At this stage, full-scale production and marketing programmes are planned, and then the product is launched. There are a number of important decisions to make
before the product is final y launched.
First, the timing of the introduction should be careful y evaluated. In general, it Is more appropriate to introduce the new product during peak periods if demand is seasonal. This wil allow the firm to obtain a high rate of trial and early sales, helping to offset the high costs of introduction. It is also necessary to time the introduction appropriately, so that distributors
will have adequate levels of inventory by the time the introductory promotional campaign
starts. If the new product is being proposed to replace another product, it might be necessary to delay its introduction until the old product's stock is drawn down, through the normal sales.
Second, the firm should properly consider its geographical strategy. In particular, it
should decide whether to launch the new product in a single locality, a region, several regions, the national market, or the international market. It has been observed that only few firms have the confidence, capital, and capacity to launch new products into ful national distribution. They therefore tend to develop a planned market rollout over time. For smaller companies, this approach entails the selection of an at ractive city withaggressive promotional campaign to enter the market. Larger companies on their part often introduce their new products into a whole region and then enter others, one at a time.
Under rol out marketing, firms have to assess the alternative markets for their new products, using such criteria as market potential, firm's local reputation, cost of fil ing the pipeline, quality of research data available in the particular area, influence of area on other areas, and competitive penetration. The outcome of the assessment wil al ow the firm to determine the prime markets and develop a geographical rollout plan.
Third, with respect to the rollout markets, the firm must target its distribution and promotion to the best prospect groups. It is expected that prime prospects should have been identified
during the market testing stage. Ideal y, prime prospects for new consumer products have
been found to be:
(i )e arl y ad o p t ers ( i i ) h e a v y u s e r s
(iii)opinion leaders who talk favourably about the product (iv)reached at lo w cost .
We should note that very few groups of prospective customers possess al of the above characteristics. The best thing is for the firm to rate the various prospect groups on these
features, and then target the best one. The purpose of doing this is to generate high sales as soon as possible to motivate the sales force and at ract other new prospects.
Fourth, other programme decisions, with respect to price, advertising, sales
promotion, and sales and distribution activities need to be developed and
coordinated. These programmes are very important since they influence the sales and profit results of any new products.
4.0 CONCLUSION
You have learned in this unit that every company needs to develop new products. This
is because new-product development shapes the company's future.
Replacement products must be created to maintain or build sales. Customers want new products, and competitors will do their best to supply them. Therefore companies that fail to develop new products are putting themselves at great risk.
5.0 SUMMARY
Once a company has segmental the market, chosen its target customer groups,
identified their needs and determined its desired market positioning, it is ready to develop and launch appropriate new products. Successful new product
development requires the company to establish an effective organisation for managing the development process. Eight stages are involved in the new-product development process idea generation, screening, concept development and testing, marketing strategy development, business analysis, product development, market testing, and commercialisation. The purpose of each stage is to determine whether the idea should be dropped or moved to the next stage.
Self — Assessment Exercise
Outline and discuss the steps in the new — product development process.
6.0 TUTOR — MARKED ASSIGNMENT
1 (a) Discuss the reasons for new-product failures
(b) It has been speculated that successful new-products may even be more difficult to achieve in the future. What are the likely reasons for this ascertain?
7.0 FURTHER READING
Kotler, P (2000): Marketing Management. The Mil ennium Edition . New Delhi, Practice Hall, India.
Stanton, W.J, M.J Etzeland , B. J Walker (1994)
Fundamentals of Marketing 10th Ed. New York, Mc Graw-Hill, Inc