

• Launching a product well is a critical part of success

• Many organisations stumble in product launch because they:

• Fail to understand how averse customers are to change - Pitfall #1

• Expect too much too soon - Pitfall #2

• Go to market before they are ready - Pitfall # 3

• A through product launch process and toolkit addressing launch planning, execution and monitoring can help you stack the odds in your favour

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