Polina Konstantinova
Dmitry Morison, head of PR-direction of the communication agency SALO, collected comments from business representatives about what was the most difficult for them when launching a new product on the market. They also talked about how they managed to solve the problems that arose.
1. Customers were skeptical about the new service
Elena Nasobina, project manager at Tochka, a bank for entrepreneurs
Not so long ago, we launched a product for calculating taxes for individual entrepreneurs. Some customers enthusiastically accepted the new service. They understood that the probability of an error in the calculation of the "machine" is much lower. But among the customers there were also those who were wary of the new service. Some entrepreneurs have been trusting all calculations only to their accountants for many years and did not want to “trust” a soulless machine. The main snag was that it was very important for them to have their own person, who can be contacted at any time.
In many cases, skepticism was overcome thanks to the fact that we sat down with clients and described in detail all the calculations. Or they calculated together according to the formula from the tax authorities why such an amount of contributions was accrued.
There are also such clients who exactly liked the service - they did not really want to go into the details of the calculations, but they warned: “If something happens, you will be responsible!”.
It is difficult to say why this particular product caused skepticism on the part of customers. It is not necessary to say that people are simply not ready for innovations, because cloud accounting has long been on everyone's lips.
2. We were not ready for high demand
Ekaterina Makarova, co-founder of car sharing BelkaCar
When BelkaBlack premium carsharing was launched, we did not expect such a boom. On the day of the announcement, the number of applications exceeded ten thousand - no one was ready for such a development of events. We sat day and night and solved the problem only a week later, when the number of verifiers doubled.
When you put on the market New Product, you should work out as many potential situations as possible: what to do if there is an emergency, where to take people, from which departments to attract employees, which relatives to call if the team cannot cope. You should have a ready solution for all these problems so that you do not waste time working through the situation later.
3. Clients did not understand the logic of pricing
Dmitry Zubkov, CEO at Dostavista
Our express delivery service now operates in 10 countries around the world. In 2016, we launched in India - before that there were delivery services, but our service was a new product: crowdsourcing door-to-door delivery in 60-90 minutes.
At first, there was a problem with addresses: in the cities of India, only districts and streets are indicated on the map. Buildings do not have numbers. This created difficulties for couriers and customers.
The first often could not find the right address or Google Maps showed them the wrong point on the map, and they just arrived in the wrong place. And customers did not understand how the tariff is formed. The same delivery could cost differently today and tomorrow.
“Helped” again: if you change at least one letter in the description of the address, they will consider it a different point. For example, today the client could write: "Mumbai, Link Road, the house is opposite the greengrocer", and tomorrow - "Mumbai, Link Road, the house is red, there will be a greengrocery across the road." The service, at the behest of Google Maps, calculated different costs.
We solved the problem by changing the algorithm for calculating tariffs: now the cost is calculated based on the distance between specific small areas, and not points that were previously determined incorrectly. It is still not easy for couriers to find a specific home, the ability to contact the client via chat or phone helps out.
4. We wanted to receive money immediately (but it didn’t work out)
Sergey Shalaev, founder and CEO of Relap.io
In 2014, the Surfingbird team and I started working on a new (then) Relap.io project. We had internal fears - if earlier we were engaged in a b2c project, now we decided to switch to b2b, since even then we felt an increase in demand for native . But no matter how big Surfingbird was, we understood that we were about to hit the ceiling in terms of inventory growth and were afraid that by doing everything at the same time, we would not succeed anywhere, but nevertheless we decided to discover new opportunities for ourselves. And, as it turned out, not in vain.
The main problem was that we wanted to get paid immediately for using recommender technology with the media. But it didn’t work out that way, because those were not the best times: media managers simply didn’t have extra money, and it was very difficult to convince editors and journalists that our algorithms would be able to suggest more interesting content to the reader than the editor.
As a result, we decided to provide our technology for free, which we do to this day.
And the problem with the installation of the widget and the conservatism of the market was solved by time - the journalists really saw that readers like our recommendations, they natively fit into the content of the site and do not cause rejection. Readers began to spend even more time on the site, which affected the amount of advertising inventory at the sites. Subsequently, we offered partners to mix recommendations with advertising and earn with us.
5. Launching a new product is a lottery
Yuri Galtykhin, product manager of Firm MMS JSC (PROLOGY brand)
Bringing a new product to market is always a lottery. You never know how customers will accept a new product until it's on the store shelf. But before a product is in the store, there is a long way to go - from the development of a product concept to the delivery of a finished batch. And each stage has its own challenges.
In electronics manufacturing, the biggest headache is the development of the electronic part itself. Let's say we decide to release new model based on the existing one - but you need to reduce the dimensions of the case and add several functions. For car radios, in theory, this is not very difficult: they usually have a lot of free space inside. We breed a new main board, check: the sensitivity of the radio tuner has decreased. We understand, we found a place where the microcircuit is phoning. A metal screen was added, the board was laid out a little differently. We check, the radio is now in order, but the maximum current on the USB ports is not enough to charge the phone. We figure it out, found out the reason, again we parted the fee in a new way. We check if everything is fine with the radio and USB ports, but we found a new problem. And so it can be twenty more times. And that's not counting the problems with the software, there is also a lot of interesting things.
Separately, I want to say that the creation of a new product is always a compromise. Compromise between price and feature set, but not between price and quality.
Even when planning the release of a new product, we immediately assign it a place in product line, set maximum price and the desired set of features or properties. And then we try to make sure that the price remains within the limits, and that the quality does not suffer. For example, take the corpus. Plastic parts are molded into special molds, and each has a maximum surface angle above which it will be impossible to pull it out of the mold without damaging the part. If the device is designed to use complex shapes, then they use expensive composite molds: the cost of the mold itself will be higher, as well as the price of producing one part. If we are getting close to the budget limit, it will be more correct to redesign the case to use a one-piece mold.
The same goes for the choice of components. For automotive electronics, the most high requirements in terms of reliability and resistance to external influences. If a home TV does not require operation in conditions of very low temperatures or high vibrations, then for a car radio with a display, these are normal operating conditions. Sitting in a car in winter at -20ºC, you will not wait half an hour until the display warms up and starts showing something? Therefore, when we choose, say, the same display, we can sacrifice resolution (put a regular display instead of a high-definition display to reduce the price), but this display will still work in +60 and -20.
In conclusion, I will say that I cannot name any one product with which there were especially many problems during its creation. There are problems with every product when it is launched to the market - it has never happened without it. But any problems can be solved. The main thing is to clearly understand what the product should be, and at all stages of development and production to control the quality and compliance with the requirements, including the budget. After all, a low-quality or too expensive product will not be sold.
6. We are faced with the fact that the product must be "flexible"
Igor Eremin, founder of the Mobile Doctor telemedicine service
When launching the MVP of our telemedicine platform, we were faced with the fact that the product must be super flexible in terms of customization, since insurance companies, banks, mobile operators, and many others can act as partners in telemedicine. And each has its own tasks and "wishlist" in terms of functionality.
The solution was to put a lot of “custom” things into the architecture of the service that were not activated until the first partner appeared from one area or another. For example, the functionality of uploading monthly statistics on consultations, activated policies, records, automatic calculation, and so on. This increased the cost of development initial stage but saved a lot of time and money in the long run.
7. The main difficulty was in the business model itself
Andrey Myakin, COO and co-founder of TNOMER
The biggest difficulty in entering the market was that there were no analogues of our business model and there are no analogues yet. Let me explain what is special: the classic service retail model is geared towards offering one service as a whole, for example, only the overhaul of an apartment. We have about 50 services that cover all repairs in the apartment, in the house and on the site. That is, we strive to accompany the client at all his life turns: after the repair of the apartment we will build a bathhouse, after the bath - a fence, a gazebo, lighting on the site. Then repairs in a new apartment and so on.
At the same time, we do not construction company, and a platform for three participants in the process: the client, the manufacturer of the materials and the team. These three lines should not intersect with each other, we are the guarantor and representative. The TV channel of the same name completes all this, which is integrated into the business model to create trust and generate customers, but must exist separately and independently in order to grow the audience, and for this to produce interesting content.
We built such a complex model in about six months, and we are still optimizing it.
Another difficulty is television filming at the facilities that we are repairing. To show viewers the repair as it is, we film the repair process, accompanying it with expert comments. And on small sites surrounded by 5 tons of various materials, shooting is quite problematic. Therefore, it was necessary to create an interaction algorithm that would allow them to be carried out in such a way that it would not affect the quality and timing of the repair itself: find out in advance about the readiness of the object, figure out where to put the cameras, how to connect the work of the film crew with the work of the construction team.
8. It was difficult to convince clinics to work with us
Ekaterina Yakubchik, DOC+ mobile clinic product manager
We have a partnership system with clinics: through the application, you can make an appointment with highly specialized specialists. There were a number of problems at launch, which will be discussed below.
Problem: finding good clinics
We care about our patients, so we carefully select doctors for the staff, train them and control the quality of each treatment. When we send clients to third-party clinics, we want to be sure that they will receive highly qualified medical care there.
Solution
First, we studied the medical services market, where we paid attention to business reputation clinics, looked at the reviews of clients and doctors. After that, we went to each medical institution as ordinary clients, and at meetings with the management of clinics we found out how they look for doctors and control their quality.
We checked each clinic ourselves. How ordinary clients came to an appointment and looked at how the organizations looked from the inside: is it clean, is it adequate to communicate with you at the reception, is the doctor good, does he sell unnecessary services, does he conduct a full examination, does he explain his appointments. Then the diagnoses and prescribed treatment were evaluated by our head physician.
After connecting the clinic, everything does not end there. We randomly check the quality medical care on medical records and we take feedback from each client about the quality of service.
Challenge: Integration of online schedule and medical data
We wanted to make the product as convenient as possible for the user: you enter the application, choose the specialty of the doctor, a convenient time and place, make an appointment, and after the appointment you receive all the data in the application. No calls to the clinic, no paperwork - everything through the application. This simplification of the patient's life "complicates" our life: we need to integrate with the clinic's medical information system in order to have access to their online schedule and receive the results of a patient's appointment. Our IT resources allow us to do this quickly, but on the part of MISs (medical information systems) is much more difficult.
MISs are of two types: large players who supply their systems to other clinics, and small clinics with self-written MISs. For large MISs, we are a third-party company that is not even their client, which means that by default we are at the very bottom of the priority list. In the case of self-made MISs, clinics are not IT companies, for them this is a completely non-core story, and resources for any improvements are very limited. Both the first and the second can be understood, but integration has become a very serious obstacle for us.
Solution
As a result, the only strategy that worked was to be patient and constantly get in touch until we achieve a result. For example, it took us about a year to convince one of the largest players in the market, but in the end we got access to a large number of partners. So just patience and no magic.
Practice shows that new products occupy only 10% of the market. So, the game application Angry Birds became successful only from the fifty-second attempt. All other launches of the application went unnoticed by users. Only thanks to the perseverance of the developers, who did not give up after fifty failures, this game has gained worldwide popularity.
In this article you will read:
- How is the release of a new product most often in Russia?
- What are the types of new products
- Where to get new product ideas
- How to create a new product and market it
- How to price a new product
- What are the most common mistakes people make when introducing a new product to the market?
What are the types of new product
1. Revolutionary new product. An innovative, original product that has not been implemented by anyone before. The most famous revolutionary products are the first mobile phone, the first printer, the first MP3 player, etc.
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2. A product new to the manufacturer (New for us product). Most often, this is the firm's response to similar proposals from other market participants. A successful new product from one company is copied by competitors with small additions in the form of bright packaging or more. favorable prices. This kind of new product does not bring in much profit because the idea is not original and requires a lot of advertising costs in order to win at least part of the market from the pioneers. As an example, we can cite the introduction of strong beer into the assortment of some breweries after Baltika 9 began to use in high demand at buyers.
3. Next generation product, improved product. The new product is not original, but it has undeniable advantages over its prototypes. No smell, no residue, more compact, longer service life, etc. An example of such a new product: new models of smartphones with increased memory capacity, speed, camera quality, and additional functions.
4. Expansion of the product group (Line extension). The most common implementation of a new product on the market. Despite the simplicity of these measures, it invariably brings good profit. Based on a product already known on the market, the consumer is offered:
– Old product in a new size or volume. Larger diaper packaging with a promotion “20% cheaper”, portioned cereal packaging, economical 5 kg laundry detergent packages are all examples of such innovations;
– Simple or improved type of product. So, almost every car model today is presented by the manufacturer in two versions: economy (with a minimum of additional options) and luxury (more expensive and perfect equipment);
- An additional packaging option for a familiar product. For example: Lyubyatovo corn flakes can be purchased both in a cardboard box and in a bag.
5. Product repositioning, new packaging. Repositioning aims to present a well-known product in a new quality. This option of promoting a new product is used by manufacturers who want to enter the market. new level or occupy a new niche in the market. So, for example, alcoholic beverages of the Kristall brand, after repositioning, took their place in a more expensive segment of the market.
New packaging can give new life old product. Changing the packaging is designed to increase the demand for the product, to interest the buyer. Most often, food manufacturing companies use this method of introducing a new product. For example, one of the milk producers developed a new packaging that resembles the color of a cow; consumers perceived this product as a novelty.
Introduction of a new product: how it is done in Russia
1) In a short time. The development and promotion of a new product in Russia is carried out at a faster pace than, for example, in European countries. The unstable economic environment does not allow manufacturers to rely on long-term prospects. Sometimes such haste and financial savings lead to the fact that the company deliberately ignores the standard procedure for developing and promoting a new product. There are times when a hasty introduction of a new product to the market gives an advantage over competitors and allows you to take a leading position in the market, but more often than not, the rush affects the quality of the product.
2) As voluntarists. In our country, it is not uncommon for a new product to be developed and brought to the market in a short time only because such a task was set by the management. The order of the management must be executed on time, no matter what efforts. Even active financial investments in a new project do not guarantee the quality of the resulting product.
3) With the priority of the product over the consumer. Only after introducing a new product to the market, the manufacturer realizes that the product is not in demand and begins to select the target audience for it.
4) Focusing on Western models. The vast majority of new products launched on the Russian market over the past five to seven years are of imported origin. These are either adapted products of Western firms, or goods produced on the basis of imported raw materials, technologies and ideas. This includes food, household chemicals, and many other goods.
5) Presenting "pseudon" products. In the context of the financial crisis, more and more manufacturing companies are resorting to the release of "pseudon" products. Under a well-known brand, the consumer is presented with its most budget option. In connection with the economy Money lower-quality domestic raw materials are used in production, the weight or composition of the product changes. These changes cannot go unnoticed by the consumer, a decrease in quality can also lead to a decrease in consumer demand.
6) Releasing new products despite the crisis. Some new products, the development and promotion of which began back in the pre-crisis period, are entering the market in new economic conditions, because. a running process cannot be stopped. There was a chance to promote products participating in the import substitution program. European stamps that left domestic market are replaced by domestic goods. Competition has sharply decreased, and in some niches it has completely disappeared.
Why introduce a new service
Vladimir Mozhenkov, CEO, Audi Center Taganka, Moscow
Before introducing a new service to the market, determine the end goal of this event. Conditionally services can be divided into:
Services whose purpose is to generate income.
Non-profit-making services designed to increase consumer loyalty .
These directions are completely different. It is important to decide whether you want to make a profit as a result of the launch of the service, or, conversely, are ready to spend money on it.
Determine the end goal of the service requiring cash injections. It can be PR of the company, sales support for a profitable product or service. Each of the goals pursued must be clearly formulated and divided into tasks. If you want to increase attention to the product, indicate who your target audience is, how attention will be attracted, what you will get in the end and whether it is worth the upcoming costs. Every service that requires financial injections must eventually generate income by expanding the consumer niche, for example, or by returning old customers.
Bringing a new profit-oriented service to market is like launching a new product. More often than not, even highly profitable services exist under a well-known brand and do not get their own brand, with rare exceptions. Banking services, for example, are almost never presented as a separate brand, but presented as a complex. The same applies to such areas as insurance, tourism and other types of services. The main goal of the new service famous brand- increase sales and maintain the image. Therefore, each stage of development and promotion of a new service should be worked out to the smallest detail.
Creating a new product: 5 options for where to look for ideas
Option 1. Learn from nature. All organisms around us consist of particles (cells), which, combined under the influence of a program set at the DNA level, create countless unique copies. Taking a cue from nature, use a modular system in the development of a new product. All your developments, goods, services, programs can be combined into different combinations, receiving an original product without much effort and expense on your part.
Option 2: Play with the names of your services. In the process of creating a new product, use fresh names, design, details, presentation methods. An old product, modified, presented with additions, under new conditions, with a different order, is perceived by the consumer as a novelty, despite the fact that you do not make any fundamental changes.
Option 3. Combine and combine the product from various unusual elements. Proper use of this method of launching a new product allows you not only to double, but to multiply the desired result. If there is a shortage of internal resources, attract external ones, invite outside professionals - your costs will pay off many times over. The principle - "combine the incongruous" gives unlimited scope for creativity and the creation of original goods and services.
Option 4. Tie your products to the most important needs and requests of people. The most win-win options are new product types focused on basic human values. Health, food, beauty, safety are the needs that are relevant for every person at all times. Offering a new product to the attention of the consumer, demonstrate what requests it is able to satisfy.
Option 5. Follow the news. Always be aware of new trends, trends, technical innovations, social and political processes. Thus, you can not only correctly assess the relevance of introducing a particular new product to the market, but also get fresh ideas for new products and services. An example is the Olympic theme, which was actively used by manufacturers in 2014.
How is the development of a new product
New product development is the process of creating original goods and services by inventing innovative products, improving existing offerings, conducting research and testing prototypes.
Let's single out the main stages of the process of launching new products:
Stage 1. Idea generation - collection of information about new products. The generation of new ideas begins with the development and projects of the company's internal services (marketing department, R&D, sales department), the most popular requests are also explored target audience, experience of competitors, materials of specialized media, novelties of exhibitions, recommendations of consulting companies.
Stage 2. Selection of ideas - a thorough analysis of the collected information, screening out the most irrelevant and unpromising options. As a result of this work, the main idea of the future new product emerges.
Stage 3. Concept development and its verification - the idea is brought to life in the form of a concept sample, which is tested on a focus group. Monitoring studies allow you to evaluate the prospects of a product on the market. The focus group can rate a product based on a description or a graphic.
How new products are promoted: step by step instructions
Step 1. We develop a marketing strategy for bringing a new product to the market
It is necessary to analyze the state of the market and identify the most interesting segments and consumer groups. To do this, the following data are collected and analyzed:
- the state and structure of the market, the pros and cons of similar products of competitors and their promotion;
– conditions accompanying the purchase of the product;
- consumer attitude to brands, signs of brand popularity;
- habits and moods of consumers;
– consumer demands and the most frequent motive for buying;
– social group, which can be attributed to a potential buyer, the psychological portrait of the buyer.
Studies that allow this information to be obtained:
1) Study of motivation (work with focus groups, various surveys);
2) Study of consumption and reaction to the product (U + A studies, quantitative surveys, including face-to-face);
3) Sales analysis (retail audit) allows you to get information about sales volumes, sales performance of competitors, the quality of presentation at distribution points, helps to find new ways to promote;
4) The introduction of consumer panels allows you to evaluate the frequency of purchase of the product, brand loyalty, changes in brand perception and demand trends. Tools used: (diaries, tables, periodic surveys of a certain group of consumers).
As a result of the research, the shortcomings of the marketing policy and potential sales markets are revealed. The next step will be the choice of marketing policy and activities aimed at promoting the product.
Step 2. Determine the optimal concept for a new product
At this level of new product launches, there is an active search for ideas in several directions: consultation with experts, general discussions, consumer surveys.
The selection and testing of new product concepts is carried out both by the manufacturer and third-party experts, as well as by consumers. The collected materials are examined in order to find the strengths and weaknesses of the product, market features, and "pitfalls" encountered during promotion.
Step 3. Create a product formula (product description)
The following tests are carried out:
– product quality: composition, color, smell, taste, etc.;
- the reaction of the buyer to the product;
- the pros and cons of the product from the point of view of the buyer;
– areas of application, the benefits of the product.
A combination of qualitative and quantitative research gives the best result. Both types of analysis are aimed at achieving their specific goals. Qualitative methods include focus groups and direct interviews, while quantitative methods include in-hall, in-home.
Focus groups and personal surveys provide an opportunity to assess the attitude of consumers towards a new product and analyze their perception of the product as a whole. Quantitative tests are intended to prove or challenge the results of qualitative research. Often, the results of quantitative studies are not taken seriously by the manufacturer, preference is given to more economical surveys of groups. However, it is quantitative analysis that makes it possible to identify the most successful product formula.
Step 4. We support the finished product with packaging and other elements
After the stages of choosing a concept and creating a product formula are completed, a Marketing Mix is carried out. These are additional activities such as:
- analysis of the brand name (does the consumer remember it well, does it cause negative emotions, is it associated with the desired group of goods);
- analysis of the appearance of a new product (convenience for the consumer, the attractiveness of the design, the availability of information contained on it);
- assessment of the consumer's reaction to the declared value of the product, the compliance of the price with their expectations.
To study spontaneous reactions, focus groups and direct interviews are used, after which the necessary corrections are made. Then a quantitative study is carried out.
Step 5. Conduct comprehensive brand testing
Before the final introduction of a new product, comprehensive testing is carried out, on the basis of which a verdict is issued - the approval of a new product or refusal to bring it to the market. At the same time, the decision to close the project does not mean financial losses, because. promoting an unpromising product will become much more costly than all previous research activities.
For the final testing, quantitative tests are carried out:
– Concept - Use Test determines how the concept and formula of the product match, and whether it meets the expectations of customers.
– Simulated Test Market simulates natural market conditions, makes it possible to estimate the likely volume of sales and profits. Several variants of this analysis are known. Let's give an example of testing: consumers from among the target audience are offered to familiarize themselves with the advertisement of a new product and a similar product of competitors. After they get acquainted with the product, they are taken to a conditional store with a certain assortment and price tags, where they have to choose a product among other analogues and purchase it by paying with conditional money. Purchased goods can be picked up and tested at home. After a while, the participants in the experiment return the test sample, they are given the opportunity to purchase the goods for their own money. Discussions are held with consumers on the pros and cons of a new product, impressions of use, and meeting expectations.
The results are processed according to a certain scheme, which makes it possible to calculate the percentage of the total market volume that the product can receive over time. For calculations under this scheme, the customer needs to provide information about the desired sales volumes, the expected degree of recognition and brand popularity. The reliability and relevance of such a study may be affected by the volatile behavior of the market during the financial crisis.
New product evaluation helped improve service
Mikhail Safran, Marketing Director, ROSNO Group of Companies, Moscow
We test every idea without fail. Theoretical research may be inaccurate, we pay attention to how our consumers relate to new services, master them. We have recently offered our clients such a product as "European service". It consists of comprehensive support for OSAGO and includes the service of an emergency commissioner's visit to the scene of an accident involving a client's car. The commissioner supervises the conduct of an independent examination and takes care of communication with representatives of insurance companies of other participants in the accident.
The product fully met our expectations and successfully passed the test. As a result, demand, sales and our share in the market for such services have increased. We managed to convey to our clients the benefits of cooperation with our company (they do not need to waste their time and nerves), which contributed to the expansion of the client base.
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Next to get feedback from consumers, company employees called each client who used new service, and asked to evaluate the service, express their comments and suggestions, ask questions. Difficulties that arose for several clients at the same time were eliminated, the service was improved. So, during the polls, it turned out that we missed such an important moment as the evacuation vehicle from the scene of the accident (in the case when the possibility of independent movement of the car is limited). The bug was fixed, the service was added.
What should be the price for a new product
There is a trend when new products are installed low price. How to determine the adequate cost of a new product or service? It is better to initially overestimate it in order to be able to lower it if necessary. Undervaluation leads to loss possible income and incorrect positioning of the product in the market. Many companies have learned from their sad experience that after fixing a certain value, its increase takes place with great difficulty.
Focusing on the most popular market niches seems promising to many, but large sales volumes do not yet guarantee high income. Here are 4 factors to consider when choosing a pricing policy for a new product:
1. Reference point. The price of the product, minus discounts and taking into account other promotions, is the starting point, which shows how the manufacturer himself positions his product on the market.
A low baseline negatively affects potential profits: an underpriced product contributes to a quick market conquest, but at the same time, income will be low. Difficulties can also arise when a low price does not correspond to the level that the company would like to occupy in the market.
2. The reaction of competitors. The low cost of the product and the rapid conquest of the market leads to a negative reaction from competitors, confrontation with them, because. these actions will also oblige them to reduce the price and lose profits. A high benchmark demonstrates a company's focus on generating revenue, not gaining cheap popularity. Such a position meets rather a neutral assessment of competitors.
3. Life cycle strategy. When innovative consumers are willing to pay an inflated price for a product, the manufacturer can take advantage of these conditions to generate additional profits, and in the future, reduce costs and thereby expand the sales market. Also, this strategy will allow to assess the ratio of demand and production capabilities.
4. Cannibalization. The manufacturer should analyze the possible impact of the new product on previously introduced products. If the old product is in constant demand, it is advisable to overcharge the new product and try to promote it to a new level for a different target audience. Conversely, if the product is outdated, a low starting point will be more effective as in a short time will attract a large number of customers.
What are the risks of a new product
1. "Inadequate idea" of a new product from the management of the organization. Often, the head of the company, using his unlimited power, inspired by the success of the company, tries to impose his opinion and his view on the idea and methods of promoting a new product on the team, ignoring the results of research, not taking into account the objections of specialists.
2. A new product solves a technological problem, but does not satisfy the needs of consumers. Sometimes when developing a new product, its technical improvement becomes a priority. A kind of "arms race" and the endless production of new generation models becomes a gamble for manufacturers, they are too addictive. Unfortunately, the needs of end users go unnoticed.
3. Entering the market without preliminary marketing research, or their implementation at a low level. In order to save money, companies ignore the importance of market research or conduct it in a superficial, unprofessional manner. As a result, the market is assessed inadequately, failed plans and strategies are adopted.
4. The detachment of top management from the process of creating a new product. If the company's management does not show interest in the process of developing and implementing a new product, exercises insufficient control over the stages of its creation, employees vaguely understand their tasks, may misinterpret the goals and principles of work, and understand them in their own way. The initiative can pass into the hands of active employees pursuing their individual goals that run counter to the goals of the company.
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5. Expecting an immediate effect from the introduction of a new product. Not having received profit and recognition as quickly as they would like, some manufacturers make false conclusions about the failure of the product, its futility and abandon it. Naturally, conquering the market takes time and patience, especially if it is a revolutionary product that consumers should appreciate and master.
6. Lack of control over all stages of the process. If several organizations are involved in the development of a new product, the process of controlling the stages of work for the manufacturer becomes more complicated. This applies, to a greater extent, to small companies using the services of third-party companies and specialists.
7. Compromise product as a result of consensus. Sometimes, in the process of creating a new product, developers are guided not by the needs of target groups and market demands, but by solutions that have been approved by the majority, the so-called compromise product. Such an average option will lose to competitors aimed at the consumer.
8. Wrong price policy. Overpriced or underpriced new product.
9. Poor quality control. Initially good idea for various reasons suffers from the poor quality of the final product.
10. Untimely introduction of the product to the market. The manufacturer missed the moment to launch a new product, or, conversely, introduced it too early, when the market was not yet able to accept it.
11. Weak distribution of a new product. Dealers are not ready to take an unknown, poorly selling product. A weak sales organization nullifies all advertising and promotion efforts.
3 new product launch examples
1. A pseudo product goes to market. Due to the increase in prices for ingredients, one of the well-known domestic yogurt manufacturers decided to change the composition of its product, reducing its cost. This made it possible to leave the selling price unchanged and win in the competition with manufacturers who were forced to raise the cost of their products under the influence of the changing dollar exchange rate. As a result of replacing ingredients with cheap analogues, the quality of the product suffered, which led to a decrease in consumer demand and loss of market positions. Properly conducted market research would help to anticipate this outcome and prevent such losses.
2. Unsuccessful output of a "good" product. A major Russian dairy producer has launched a new excellent quality bio-yogurt on the market. Even the high popularity of the brand in its region did not affect the fact that the product turned out to be unclaimed and did not interest buyers. The fact is that consumers are already accustomed to the taste and texture of imported yoghurts that appeared on the market earlier. As subsequent studies showed, buyers did not even understand what kind of product it was. The manufacturer missed the time to introduce a new product, but with full testing, he could find ways to solve this problem.
3. Refusal to bring the product to market. The European manufacturer of soft drinks is preparing to launch a new juice on the Russian market with an unexpected composition for our public: apple, carrot and banana. The product was positioned as a natural drink that can satisfy the daily requirement for vitamins of an adult. However, studies have shown that the composition of the juice turned out to be too exotic for the Russian consumer, and the abundance of vitamins in their understanding was associated with the addition of artificial ingredients to the composition. Thanks to these findings, the manufacturer was able to avoid spending on promoting a deliberately unsuccessful product by abandoning it.
Information about the author and company
Vladimir Mozhenkov, General Director of the company "Audi Center Taganka", Moscow. Graduated from the Bryansk Institute of Transport Engineering, Institute of Management and Entrepreneurship (Moscow). He completed training and internships in the UK, Germany, Italy and the USA. "Audi Centre Taganka". Field of activity: auto retail. Form of organization: part of the AvtoSpetsTsentr group of companies. Location: Moscow. Number of staff: 267. Length of service General Director position: since 1998.
Participation of the CEO in business: shareholder.
Mikhail Safran, Marketing Director, ROSNO Group of Companies, Moscow. open joint-stock company Insurance Company ROSNO-MS - insurance medical organization specializing in compulsory and voluntary health insurance. JSC ROSNO‑MS was registered on November 18, 1994. The authorized capital of the company is fully paid up and amounts to 600 million rubles.
The success of modern business organizations largely depends on the quality of strategic planning and management. The ability to timely and effectively plan and carry out the renewal of the assortment portfolio is the basis for the competitiveness of the enterprise and its products on the market. No company producing products for consumer markets will not be successful for a long period of time, without carrying out activities to develop and improve their products. This need is due both to the existence of the life cycle of each individual product, which must be monitored and adjusted as necessary and possible, and to the constantly changing needs of consumers of goods. In addition, various factors external environment may cause changes in market activity and commodity policy enterprises.
New products may be different in nature and origin. The classification recognized in world practice is shown in Figure 1.
Figure 1. Classification of varieties of new products
Shorter terms (due to the unstable, too rapidly changing economic situation, and the weakness of the strategic planning of the activities of organizations);
Making decisions on the creation of a new product at the will and order of the management, and not based on the results of an assessment of the conditions and necessity;
Priority of the product over the consumer during development (mostly the target group is selected later, for the finished product);
Orientation to Western samples and their copying;
- "pseudo new" products (release of cheaper products by reducing the cost of production, reducing the number of ingredients or replacing them with cheaper analogues);
Accounting for the preservation of state regulation and socio-political interests in a number of sectors of the national economy, action national programs economic development;
Mass import substitution of products on the market.
The strategy for developing and bringing to market a new product includes nine main stages, presented in Figure 2.
Figure 2. Stages of a new product development and launch strategy
First of all, the relevance of a new product and its success in the market depends on the correct choice of the search direction. Choosing a direction serves four main purposes:
1. Determines the area in which development should be carried out,
2. Helps to direct the search efforts of all company structures,
3. Concentrates the attention of developers on the assigned tasks,
4. The need to develop directions acceptable to all members of the leadership contributes to their advance thinking.
Idea generation is a systematically organized process of finding and generating ideas for new products. In 2014, experts from the scientific and socio-political journal Russian Academy Sciences "Socis", a survey of managers of research departments was conducted, during which the frequency of passing new ideas through further stages of development was found out. The survey results are shown in Figure 3.
Figure 3. Percentage of new ideas passing further development stages
Among the most common and used in companies, methods for generating ideas are: the method of listing features, forced combination, morphological analysis, determining the needs and problems of consumers, brainstorming (storming), synectics.
The idea selection stage is aimed at identifying suitable and rejecting unsuitable proposals. During the initial evaluation of proposed projects for new products, it is necessary to answer questions about the benefits that consumers and society can see in them, the benefits for the company, the compatibility of the project with the goals and strategy of the company, the complexity of its development, advertising and distribution.
The next stage in the development and testing of the concept of a new product involves the creation of a system of basic orienting ideas of the manufacturer about the product being created, its market opportunities and characteristics, and testing the impact of this concept on target consumer groups.
The development of a marketing strategy is based on the creation of a system of marketing activities through which the company intends to achieve the planned sales and profits. The structure of the strategy presentation is presented in Table 1.
Table 1 - The structure of the presentation of the marketing strategy for a new product
After the concept and marketing strategy of the product are formulated, more specific questions arise about the likelihood of matching the actual value of sales volumes, market share and profits from the sale of the novelty planned in the project. This probability can be estimated by economic or business analysis.
Business analysis is a more detailed evaluation of a new product idea in terms of the required investment, expected sales volumes, prices, costs, profit margins, and projected return on investment.
The economic analysis of an idea includes a forecast of costs associated with product development, market entry and sale, an assessment of competition and sales volume, a profitability analysis, and accounting for uncertainty and risks.
If a new product successfully passes the business analysis stage, it moves on to the prototyping stage, during which it turns into a real product. At this stage, it will be found out whether the concept of the product lends itself to being translated into a product that is cost-effective, both from a technological and commercial point of view, and whether the ideas embedded in it are feasible in practice. Finished prototypes are tested. Prototypes that have successfully passed the test for quality and reliability go to the trial marketing stage, where they are tested under conditions close to market ones.
As part of a strategy for developing and launching a new product, the test marketing stage is one of the most important components and should not be ignored. It is a transitional link, meaning the completion of development and preparation for the release of the product. Companies that do not pay enough attention to test marketing or want to save time and money by neglecting it, as a result, lose disproportionately large amounts of money after introducing a fully untested product to the market, when changes can no longer be made or it costs huge efforts and costs. In addition to being able to assess consumer response to new product and make the necessary adjustments, trial marketing allows you to select the most appropriate and effective marketing tools and distribution channels to be used during the commercialization phase, having previously verified their effectiveness. When using trial marketing, the company issuing consumer goods, usually choose one of three methods - standard, controlled or simulated trial marketing.
In case of a positive decision based on the results of trial marketing, the project enters the commercialization phase. The commercialization phase means mastering series production and the launch of a new product on the market, requiring significant costs. When introducing a new product to the market, there must be clear decisions on the four issues presented in Figure 4.
Figure 4. The content of issues that need to be worked out when bringing a product to the market
By the end of the product development process, during which sales are zero and costs rise as we approach the final stages of the process, the product enters a new stage in the life cycle - introduction to the market, usually accompanied by a gradual increase in sales. The beginning of the stage is the first appearance new products on sale. Even if a new product is very successful, it takes time to conquer the market. Significant funds are needed to attract distributors and create stocks.
When introducing a new product to the market, a company may adopt one of several strategies. The enterprise can adjust the level for each of the variables - price, promotion, distribution and product quality. Recommended strategies for bringing new products to market are presented in Table 2.
| Strategy | Variable level | Meaning | Application conditions |
| gradual extraction maximum profit | The price is high, sales promotion costs are low. |
A high price helps to maximize the profit per unit, and low promotion costs reduce overall marketing costs. | The small size of the market and the awareness of buyers about the product, with their willingness to pay for it. A small number of competitors. |
| Accelerated extraction of maximum profit | High price level and sales promotion. | Allows you to expand the circle of knowledgeable consumers, contributing to the volume of sales. Income must cover the cost of incentives. | The market is small, the bulk of buyers have a poor understanding of the product and measures are needed to alert and convince them. |
| Accelerated market conquest | The price is low, the cost of promotion is high. | Provides the most rapid and complete conquest of the market and the capture of its highest share. | The market is large, buyers are price sensitive, unfamiliar with the product, competitors are dangerous. The lower the cost, the larger the scale of production and the richer the experience of the firm. |
| Gradual market conquest | Weak sales promotion, low price. | Systematic introduction of the product to the existing competitive market with low opportunities and low ambitions of the company. | Limited finances do not allow spending large amounts on withdrawal. |
| Average market penetration parameters | Average price level and average sales promotion. | The product is intended for the middle class, does not try to stand out, competes on the basis of quality, emphasis in advertising and positioning on high quality at an affordable price. | Predominantly in the market of necessary goods, with a focus on buyers who are more responsive to quality rather than price, and are also quite knowledgeable, have some idea about the product. |
The company chooses a strategy for bringing the product to the market in accordance with the intended positioning of the product. Choosing a strategy for the launch phase of a product is the starting point of a plan for the entire life cycle of a product. The company focuses its sales on those buyers who are most ready to buy and holds events that allow them to try out a new product or interest consumers in it.
As evidenced by world practice, a fairly small proportion of new products are commercially successful. According to some experts, only 20% of innovations are successful in the market.
Reasons for new product failures are usually as follows:
Lack of a clear and adequate novelty concepts;
Solution of technical and technological problems by the product without meeting the basic needs of the consumer;
Poor coordination of efforts of employees and departments when launching a new product;
Waiting for instant management financial effect from novelty, unpreparedness for long-term investment and promotion;
Low quality of goods;
Wrong pricing policy;
Untimely launch of the product to the market;
Weak distribution and lack of marketing support for sales.
Factors that complicate the development of new products include:
Short life cycle of goods and technologies;
Existing state regulation innovation processes;
Significant amount of necessary capital investments;
Relative similarity of basic technologies for enterprises of certain industries;
High costs for the development and implementation of products.
The key success factors for new products are:
Superiority of the product (the presence of unique properties that bring the buyer additional benefits facilitating better perception and interest);
Marketing know-how (better understanding of the market, development focus on the market and the client);
Technological know-how.
In addition, success factors include: intensive initial analysis, precise formulation of the concept, development plan, control of all stages of bringing the product to the market, access to resources, the time factor, as well as a correct assessment of the degree of risk.
Thus, when forming a strategy for developing and launching a new product on the market, it is necessary to take into account all the factors of success discussed above and the causes of failures, as well as a thorough study of the stages of creating a product and choosing tactics for its introduction to the market, corresponding to its positioning and the established price level and sales promotion. The combination of these measures and a strategic approach to the processes of developing and bringing a new product to the market contribute to:
Http://socis.isras.ru (date of access: 03/31/2016)
Leaders and employees of the organization have to look for the answer to many questions. Is it worth launching a “new product”? What should it be? How much will it cost to create and bring a new product to market? What profit will the new product bring?
These issues are especially aggravated in a crisis situation, when consumer demand is sharply reduced, and on the other hand, markets are freed up after the departure of foreign companies.
Types of new products
In world practice, there is the following classification of "new products".
1. Revolutionary new product
This is a product that did not have previously existing analogues. Examples of revolutionary new products: the first computer, the first fax machine, the first camcorder, the first CD player, etc.
2. New product for the manufacturer (New for us product)
As a rule, such a product is the organization's response to the product of competitors. One of the companies launched a new product that became successful, and competitors began to produce the same product, but offer consumers their own distinctive advantages (lower price, more convenient packaging, etc.). Typically, this category is the least profitable of all "new product" categories. The follower company cannot reap the extra profits that the first company earns and must spend more on advertising to win a certain market share. A typical example of a New for us product is the Nevskoe osobotkoye beer, which began to be produced by a competing manufacturer after the success of Baltika No. 9.
3. Next generation product, improved product
The new product has a characteristic that distinguishes it favorably from its predecessor: faster acting, less caloric, more persistent odor, more reliable in operation, etc. Examples: Pentium II processors versus Pentiums; new diapers that not only absorb moisture, but also take care of the skin, etc.
4. Expansion of the product group (Line extension)
This strategy for introducing a new product to the market is the simplest and most common, but it is usually profitable.
Within one product group (beer, cigarettes, washing powders, etc.) appears:
product in reduced or large economical packaging. For example, "Losk-A" weighing 1350 g, at a price of 62 rubles, with the slogan on the package "10% cheaper". Or Nessafe Classic coffee in sachets of 2 g,
Improved or simplified version of the product. For example, some car concerns offer, along with basic car models, more expensive and technically advanced cars, as well as cheap “simplified” cars with a limited set of features,
The product has a new package along with the old one. For example, a mayonnaise manufacturer begins to produce its product not only in glass, but also in plastic packaging.
5. Product repositioning, new packaging
· Repositioning leads to the perception of buyers of the old product as new: an already existing product is positioned in a new way. Firms resort to repositioning, the purpose of which is to reorient to a new market segment and meet emerging new needs. For example, vodka produced by the Kristall plant, after changing the packaging, began to position itself as a high-quality product at a high price.
· A product that appears in new packaging may be presented as a new product. As a rule, with the help of new packaging, the manufacturer expects to generate interest in the product and attract the attention of potential consumers. The most striking examples can be seen among food manufacturers. So, "Petmol" released milk in "spotted" packaging. In the new packaging, for example, Blend and Soyuz-Apollo cigarettes, and Losk washing powder appeared.
Launching a new product "in Russian"
In Russia, the process of creating and bringing new products to the market has a number of features.
FIRST feature: short time
The development and implementation of a new product often takes place in a shorter time than in the West. This is partly due to the unstable, too rapidly changing economic situation, somewhat weak strategic planning organization's activities. A common situation is when a manufacturer saves money and is in a hurry, so he "skips" some stages. Sometimes it takes 2 to 3 months to develop and launch a new product! In cases where the decision to quickly release a new product meets the needs of the market and the new product appears on time, such efficiency allows you to get ahead of competitors. But in this case, the risk of unsuccessful withdrawal of the product is high.
SECOND feature: voluntarism
Russia is characterized by a "voluntaristic" style of decision-making on the creation of a new product, when the management of the organization orders: "We need to expand the range, and therefore the product" X "should be released to the market by such and such a date." After that, a significant part financial resources spends on creating a product and advertising it, as a result of which the product enters the market.
THIRD feature: priority of the product over the consumer
First, a product is created, it does not bring the expected results, after which they try to find the target groups of its consumers.
FOURTH feature: focus on Western designs
Most of the new products that have appeared on Russian market over the past 5-7 years, are products of Western origin. New goods of domestic producers were created according to Western models, based on Western technologies, using imported raw materials, packaging, and “their” product concept. For example: yoghurts, hair gels, conditioners, roll-on deodorants, “light oils”, etc.
FIFTH feature:"pseudon" products
In our opinion, the current market situation in Russia is characterized by the promotion of "pseudon" products to the market. Some manufacturers in crisis conditions produce a cheaper product by reducing the cost of production: reducing the number of ingredients or replacing them with cheaper analogues. The cost of imported raw materials has risen, and many have shifted to domestic raw materials. The meaning of this strategy lies in the fact that a new product is actually sold under an already well-known brand and at its price. But there is one problem - the consumer may notice the changes that have occurred and not accept them.
SIXTH feature: the emergence of new products, despite the crisis
In the period after the August crisis, new products continue to appear that were “launched” even before the crisis. Their implementation required significant investments, and therefore new products are brought to the market as if “by inertia”. For example, Petmol at the end of 1999 launched a new production baby food, work on the project began 3 years ago ("Business Petersburg" dated October 5, 1998). New products continue to enter the market partly because of the opportunities that have opened up for domestic producers as a result of the crisis. As a result of the withdrawal of a significant share of Western manufacturers from the market, market niches have become vacant. For certain commodity groups competitors have either disappeared altogether or are represented in small numbers.
We started our article with a quote that about 90% of emerging new products disappear from the market within 2-3 years. Unfortunately, we do not have statistical data on the situation on the Russian market, but, in our opinion, this pattern is largely typical for Russia as well. Let's look at the main reasons for the unsuccessful introduction of new products.
Reasons why new products fail on the market
1. "Inadequate idea" of a new product from the management of the organization
Quite often, the leader has unlimited authority in his organization (this is especially true for entrepreneurial companies and companies that have become successful under this leader). In this case, a situation is possible when the manager believes that he is well versed in the market situation and does not pay attention to negative factors, and the organization's staff does not pay his attention to possible problems.
2. A new product solves a technological problem, but does not satisfy the needs of consumers.
Technologically advanced companies are characterized by a focus on continuous improvement of their technological possibilities and introduction of new developments. Technical specialists Those working on the creation of new products are "carried away" by the development process itself and concentrate all their efforts on improving new technologies when creating a product, and not on whose needs the future product will meet.
3. Entering the market without preliminary marketing research or its implementation at a low level
When a firm skimps on research and does not do it, or does it in an insufficiently professional manner, the result is inadequate market information and poor management decisions.
4. Detachment of senior management from the process of creating a new product
The unwillingness or inability of the manager to direct and control the process of all activities to create a product can lead to the fact that the goals and directions of work become vague, incomprehensible to employees. And the process of product development and its implementation depends very much on ambitions. individual employees that may be aimed at achieving personal goals and at odds with the goals of the organization.
5. Expecting an immediate effect from the introduction of a new product
Some companies, having created a new product, expect an immediate effect from bringing it to the market (big profits), and not getting a quick return, they abandon this product, believing that the product is "unsuccessful". Sometimes (especially for technical innovations), it takes a certain amount of time for a new product to "take root" in the market.
6. Lack of control over all stages of the process
production and promotion of a new product When several organizations are involved in the creation and implementation of a new product, the main manufacturer does not always have the ability to control all stages of this process. This is especially true for small companies that use the services of contractors involved in various stages of product production.
7. Compromise product as a result of consensus
When the decision on measures to create and launch a new product is taken collectively, this often leads to the emergence of a compromise product that suits everyone. A “compromise” product is not intended for a well-defined market segment, but is a product “for everyone”. In this case, the new product often loses out to competitors' products that have a clear positioning and satisfy specific, specific needs of consumers.
8. Wrong pricing policy
Product prices are set too high or too low.
9. Poor quality control
An attractive product idea, but not enough opportunities to maintain a consistent product quality.
10. Late time to market
The product is released too early, when the market is not yet ready, or late, when the market no longer needs this product.
11. Weak distribution of a new product
Wholesalers are more willing to take already known, well-purchased goods. Quite often, the advertising efforts of firms and various promotions do not bring results due to poor organized system distribution of goods.
Information support for the preparation of the launch of a new product
The process of preparing the promotion of a new product on the market can be divided into five organizational stages, each of which has its own research tools.
First stage: developing a marketing strategy for launching a new product
The purpose of this stage is to analyze the market situation and identify the most promising market sectors or target groups.
To solve such a problem, information is needed:
· about the structure of the market/market segments: advantages and disadvantages of competitive products, etc.;
about typical situations of buying consumption of goods;
about the perception of brands and the motives for consuming different brands;
about attitudes and stereotypes of buyers;
about the needs and motivation of buyers;
· on the socio-demographic characteristics of consumers and types of consumers.
All necessary information can be obtained through the following types of research:
Motivation studies (focus groups, in-depth interviews, quantitative surveys);
· studies of consumption and attitudes towards the product (U + A studies, quantitative surveys, mostly face-to-face);
Distribution studies (retail audit) provide information on sales volumes compared to competitors, on the representation of goods at points of sale, and make it possible to identify alternative distribution methods;
consumer panels provide information on the frequency of purchases, allow you to assess the degree of customer loyalty in relation to certain brands and identify changes in consumer behavior and attitudes towards brands (diary panel, quantitative surveys conducted at regular intervals using the same methodology, with the same respondents) .
As a result of a complex of studies, it becomes possible to determine the "problem areas" of the marketing strategy and identify the most promising niches in the market for the customer's product. The logical conclusion of this stage is the development by the client of one or more marketing strategies promoting the product to the market.
Second phase: determination of the optimal concept of a new product
At this stage, ideas are generated at several levels: brainstorm with experts, creative group discussions and in-depth interviews with consumers.
The selection and testing of product concepts takes place both by the client company and employees of the research firm, and directly by the consumers of the product. All information received is analyzed according to the SWOT-analisys scheme (strengths, weaknesses, opportunities, threats): strong, weak sides company / its product, market opportunities and "dangers" that lie in wait for the company at the promotion stage.
THIRD stage: Creating a Product Formula (Product Description)
At this stage, we are testing:
The product itself: taste, color, smell, texture, and so on;
The attitude of consumers to the product;
· “advantages” and weaknesses of the product, to which consumers react;
functions (purpose) and possible consumption of the product.
At this stage, a combination of qualitative and quantitative research is needed, each of which solves certain research problems. Qualitative methods (focus groups, in-depth interviews) and quantitative tests (in-hall, in-home) are used to obtain data.
Focus groups and in-depth interviews allow you to identify spontaneous reactions of consumers to a new product and get a general idea of their attitude to the product and its parameters.
Quantitative tests are practiced to refute or confirm hypotheses arising from qualitative research or product hypotheses, regardless of the results of qualitative research. Typically, quantitative tests are underestimated by the client, who often bases his decisions on data from focus groups (which are relatively cheap). However, it is a quantitative assessment that allows you to choose the most optimal product from several formulas.
FOURTH stage: Reinforcement of the finished product: brandname, packaging and other elements
When the product concept and the product itself (its formula) are defined, reinforcing elements are needed, the so-called Marketing Mix. At this stage, there is:
Testing the brand name (the memorability of names, a positive attitude towards names, their clarity, whether the brand evokes associations with the corresponding category of goods is checked);
testing of packaging (functional characteristics, color and graphic solution, informational content of packaging);
Determining the sensitivity of buyers to the price, their price expectations in relation to the new product.
At this stage, focus groups and in-depth interviews are used, during which they receive initial reactions, decide “what to fix”, and with the already limited number of Marketing Mix options, quantitative testing is carried out.
FIFTH stage: Comprehensive brand testing
The final test before launching the product on the market helps the client firm make the final decision on the need to introduce a new product to the market or refuse to launch it.
It should be noted that the refusal to launch a product on the market is not a waste of money and time. The launch of an unsuccessful product, the cost of advertising such a product is many times greater than the cost of the entire research cycle.
At this stage, it is advisable to use quantitative tests:
Concept - Use Test, which allows you to measure the degree of compliance / non-compliance of the concept of the product with the product itself (its formula), helps to understand whether the product itself meets the expectations of consumers.
Simulated Test Market as close as possible to the real market situation, it allows you to predict the potential sales volume. There are several types of such a test. We briefly describe the features of the laboratory test.
Representatives of the target group of this product are invited to the premises of the research firm. They are shown an advertisement for the tested product (sometimes a competitive product) to increase participants' awareness of the product. After that, they are taken to a store-style room where the tested product is presented among competitors' products, all products have price tags. Respondents are asked to make a purchase with pre-issued coupons. Everyone is allowed to take the "purchased" goods home. After a period of using the test product at home, the participants are invited to participate in an interview where they are asked to buy the test product with their own money. In addition, they find out what advantages and disadvantages the tested product has in comparison with those products that they usually use.
The data obtained is analyzed using a mathematical model that allows you to determine the future market share that a new product will occupy after a certain time. To implement this mathematical model, the client must provide data on the planned distribution parameters and the planned level of brand awareness. However, here it is necessary to take into account the specifics of an unstable crisis situation, which significantly reduces the accuracy of the results of such a study.
Examples from Russian practice
To conclude this article, we would like to share some cases of new product launches to the market, which will allow us to get a better understanding of the problems that may arise.
1. A fake product goes to market
One of the big Russian manufacturers dairy products released yogurt with natural fillers. In the future, due to the rise in the price of ingredients, the manufacturer decided to reduce the cost of the product while maintaining its previous price. Thus, imported yoghurts, the price of which fluctuates with the exchange rate of the dollar, should have lost the competition. The ingredients of the product were replaced with cheaper ones and the product was brought to the market under the old brand name. As a result, the consumption of the "new" product dropped sharply, and the brand lost a significant market share. In the case of testing a new product, it would be possible to predict a similar effect and avoid large losses.
2. Unsuccessful launch of a “good” product
One of the major regional producers of dairy products has released a high-quality "live" yoghurt. However, despite the fact that this manufacturer held a leading position in the dairy market in its region, this product was not successful. On the this market the first to appear were imported long-life yoghurts, which differed in taste and texture from “live” yoghurt. The consumer got used to them and did not perceive the newly appeared product as yogurt (it turned out as a result of the study). On the one hand, the market was not ready for this product, on the other hand, such a situation could have been avoided by conducting preliminary research.
3. Refusal to bring the product to market
One of the Western juice producers decided to release a new juice, the formula of which turned out to be unusual for the Russian consumer: apple-carrot-banana juice. The manufacturer planned to promote the new juice as natural product, containing the daily rate of vitamins necessary for the human body. The company ordered a study, and it turned out that the concept of the new juice and its formula are not perceived by Russian consumers and do not meet their expectations - the juice is too unusual (unaccustomed) for them. In addition, the content of a large amount of vitamins in the juice was perceived by Russian consumers as evidence of unnaturalness and the presence of numerous artificial additives in it. The firm saved a lot of money by not bringing an "unsuccessful" product to market.
Literature
John A. Hall. “Bringing New products to the market.” New York, 1991.
E. Jerome McCarby, William D. Perreault. Applications in Basic Marketing. Clippings from the Popular Business Press. 1992-1993 Edition.
Robert R Rothberg. «Corporate strategy and product innovation». 1981.
Yves Marbeau. "NPD Research: The Stages of a Complex Process". ESOMAR Seminar on Best Practice in Market Research, 1998.
Bringing a new product to market today is not easy. It will be new only until competitors redraw your schemes, and this happens quickly. The market is crowded, but the task is quite solvable if you own the technology.
As they say, there is distribution - you don't need a mind. However, in real life, well-established channels for the supply of their own products are the happy lot of a few. And for hundreds and thousands of entrepreneurs, this is just a dream.
And if we are talking about any new project or product, when sales are like walking to the moon, marketing comes first. The main character of the play is a marketer. After all, it is he who must promote the novelty to the masses.
The tighter the rows in a particular business segment (and now there is tightness almost everywhere), the more impossible the task seems to be.
However, everything can be solved if you approach the matter technologically. The main thing here is to own the right technology. Nikolai Soustin, president of the Marketorika agency and part-time teacher at the Higher School of Economics, owns such technologies.
Think strategically
To begin with, Soustin urges, it is necessary to decide on a development strategy for a new project. And to determine the strategy, you must first have a clear idea of \u200b\u200bthe goal.
It is clear that the goal of a business is to make a profit. But you can get it in different ways.
Based ultimate goal there are three strategies. The first is the direct achievement of profit maximization. An example is Apple. Their products are not much different from competitors' products functionally. Moreover, in some "apple" novelties there are spare parts of competitors. But their products are a bit more expensive.
Can afford. Because in this case the consumer pays for the brand, for the legend, for belonging to the "advanced" class, for having a certain status.
The second strategy is to mask the capitalization of the company. It is important to understand here that the company is “grown” initially for sale. In this case, the profitability of the company fades into the background. The main thing is revenue and brand promotion. Turnovers directly affect the cost. Due to recognition, you can also raise the price.
So, for example, Tinkov acted with the gullible Dutch when he “took” his brewing production to them. And where is the famous ("for the elite") beer under the Tinkov brand in stores now?
The third strategy is to create a strategic advantage. Moving away from scientific terms and moving on to human speech, we will explain: this strategy is as old as the world - hammer vacancies in the market everywhere, as far as there is enough strength. Priority is given to rapid quantitative growth at the expense of quality. And the business process can be debugged later.
An example is Coffee House. The average quality of coffee, unruly staff, but it catches the eye at almost every nodal intersection. It seems that these coffee houses are everywhere (we are talking about Moscow).
When choosing a strategy, you need to think, not go with the flow. It is determined, first of all, by the type of product or service that should be thrown into the market.
Here it is important to understand what is more important for this type - availability or the creation of a new need for potential customers.
For example, if we are talking about sour cream, then invest in a massive advertising company meaningless. Sour cream - it is sour cream, no one will go around the whole city in search of a specific brand (but only if you come up with mussel-flavored sour cream). In this case, the existing budget is recommended to be invested in the "shelf". That is, firstly, to make a bright, memorable packaging design. And, secondly, try to establish ties with the maximum number of retail chains. So that your product lies almost everywhere, wherever possible.
But for a new gadget, many will willingly ride to the edge of geography (if they like it, of course). That is, if you suddenly accidentally released something high-tech and relevant, then you cannot do without notifying the world. You need an advertising company.
Your niche does not pull
Many countries and companies (and Russia is no exception) in recent decades have been fascinated by the so-called strategy " blue ocean". Its adherents proclaim that if a market is occupied, one should open one's own. Occupy a free niche created artificially.
Unfortunately, in our age, when the means of communication and, consequently, “peeping” are unusually developed, this is hardly possible. "The ocean turns red" in about 2-3 months.
As an example, Sony's super-thin laptop did not have time to be born when Toshiba's counterpart appeared. It is enough for a competitor to buy a new product, take it apart and it's done.
There are 2 exits here. It is necessary either to create something that will be fundamentally difficult to copy. Or in the shortest possible time to become a brand. And for branding, it is not enough just to develop a logo, packaging design and positioning concept. No, all this is absolutely necessary. But not enough. It will be enough just to "get into the head" of the consumer.
It is said that Coca-Cola invented Santa Claus. Well, not Santa, of course. And the character is a kind old man in red and with a beard. Previously (before Coca-Cola), he seemed to be more like a green gnome. Here is an example of a successful fixing in the minds of people of the image of the company.
Of course, not everyone has as much money as the world giants have, frankly. Therefore, it is better to focus on the unique properties of products.
A workaround in online promotion
It's no secret that now the world is just drowning in advertising. Advertising "white noise" is easily eliminated by consciousness adapted to the surrounding spam. Sometimes difficulties arise with the promotion of already well-known brands. But what if your product is new to the market? After all, at least they should learn about it in order to be interested, not to mention buying.
But here, too, an inquisitive mind will help solve the problem. In the current conditions, it is recommended to focus on those places where a potential consumer will not have a chance to pass by. For example, advertising right during a football match. A rare fan manages not to notice the edge of the field. Or change the TV channel in the blink of an eye.
But the main trend of recent times is, of course, online advertising. Take, for example, working with a search engine (as the easiest option).
Suppose you have invented a cure for cancer. No one in the search line of Yandex or Google will fill in the words “cure for cancer”. People don't believe it (because they haven't heard about your development yet).
But in any case, they are interested in medical issues. And in general, everything that is indirectly associated with this disease. You need to first find out the most high-frequency queries, one way or another associated with a terrible disease. You write articles (in scientific and popular magazines, websites and blogs) using these queries in the text. And the articles themselves are naturally devoted to a new drug.
In this way, using indirect concepts, you can unwind what you need.
Use workarounds. Don't go for a frontal attack. And you and your product will be happy.