Product launch in 7 steps
- When launching a product, attention to detail is important, and expanding the range will ensure the stable development of the company.
- It is important to define the value proposition for the potential recipient, which should be precisely defined to influence the customer's imagination.
- The next step is to define the needs of the audience and identify regulations that may affect the commercialization process.
- Then, identify the target market, segment the audience, study the macro environment and potential customers.
- Identifying competing solutions, products and services allows you to better understand the market and the position of your own product.
- Competitor analysis is essential for developing an effective communication and promotion strategy for a new product.
- Ultimately, a competitive value proposition should be defined and a business model developed, taking into account aspects such as the billing model or distribution channels.
Nowadays, one of the keys to stable and sustainable development of companies is to constantly expand their offerings - introducing new products and continuously improving existing ones. Launching a product requires taking care of every detail. Here are 7 key steps, none of which should be overlooked for a new product to succeed in the market.
Defining the value proposition of your product for the recipient
The first step is to determine what the value proposition is for the potential recipient. The value proposition is the benefit the recipient gets from using our solution. It is important that it is as precisely defined as possible and affects the recipient's imagination. For biotechnology innovations, an example of a value proposition could be a non-invasive treatment for a condition, with a short recovery time. For chemistry, it could be a catalyst that reduces carbon dioxide emissions by tens of percent. For more "mundane," fast-moving products (e.g., food items), the new value proposition could be based on features such as speed in preparation, a new (better) taste, or functional packaging. The most important thing is that the value proposition carries visible benefits.
Defining the needs of the target group and regulations
The next step to successfully launching an innovative product in the market is to identify the needs that will be satisfied by the new product, technology, invention or service, and to identify regulations that may affect the commercialization process (positively or negatively). This step is particularly important, due to the fact that customers nowadays do not usually think in terms of specific products when making purchasing decisions (i.e., they do not buy products, but make decisions based on their needs; thinking in terms of specific products is in the background). Identifying specific needs is very helpful in determining the strategy for communicating with the audience.
To illustrate the difference between a product and a need, we can use an example : a woman going to the drugstore does not buy shampoo, but, for example, fluffy hair, regeneration of hair follicles or absence of dandruff (not literally, of course). In this case, the product is a shampoo, and the need may be root regeneration. If the new invention is a formula for a new shampoo, it is necessary to specify exactly what need it satisfies, because a promotional message in the "buy shampoo" category is likely to be much less effective than a message in the "buy no dandruff" category.
When defining the needs of the audience, it is also worth paying attention to legislation. It may turn out that our idea is doomed to failure in advance. This will happen in the case of the existence of significant legal restrictions - the problem particularly concerns solutions in the field of modern medicine and products or services with the greatest use for the public good, the development of which is effectively blocked by Polish legislation, whose priority in these areas is still the maximum saving of financial resources, regardless of the quality of the solutions used. An example of such a product can be Icebreaker®, a preparation that effectively replaces salt when clearing snow, developed by Warsaw-based scientist Janusz Amanowicz, M.Sc.
Definition of target market, segmentation of customers, study of macro environment and potential customers
The last step before making the initial decision to enter the market should be definition of target market, i.e., determining which audience segments our product will target. On the one hand, the audience group must not be too narrow, as it may not bring the expected profits. On the other hand, the audience group must not be too broad. Defining such a group may be disadvantageous because of possible inefficiencies - such as those related to communicating the product (product benefits) to a group that is not interested in it at all. This will result in a "blurring" of messages between the manufacturer and its audience. The possibility of specialization and the possibility of creating an effective promotional campaign will also be lost.
Having identified the various segments, it is also worth analyzing the available secondary data on our market, in order to make a preliminary determination of our chances in it. In this case, there is no set pattern: if our product is a cure or modern treatment, it is worth analyzing the incidence of the disease in previous years; if the invention, technology or new product has a well-defined audience (e.g. agritourism farms, sports clubs), it is worth checking in which geographic areas there are the largest number of them, and identify organizations that associate such entities (contact with such organizations is useful both at the stage of developing a commercialization strategy, e.g., to consult a representative of our audience group, and at the stage of developing a strategy for communication and promotion of our solution, e.g., by establishing cooperation with a given organization).
At this stage, it's also worth talking to a group of our potential customers, e.g. by conducting FGI (Focus Group Interview) surveys, in order to preliminarily determine the potential of our product, and perhaps also to preliminarily determine what other needs of our customers we can meet (or what problems that occur when using solutions already present on the market we can eliminate) with the help of the novelty we are introducing.
Identification of competitive solutions, products and services
The most likely scenario is that the need our solution meets is already being met by other, competing products or technologies. It is important to carefully analyze the competition on the market. The most accessible, cheap and easy method is so-called desk research, i.e. analysis of secondary data available on the Internet, in the press or in the literature. However, it may happen that information about the competition is not readily available, for example, on the web. An alternative method of identifying the competition may be to interview experts in the industry in question, or the customers themselves, whom you found in an earlier phase. You can also consider outsourcing the identification and analysis of competitors to a specialized market research entity. This stage is necessary to be able to efficiently offer value to our audience.
Competitor analysis prior to new product launch
After identifying our competitors, it is necessary to carefully analyze their activities (conduct so-called benchmarking). In terms of new products, technologies and inventions, the main areas of study should be: sources of competitive advantage (what makes customers choose this product/technology, from this supplier?), the main sources of customer satisfaction with the product (what makes the customer return? What gives him the greatest satisfaction? What product features make him satisfied?) and the main sources of dissatisfaction (what would customers change about the product? What are they missing?). We should draw conclusions from each of these areas by answering the questions:
- Are we able to compete effectively on a competitive advantage level?
- Are we able to carve out our own USP (Unique Selling Point, i.e., are we able to stand out from the competition with something?)?
- Are we able to offer the audience what they are satisfied with at least as good as the competition?
- Are we able to eliminate sources of product dissatisfaction?
- Are we able to enrich our product or technology with such features that the audience lacks?
It's also a good idea to take on the role of our competitor's customer ourselves, in order to make observations and study the various factors that affect our satisfaction.
Define a competitive value proposition and business model
After drawing conclusions from the competitive analysis, return to where you defined the value proposition. Consider basing or enriching the value proposition on areas that customers of competing solutions are not satisfied with, or on features that customers lack (in the case of the previously mentioned shampoo, these might include healthy hair, without dandruff, at an affordable price).
In this phase, the business model of the venture should also be defined, taking into account the following areas:
- Final value proposition - defined based on competitors' activities and feedback from potential customers,
- Settlement model - Will the recipient pay only for the product, for the license, or will the fee be scaled according to the benefits? (e.g., if our solution is about streamlining the production process, are we able to offer a billing model that involves a fee that is part of the resources saved by the recipient)?
- Distribution channels - How will our product be distributed? Is it worth building our own distribution network, or is it better to cooperate with other entities (e.g., entities that offer products complementary to ours)?
- Main sources of revenue and main sources of costs - for certain types of solutions or products, it may turn out that it will be better to offer a given product, technology or service to the end user for free, and the source of revenue will be, for example, advertisers (if the specification of the product allows it to be a carrier of advertising content). The cost structure should also be clearly defined - it may turn out that the mere delivery (production) of our product does not involve large costs, and human resources will be associated with the largest cost.
Creation and implementation of sales strategies, organization of resources
Based on the previous steps, the final step should be to start implementing activities, bearing in mind the lessons learned from the previous steps. An important element is also the financing of the venture, which is a topic extensively described in the literature - it is impossible to give a ready recipe for selecting the appropriate tools. It is also necessary to determine how widely our product can be available and select promotional and informational tools accordingly, in parallel adjusting them so that the message reaches the widest possible audience we have defined. And don't forget to set yourself quantitative goals (e.g., number of customers, products sold), which will allow you to keep an eye on the progress of the venture once it is launched.
Due to the fact that the term "new products" is not a term for a homogeneous group, it is impossible to "apply a uniform measure" to all of them. It may be that some of the tips presented above will not be applicable in specific cases. However, despite this, I believe that the advice presented should give the reader a good idea of how to approach the issue at hand.