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McGraw-Hill/Irwin
© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.
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CHAPTER EIGHTEEN
IMPLEMENTATION OF THE
STRATEGIC PLAN
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The Launch Cycle
Figure 18-1
Sales and
Expenditures
Expenditures
Prelaunch
Beachhead
Announcement
Sales
Early growth
418-4
Tactical Launch Decisions and Actions,
Showing Influences on Demand
Figure 18.2
Launch Tactic
Promotion
Advertising
Coupons
Publicity
Sampling
Beta Test Sites
Sales and Distribution
Shows/Demonstrations
Technical Support
Distribution Structure
Intensity of Coverage
Distribution Incentives
Pricing
Introductory Pricing
Price Administration
Product
Breadth of Assortment
Timing
Product Deletion
Preannouncing
Effective For:
Cases where awareness will stimulate trial
Reinforcing awareness
New and controversial technologies with high perceived usage risk
Cases where product advantages best learned through usage
Stimulating “sampling” and as a reference for other potential buyers
Clarifying relative product advantages or where uncertainty exists
Cases of incompatibility in usage process
Cases where relative advantage strong (direct channels)
Cases where warranty/maintenance service needs to be offered easily
Cases where availability needs to be stimulated
High relative advantage and compatibility (skimming policy); early
adoption needs to be stimulated (penetration policy)
Cases where economic risk needs to be reduced (i.e., through rebates or
money-back guarantees)
Introducing new product categories with high relative advantage
High margin but strong relative advantage (fast deletion); high switching
costs (slow deletion)
Building hype for new products; useful if relative advantage is high
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Preannouncement
• Getting to be popular, and very creatively
managed.
• Far from the old days of “tease the public.”
• Preannouncement signaling may be used
(“vaporware”).
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Beachhead
• This refers to the heavy expenditure needed to
overcome sales inertia (“getting the ball
rolling”).
• Steep rising expenditures curve during this
period, up to point where sales are increasing at
an increasing rate.
• Begins with the announcement.
• Key decision during beachhead: when do you
end it? How do you know inertia has been
overcome?
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Copy Strategy Statement
• Communications tools used at launch will have
certain deliverables.
• The way in which the firm communicates these
deliverables to the advertising and promotion
creative people is the copy strategy statement.
• Typical contents:
–
–
–
–
The market segment targeted
The product positioning statement
The communications (promotion) mix
The major copy points to be communicated.
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Typical Examples of Copy Points
• “The provider of this insurance policy is the
largest in the world.”
• “This cellular phone has no geographic
limitation.”
• “Dockers are available at JCPenney.”
• “Future neurosurgeons benefit from the handto-eye skills of computer games like this one.”
There is no limit to the choices here, but there must be a
focus. Only a few copy points are going to be accomplished
at a time.
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A-T-A-R Goals: The New Product Group’s
Obligation
• New product group must persuade itself and
management that the plan can achieve the
necessary awareness, availability, trial, and
repeat purchase...
• and that it can do so in sufficient quantity and
at acceptable cost.
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Motivating Distributors
•
•
•
•
Figure 18-3
Increase distributor’s unit volume.
Increase distributor’s unit margin.
Reduce distributor’s cost of doing business.
Change distributor’s attitude toward the line.
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11
Barriers to Trial
•
•
•
•
•
•
•
•
•
•
Lack of interest in the claim.
Lack of belief in the claim.
Rejecting something negative about product.
Complacency.
Competitive ties.
Doubts about trial.
Lack of usage opportunity.
Cost.
Routines.
Risk of rejection.
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Appropriate Launch Tactics Given Relative
Advantage and Compatibility
Figure 18.4
1. Low Compatibility
2. High Compatibility
A. Low Relative Advantage
Penetration price
Slow deletion
Risk-based promotion (leasing,
money-back guarantees,
equipment allowances)
Intensive distribution
Secrecy before entry
Narrow product assortments
Awareness promotion (coupons,
etc.)
Intensive distribution
B. High Relative Advantage
Preannounce
Broad product assortments
Information-based promotion
(shows, demonstrations, websites,
publicity/education)
Selective distribution
Skim price
Fast deletion
Usage-based promotion (samples,
beta tests) to clarify benefits
received
Selective distribution
Source: Adapted from Joseph P. Guiltinan, "Launch Strategy, Launch Tactics, and Demand Outcomes,"
Journal of Product Innovation Management, Vol. 16, No. 6, November 1999, pp. 520-521.