How to Increase the Success Rate of New Product Launches


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A presentation on how to increase the success rate of new product launches, from our GIL University team in the UK.

Published in: Business, Education

How to Increase the Success Rate of New Product Launches

  1. 1. New Product LaunchHow to Increase the Success Rate of New Product Launches
  2. 2. This Presentation• Introduction• Where new product launch goes wrong• How to deal with issues • Toolkit • Launch planning • Launch execution • Launch monitoring• Conclusion 2
  3. 3. Where New Product Launch Goes WrongWh N P d tL hG W 3
  4. 4. Delivering What Customers Want 4
  5. 5. 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 inNPD• Dramatic increases in (the application of) NPD processes• Cycle times and process efficiencies had improved• X functional development teams are the norm From NPD Best Practices Study: The PDMA’s 2004 CPAS, 2004 5
  6. 6. Why do it?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 • Half have a payback of 2 years or less • Half achieve over 35% market shareGreater pressures – globalisation, competition, technology, changingcustomer needs needs……… And, by the way, new products are the future…. From Robert Cooper, Product Leadership, 2005 6
  7. 7. What’s going wrong?•PDMA concluded that the leading cause of product failure is ‘notunderstanding 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 Robert Cooper, New success NPD edition, ** Business-to-Business Launch Survey Executive Summary, Schneider Associates, Center for Business Innovation at Babson College, 2007 7
  8. 8. 8
  9. 9. The Pitfalls Pitfall #1: Pitf ll #1 Pitfall # 3: Customers are The Pitfalls Going to averse to market before change h you are ready Pitfall #2: Expecting too much too soon 9
  10. 10. How to Deal with the Issues 10
  11. 11. Strategic and Practical Launch Challenges Strategic Practical •Preciselydefining the market •Getting alignment in the organisation opportunity – size, market segments •Building the route to market - support •Having a clear, compelling value throughout the channels to market proposition •Understanding the steps to getting •Developing the entry strategy with sales & b ildi the tools and l building h l d milestones and KPIs programmes to get there •Understanding the buying process and its influencers and influences 11
  12. 12. Launch Strategy Sales Mainstream market •Names or Stage 3 Targets descriptions •Names or •Why will they buy? descriptions •Contact strategy C t t t t •Why will they buy? •Channel strategy •Contact strategy •How to maintain Stage 2 Targets •Channel strategy momentum & loyalty •Names or descriptions •How to leverage for •Why will they buy? Why mainstream market •Contact strategy •Channel strategyPI 1 •How to leverage for Initial targets Stage 3 •Names or descriptions •Why will they buy? •Contact strategy •Channel strategy •How to leverage for Stage 2 Time Milestone 1 12
  13. 13. Buying MapSTEP 1 Influences/Influencers? • • STEP 2 Influences/Influencers? • • STEP 3 Influences/Influencers? • • STEP 4 Influences/Influencers? • • STEP 5 PURCHASE/ REPURCHASE 13
  14. 14. Go to Market Strategy and Launch Plan• What (are you taking to market)? – the key attributes of the product or solution: features, business model, price or price position, market position• Who (should be involved internally & externally)? - Target markets? Initial customers/entry strategy? Influencers? Channels/partners? Launch team?• Why (should they adopt it)? - the value proposition (s) and key messages for customers, channels and other audiences and i fl t h l d th di d influencers• How and Where (should it be done)? – external activities, tools for customers, tools f i t t l for internal audiences l di• (What &) When (key activities and milestones)? – timing, launch date (s), internal processes and activities, f i t l d ti iti forecasts, KPI / t KPIs/measurements? t ?N.B. – use a product launch checklist/project plan but not as a substitute for a strategy strateg 14
  15. 15. Product Launch Checklist © Copyright 2001 Go-To-Market Strategies 15
  16. 16. Product Launch Toolkit 16
  17. 17. The Three Phases of New Product Launch Growth Team MembershipTM Toolkit Phase Description Launch Determination of appropriate product positioning, volume Planning forecasting, forecasting distribution channels and budget allocation channels, Introduction of product to market with awareness – and Launch demand – generating campaigns; sales force and (as Execution applicable) channel partner training Evaluation of product, sales rep, and channel partner Launch performance; p p ; product feedback collection from customers Monitoring and sales teams 17
  18. 18. Launch Planning: Key Steps and Tools Step Purpose Sample Tools Product Carve out and articulate your new products •Product Placement Worksheet Positioning niche within the larger category •Customer Segment Profiling Analysis y Template Volume Forecast and plan for production requirements •Demand forecasting Interview Protection P t ti immediately following launch Template Analysis •Volume Projection GuidelinesDistribution 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 Planning Analysis launch; set deadlines for taking the product to Template market 18
  19. 19. Launch Execution: Key Steps and Tools Step Purpose Sample Tools Awareness Generate interest for your new product through •Press Release Template Campaign p g targeted media outreach •Agency Evaluation ScorecardDevelopment Demand Build demand for your new product through •Media Mix Evaluation Template Generation marketing communications and promotions •Channel Reach/ Clutter Matrix Sales Familiarise your sales teams and channel •Channel Partner Engagement Preparation partners with your new product Guidelines •Competitor Comparison Chart 19
  20. 20. Launch Monitoring: Key Steps and Tools Step Purpose Sample Tools Internal Assess sales and marketing performance and •Sales and Marketing Evaluation collect product feedback from the sales team Performance Dashboard •Sales feedback Collection Template External Build demand for your new product through •Market Response Assessment Evaluation marketing communications and promotions Worksheet •Customer Feedback Collection Template 20
  21. 21. In Conclusion 21
  22. 22. SummaryAchieving 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 22