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McGraw-Hill/Irwin
© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved.
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PART
FIVE
LAUNCH
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Launch
Figure V.1
417-4
The Five Decision Sets that Lead to a
Marketing Plan
Figure V.2
517-5
Common Myths About Marketing Planning
for New Products
Figure V.3
• Marketing people make the decisions that constitute a
marketing plan.
• The technical work is complete when the new item
hits the shipping dock. Marketing people take over.
• The marketer’s task is to persuade the end user to use
the new product.
• The more sales potential there is in a market segment,
the better that segment is as a target candidate.
• The pioneer wins control of a new market.
• As with Broadway shows, opening night is the
culmination of everything we have been working for.
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CHAPTER SEVENTEEN
STRATEGIC LAUNCH
PLANNING
717-7
Strategic Givens
Corporate, some team decisions made earlier. Often
found in the PIC Guidelines.
•
•
•
•
•
A specified gross margin: affects funding.
Speed-to-market: affects promotional outlays and schedules.
Commitment to a given channel: affects distribution plan.
Advertising policy: affects promotion decisions.
Pricing policy: affects decision to use penetration or skimming
pricing (slide down demand curve).
817-8
Revision of PIC Goals
• Customer Acceptance Goals
–
–
–
–
Use
Satisfaction
Sales
Market Share
• Financial Performance
Goals
– Time to break even
– Margins
– IRR, ROI
• Product Level Performance
Goals
–
–
–
–
Cost
Time to Market
Performance
Quality
• Other
– Competitive Effect
– Image Change
– Morale Change
917-9
Strategic Platform Decisions
•
•
•
•
•
•
•
•
Permanence
Aggressiveness
Type of Demand Sought
Competitive Advantage
Product Line Replacement
Competitive Relationship
Scope of Market Entry
Image
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10
Permanence
• Permanent, stand-alone.
• Permanent, but as a bridge to other items -e.g., platform strategy.
• Temporary. Given firms’ tendency to develop
streams of products, more and more new
products are actually only temporary.
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11
Some Other Strategic Platform Decisions
• Aggressiveness (aggressive versus cautious
attitude at entry)
• Type of demand sought (primary versus
selective)
• Competitive advantage sought (differentiation,
price leadership, or both)
• Competitive relationship (aim at a competitor,
avoid a competitor)
• Image (create a new image, tweak an existing
image, use the already-existing image)
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12
Product Line Replacement Strategies
Figure 17.1
Butt-on product
replacement
Low-season switch
High-season switch
Roll-in, roll-out
Downgrading
Splitting channels
The existing one is simply dropped when the new one is announced. Example:
Ford's marketing of Mondeo and dropping of Sierra.
Same as butt-on, but arranging the switch at a low point between seasons. Tour
companies use this switch when they develop their new catalogs.
Same as butt-on, but arranging the new item at the top of a season. Example:
Polaroid used this strategy often, putting new replacement items out during the
Christmas season.
Another version of butt-on, but arranged by a sequence of market segments.
Mercedes introduced its C series country by country.
Keeping the earlier product along side the new, but with decreased support.
Example: The 386 chip stayed along side the 486, until the Pentium was
introduced.
Putting the new item in a different channel or diverting the existing product into
another channel. Example: Old electronic products often end up in discounter
channels.
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Scope of Market Entry
This is not test marketing. This is launch. All
forces in place and working.
• Roll out slowly -- checking product, trade and service
capabilities, manufacturing fulfillment, promotion
communication, etc.
• Roll out moderately, but go to full market as soon as
volume success seems assured.
• Roll out rapidly -- full commitment to total market,
restricted only by capacity.
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The Target Market Decision
• Alternative ways to segment a market
– end-use, geographic/demographic,
behavioral/psychographic, benefit segmentation
• Micromarketing and mass customization
• Also consider the diffusion of innovation
Using the Joint Space Map to Identify
Benefit Segments
Aqualine
Islands
Comfort
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3
2
1
Molokai
Fashion
Splash
Sunflare
Figure 17.2
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Factors Affecting Diffusion of Innovation
•
•
•
•
•
Relative Advantage
Compatibility
Complexity
Divisibility
Communicability
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17
Product Positioning
• Who -- Why -- How
• To whom are we marketing?
• Why should they buy it?
• How do we best make the claim?
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To Whom Are We Marketing?
• Users vs. non-users (primary vs. selective
demand)
• Target market criteria (demographic,
geographic, psychographic, benefit
segmentation)
• Everybody -- no narrowing down (mass
customization, Post-It notes)
The real issue here is commitment -- by all NPD
participants and by management
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Why Should They Buy It?
• This too we have been testing -- basic concept
statement used for testing and for guiding technical
(e.g., QFD “Whats”), and the key reason on the “How
likely would you be to buy this if we marketed it?”
(product use test)
• Formatted in three ways:
– Solves major problem current products do not.
– Better meet needs and preferences.
– Lower price than current items.
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How Do We Make the Claim?
• Product positioning statement is a strategic driver --a
core item -- not a list of advantages. Some new
products get one short sentence -- technical items
more.
• Can be stated as one or more features (what it is).
• Can be stated as a function (how it works).
• Can be stated as one or more benefits (how the user
gains).
• Can be stated as a surrogate (no features, functions,
benefits).
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Product Positioning Options
Position to an Attribute
• Feature
• Function
• Benefit (direct or followon)
Figure 17.2
Position on a Surrogate
• Nonpareil
• Parentage
• Manufacture
• Target
• Rank
• Endorsement
• Experience
• Competitor
• Predecessor
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Branding Decisions
• What is the brand’s role or purpose?
• Are you planning a line of products?
• Do you expect a long-term position in the market?
• How good is your budget?
• Physical/sensory qualities of brand considered?
• Message clear and relevant?
• Insulting or irritating to anyone?
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Questions and Guidelines in Brand Name
Selection
Figure 17.8
Question
What is the brand's role or purpose?
Will this product be a bridgehead to a line of
products?
Do you expect a long-term position in the market?
Is the name irritating or insulting to any market
segment?
Guideline
If the brand is to aid in positioning, choose a brand
name with meaning (DieHard, Holiday Inn). If
purely for identification, a neologism (made-up
word) such as Kodak or Exxon will work.
If so, choose carefully so as not to be a limitation in
the future (Western Hotels changed name to
Western International, then finally to Westin.)
If not, a dramatic, novelty name might be useful
(such as Screaming Yellow Zonkers).
Women found Bic's Fannyhose to be objectionable.
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Some Brand Names That Didn’t Work
Crapsy Fruit
Fduhy Sesane
Mukk
Pschitt
Atum Bom
Happy End
Pocari Sweat
Zit
Creap
I'm Dripper
Polio
Sit & Smile
Barf
French cereal
China Airlines snack food
Italian yogurt
French lemonade
Portuguese tuna
German toilet paper
Japanese sport drink
German lemonade
Japanese coffee creamer
Japanese instant coffee
Czech laundry detergent
Thai toilet paper
Iranian laundry detergent
Figure 17-9
17-25
25
Figure 17-10
How Brand Equity Provides Value
High
Brand
Loyalty
Reduced
marketing
costs
Increased
trade
leverage
High
Brand
Awareness
High
Perceived
Quality
Easier to
make
brand
associations
Supports
quality
positioning
Creates
positive
image
Patents or
trademarks
Supports
higher-price
strategy
Helps
customer
process
information
Strong
channel
relationships
Increased
liking and
familiarity
More/Better
Brand
Associations
Other Brand
Assets
Provides value to customer:
Provides value to firm:
Assists in customer information processing
Increases confidence in purchase
Increases satisfaction in product use
Increases effectiveness of marketing programs
Increases customer loyalty and trade leverage
Facilitates brand extensions
Is a source of competitive advantage
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Building Brand Equity
• Getting awareness of the brand and the
meaning.
• Making brand associations -- even the factory
location in Saturn’s case.
• Building perceived quality
• Loyalty in repurchase -- locking them in
• Getting reseller support
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A Brand Report Card
Characteristic
Delivers benefits desired by customers.
Stays relevant.
Prices are based on value.
Well positioned relative to competitors.
Is consistent.
The brand portfolio makes sense.
Marketing activities are coordinated.
What the brand means to customers is well
understood.
Is supported over the long run.
Sources of brand equity are monitored.
Figure 17.11
Examples
Starbucks offers “coffee house experience,” not just
coffee beans, and monitors bean selection and
roasting to preserve quality.
Gillette continuously invests in major product
improvements (MACH3), while using consistent
slogan “The best a man can get.”
P&G reduced operating costs and passed on savings
as “everyday low pricing,” thus growing margins.
Saturn competes on excellent customer service,
Mercedes on product superiority. Visa stresses
being “everywhere you want to be.”
Michelob tried several different positionings and
campaigns between 1970 and 1995, while watching
sales slip.
The Gap has Gap, Banana Republic, and Old Navy
stores for different market segments; BMW has the
3-, 5-, and 7-series.
Coca-Cola uses ads, promotions, catalogs,
sponsorships, and interactive media.
Bic couldn’t sell perfume in lighter-shaped bottles;
Gillette uses different brand names such as Oral-B
for toothbrushes to avoid this problem.
Coors cut back promotional support in favor of
Coors Light and Zima, and lost about 50% of its
sales over a four-year period.
Disney studies revealed that its characters were
becoming “overexposed” and sometimes used
inappropriately. They cut back on licensing and
other promotional activity as a result.
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Profitable Brand Strategies
Low Relative Market Share
Value Brand Category
Premium Brand Category
Figure 17.12
High Relative Market Share
Dead End
Low Road
Example: Nine Lives
Optimum strategies:
Slash costs and prices
“Trump” market leader with
superpremium brand
Example: Oscar Meyer
Optimum strategies:
Cut costs and reduce prices
Build brand equity
Hitchhikers
High Road
Example: Neutrogena, Post
Optimum strategies:
“Don’t rock the boat”
Innovate
Find a niche market
Example: Gillette, Clorox
Optimum strategies:
Value-improving innovations
Premium prices
Source: Adapted from Vijay Vishwanath and Jonathan Mark, “Your Brand’s Best Strategy,” Harvard
Business Review, May-June 1997, pp. 123-129.