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Copyright. Vector Consulting Group, 2023.

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Copyright. Vector Consulting Group, 2023.
Acing the New Product Launches in FMCG &
Consumer Goods Segment
Plugging the common loopholes in new product launch strategies
January 2023

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Copyright. Vector Consulting Group, 2023.
New Product Launch is key to making New Product Introduction Successful
What mandates a new product launch?
Increased
competition
Changing
Consumer
behavior
Newer
technologies
Freshness of
product
offerings
Diversification
of risks, etc.

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Copyright. Vector Consulting Group, 2023.
Market dynamics warrant certain
companies to achieve a minimum of
25-30% of sales from new products.
Success of new products weighs
equally on ideation, development and
launch
Total sale
New
Product
25-30% Ideation Development
Launch
Success
=
A revolutionary product can fail due to poor launch

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Copyright. Vector Consulting Group, 2023.
30,000 new products
There are 30,000 new products introduced every year, and 95% fail!
(Clayton Christensen, Harvard Business School Professor and renowned Author)
95% of them fail

6.
Copyright. Vector Consulting Group, 2023.
§ Product became unavailable very soon
§ Vast majority get a chance even to see
the Product (let alone buy it)
Customers could not get the
products in many places
§ Not getting the right
placements (quantity and
type of outlets)
§ Not getting the right
visibility (location, space)
Lack of visibility on the
shelves at retail counters
§ Lack of understanding on
how to use the product
§ Lack of understanding
of products features
(value proposition)
Customers could not get
sufficient product information
§ Missed opportunity, leading
to demise of the product
Delay in addressal of the
feedback received from
the market
New Product Launch Challenges – A postmortem of failed products
Copyright. Vector Consulting Group, 2023.

7.
Copyright. Vector Consulting Group, 2023.
Poor launch attributes to 75% of the failure of new products in retail
Poor New Product
Ideation
Poor New Product
Development
Poor New Product
Launch
High failure rate of
New Product Introduction
Delay in addressal
of feedback received
from the market
Customers could
not get sufficient
product usage/information
Customers could not
get the product in
many places
Lack of visibility
on the shelves of
retail counters

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Copyright. Vector Consulting Group, 2023.
A revolutionary product would fail due to poor launch!
If you do not
§ Scale up your supply chain quickly
§ Make your products visible and available
§ Provide good training to your sales team
§ Respond faster to customer issues

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Copyright. Vector Consulting Group, 2023.
However, this choice is taken out of the hands of companies
Big-Bang v/s Phased Launch
§ The most important characteristics of new product launch – consumer response to a
new product is uncertain
§ Bigger the territory coverage, the higher would be the demand uncertainty
§ Perennial conflict between big-bang launch vs phased launch
§ Big bang launch allows companies to have first mover advantage
§ Phased launch will enable companies to gage the trend and incorporate changes without
impacting the brand

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Copyright. Vector Consulting Group, 2023.
What is the real issue?
Manage new product
introductions well
A
B
1) Forecasts are inaccurate
2) Few markets will give
idea about customer pull
1) Supply lead time is high
2) Potential sales being lost
C
D D’
Launch
pan-India
Launch in
select markets
Protect sales Control inventory
Conflict!

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Why companies struggle to do Phased Launch?
Ideation Development Launch

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Copyright. Vector Consulting Group, 2023.
Delays in developing new products and the threat of missing the launch window lead to hastily
launching the product in as many territories (Big-Bang launch), posing the challenges above!
Why companies struggle to do Phased Launch?
Bigger the launch, the
higher the level of
uncertainty in demand
Sales team needs to be
proportionately bigger to
cater to the scale of
launch
Little time to impart
training to the
sales team and product
USP is not
communicated
effectively to the
potential consumer of
the product
Less focus and time to
respond to consumer
feedback
Supply chain is not
equipped to respond to
the demand fluctuations:
§ Shortages and excess
at the same time
§ Patchy availability
puts off the consumer
§ Poor adoption and
deemed failure of the
product
§ Undertake more new
product
developments
(Negative Vicious
Loop)

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Copyright. Vector Consulting Group, 2023.
Big-Bang launch and associated undesirable effects create a vicious negative loop of having to
undertake many NP developments, thereby reducing the success ratio of new products
Plugging the common loopholes in New Product Launch Strategies
Big-Bang / Poor launch adversely impacts New Product introduction success
1. Success ratio of
NP is low
6. High uncertainty
of demand and poor
readiness puts off
the consumer
2. Need to
introduce more NP
in the market
3. Multiple NPs
are taken up for
development
5. High pressure
to launch NP asap
in many territories
4. Delay in NP
development
Negative Vicious Loop

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Copyright. Vector Consulting Group, 2023.
Direction of Solution
§ Reducing the demand uncertainty during new product launches will improve its effectiveness
§ The best way to reduce uncertainty for better control over the supply chain, and ensure sales
team readiness, is by launching products in a phased manner
Enabling the company to
check whether the
product is working in
those areas before full
roll-out
Ensuring that the product
is displayed well
(percentage of space
and capital for the new
product)
Having continuous
availability of the new
product at the point of
sale
Reducing the demand
uncertainty by testing the
product in representative
territories and POS
(Point-of-Sales)

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Copyright. Vector Consulting Group, 2023.
Direction of Solution - Phased Launch
Plugging the common loopholes in New Product Launch Strategies
Generates capacity to analyse
and respond to feedback
§ There is enough capacity in the
system to respond to the
consumer feedback
§ Helps limit the exposure of
product issues to a small set
of consumers
§ Provides agility to resolve
issues in a timely manner,
yielding higher customer
satisfaction
Aligns the supply chain to the
expected demand
§ Manufacturing capacity can be
stepped-up slowly and aligned
with the demand
§ The distribution channel can
ensure adequate stocks for
display and repeat sales
§ There is no possibility even to
have the buffer capacity to
address the spike in demand
Provides adequate training to
the sales team
§ With this approach, the training
challenges and overheads
reduce
§ A relatively small team to be
trained before launch resulting
in higher training effectiveness

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Copyright. Vector Consulting Group, 2023.
This allows the brands to launch in a timely manner reducing the pressure of having to take the
Big-Bang approach in new product launches (Positive Reinforcing Loop)
Direction of Solution - Phased Launch
Entire sales team gets
trained better to
effectively communicate
the product’s
USP/features and help the
customer’s adopt in a
timely manner, resulting in
quickly gaining customers
trust and loyalty
Learnings from one
roll-out to be transferred
to the next roll-out
The sales team already
trained on the product
initially can be utilized to
train other teams
When more and more
products are launched
successfully, the pressure
on the NPD comes down,
and they can work in a
more focused manner on
a more considered
number of new products

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Copyright. Vector Consulting Group, 2023.
Phased launch and associated desirable effects create a positive reinforcing loop of having to
undertake selects few NP developments, thereby increasing the success ratio of new products
Phased Launch aids in New Product Introduction success
1. Success ratio of
NP is high
6. Less uncertainty of
demand and good
readiness wins the
consumer trust
3. Few NP are
taken up for
development
5. No pressure to
launch NP asap in
many territories
4. Within-time the
NP development
Positive Reinforcing Loop
2. Need to
introduce few NP
in the market

18.
Copyright. Vector Consulting Group, 2023.
What to expect after implementing the New Product launch strategy?
Around 50% increase in
the contribution of new
products to the overall
sales
Minimum
30% improvement
in the new product
success ratio
Significant increase in
the success ratio of new
product launches
Improved product
life-cycle of each new
product generates more
returns for the company

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Copyright. Vector Consulting Group, 2023.
For improving the availability of products across all potential outlets, refer
to https://www.youtube.com/watch?v=pIOCZ13vfeI
For improving the speed and success of new product developments, refer to
https://www.youtube.com/watch?v=3F83tYOtNAs

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Thank You!
www.vectorconsulting.in vcg@vectorconsulting.in
Copyright. Vector Consulting Group, 2023.