New Product Launch Stages and Market Testing

New Product Launch Concepts

1. Defining the Beachhead in the Launch Cycle

What marks the beginning of the beachhead?

• Establishing the Beachhead: This refers to the heavy expenditure needed to overcome sales inertia (“getting the ball rolling”).
• The beachhead begins with the Announcement.

2. What is a Lean Launch?

Lean Launch: A flexible supply chain system allowing the firm to respond rapidly to sales changes.

3. Postponement in the Lean Launch

What does postponement consist of, and what are its types?

Postponement: Refers to delaying finalization of product form and identity until late in the development process, and delaying commitment of inventory until the last possible moment.

Two categories:

• Time postponement: Deploy inventory as late as possible.
• Form postponement: Lock in product design as late as possible.

4. First Step Toward Product Adoption

What is usually the first step towards adoption of a new product?

Awareness of the product.

5. Encouraging Repeat Purchases

What are some ways the firm’s marketing program can encourage repeat purchases by consumers?

• Keep a ready supply available for the buyer who wants to repeat.
• Give long-term discounts.
• Find new uses for the item.
• Provide continued service.

Market Testing Strategies

1. Argument for Late Market Testing

What would be a strong argument for conducting market testing later in the development cycle?

The scope of learning and accuracy would be higher.

2. Competitor Retaliation Impact

What effect would possible competitor retaliation have on the length or desirability of market testing?

A very long period of market testing would give competitors more opportunity to be the first to introduce a competing product in the market.

3. Pseudo Sale Method

What does the Pseudo Sale method of market testing consist of?

The Pseudo Sale asks the customer if they would buy the product if it were actually available.

4. Controlled Sale Method

What does the Controlled Sale method of market testing consist of?

The Controlled Sale requires the buyer to make a purchase, but it is conducted under controlled conditions. It is still a research method because the product has not been released for general sale.

5. Full Sale Method

What does the Full Sale method of market testing consist of?

The Full Sale occurs when the firm has decided to fully market the product, but wants to do it on a limited basis to see if everything is working right.

6. Simulated Test Market Method

What does the Simulated Test Market method of market testing consist of?

Consists of using mathematical formulas to create a false buying situation and observing what the customer does.

7. Minimarket Testing

What is minimarket testing?

• Select a limited number of outlets; each store is a minicity or “minimarket.”
• Do not use regular local TV or newspaper advertising, but chosen outlets can advertise it in its own flyers.
• Can include shelf displays and demonstrations.
• Use rebate, mail-in premium, or some other method to get names of purchasers for later follow-up.