10 Ways to Identify an Impending Product Launch Disaster

10 Ways to Identify an Impending Product Launch Disaster

Ø  There are no goals for the product launch

Launch goals are the cornerstone of a successful product launch, yet so many companies fail to establish them. All CEOs have an expectation of what success looks like, but often those expectations aren’t translated into goals understood by the people entrusted to plan and execute the launch.

Ø  The launch strategy is based on a set of deliverables from a launch "checklist"

A launch checklist is not a launch strategy. An effective product launch checklist is developed after establishing launch goals and then choosing the best strategy to support them. A launch checklist usually gets created after a botched launch.

Ø  The launch plan contains unrealistic timeframes and expectations

It's wise to evaluate the organization within the context of the product being launched to identify readiness gaps. Once identified, allow enough time to address the gaps before they develop into problems that negatively impact the launch.

Ø  Sales enablement training is based on product features

Sales enablement training is one of the most critical components of a successful launch. Unfortunately most training sessions are packed with information about the product with emphasis on the newest features.

Ø  Significant effort is spent creating collateral  for people who never read it

Ninety percent of sales tools are never used by sales people, yet marketing teams keep producing them. Break the cycle by focusing on a deep understanding of your buyers, then build sales tools to influence them through the buying process.

Ø  No single person is responsible for driving product launch results

A launch owner provides a single point of accountability ensuring product launch planning and execution have the high priority they deserve.

Assign the responsibility of achieving the launch goals to a launch owner, and provide them with the flexibility and resources to make it happen.

Ø  The launch plan is based on hunches, not market evidence

Hunches may be great for the casino but not for successful product launches. Hunches are based on "gut feeling" not market evidence, and are guesses. With an initiative as important as a product launch there is no room for guessing.

Ø  The launch plan mimics your competitor

An intimate knowledge of buyers and the buying process provides the best guidance for the most effective launch tactics.

Ø  Existing customers are not adequately considered in the launch plan

It’s staggering how many organizations fail to recognize the impact a new version of a product can have on existing customers. They get so focused on acquiring new customers they forget about existing customers who, if not properly nurtured through the migration, may feel compelled to evaluate competitive alternatives.

Ø  The launch team isn't a team

Product launch is a team sport involving a range of expertise. No single individual can possibly know all the details, especially in large organizations. This necessitates the creation of a cross-functional launch team, where individuals with unique perspectives and experience can contribute to a successful launch.

PRICE CHANGE

The decision to raise or lower prices is a tough one, with many ramifications for your business. To put it another way, two companies who change prices on the same products by the same amount may get widely different results depending on how they implement the new policy.

Sometimes businesses announce major price hikes, even doubling their previous rates. One theory is that a single large price hike will get the pain over with. Businesses may also announce large price hikes when they've experienced major increases in the price of a key ingredient or cost component. A company that is being overwhelmed by sales volume from an unexpectedly popular product may jack up prices to reduce demand to a manageable level.

However, most price hikes are done in stages on the theory that customers will be accustomed to higher prices over time and be willing to tolerate them as they become more loyal. A series of smaller hikes may not even be noticed by customers who would be seriously put off by a single large one.

If a company has  more than one product, consider raising prices on some items while leaving the others the same, or even lowering them. Some customers are sensitive to the slightest price hikes for a particular item while mostly ignoring other increases. Automobile dealers use this fact to their advantage by cutting prices on cars as low as possible and attempting to make much of their profit on accessories like fancy paint jobs, about which customers are less price-sensitive.

There are legitimate reasons to change prices, of course. A company may want to get rid of its remaining inventory and introduce new versions of its products. Companies like Apple, Sony, Dell, and LG have to do this. And in nondigital businesses, many products are seasonal: It makes sense to mark down sweaters in April and linen suits in October, for example. Other valid reasons for changing prices include rising raw material or labor costs, encouraging customers to try something new, and rewarding loyal customers.

But customer reactions to cavalier pricing actions may make quick fluctuations unproductive at best, and inflict lasting damage to a company’s bottom-line at worst. Prices should be changed only as often as the enterprise’s tactical objectives and overarching goals dictate.

STARBUCKS PRODUCT PORTFOLIO ANALYSIS

A business with a range of products has a portfolio of products. However, owning a product portfolio poses a problem for a business. It must decide how to allocate investment (e.g. in product development, promotion) across the portfolio.

What is the Boston Matrix?

A portfolio of products can be analysed using the Boston Group Consulting Matrix. This categories the products into one of four different areas, based on:

Market share – does the product being sold have a low or high market share?

Market growth – are the numbers of potential customers in the market growing or not

How does the Boston Matrix work?

The four categories can be described as follows:

Stars are high growth products competing in markets where they are strong compared with the competition. Often Stars need heavy investment to sustain growth.

Cash cows are low-growth products with a high market share. These are mature, successful products with relatively little need for investment.

Question marks are products with low market share operating in high growth markets. This suggests that they have potential, but may need substantial investment to grow market share at the expense of larger competitors.

Unsurprisingly, the term “dogs" refers to products that have a low market share in unattractive, low-growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever, worth investing in. Dogs are usually sold or closed.

Here is an example of Starbucks' Boston Matrix model

Coffee & Packed food: are products that operate in high growth markets and have high market share. They are products that tend to generate high amounts of cash for Starbucks. Meaning that the company will tend to invest money in developing and promotion their coffee and packed food.

Tea: Tea for Starbucks is a product that operate in a high market growth sector, but have low market share. Since Starbucks is more famous for their coffee, their tea represents inferior product quality or marketing to their competitors such as Twingings. Knowing that the tea market has high growth, Starbucks could analyse reasons for its low market share and to then develop strategies to gain higher share of the growing tea market.

Mugs: are products with high market share operating in a low growth market. This is more of a matured market and the products are very well established, therefore generating great net cash flow. Mugs for Starbucks provide them with a great amount of profits according to seasonal trends and have good profit quality.

Packaged Coffee beans: is a product with low marketing share as well as operating in a low growth market. Starbucks' packaged coffee beans do not generate much cash for the company as customers tend to go to Starbucks for quick and good service for coffee and food.