We’ve all heard of the 5 Ps of marketing. No, it’s not Product, Price, Place, People, Promotion, but the other one. Proper Planning Prevents Poor Performance. This is particularly important when launching a new product in the hectic world of B2B. It simply cannot be stressed enough that thorough planning and research will greatly increase the potential success of your new product launch.
Let’s assume that a market study has been completed and there is a demand or at least a strong market potential for the product. Whether you’re a manufacturer or a distributor, planning a product launch requires cooperation from both the sales and marketing teams. Far too often sales reps are caught off guard with new products because of a lack of communication and coordination internally.
Simply holding a launch event and sending out an industry press release is not enough to sustain a successful launch. If you are the distributor, your primary goal is to get your retailers to buy in, and of course, if you’re the manufacturer you need to also drive consumer demand. For this article, let’s focus on distribution to your sales channel and leave consumer demand for another day.
Here are five critical areas to consider when launching a new product.
To launch a product successfully you will need a detailed strategy. The chosen strategy will in part be determined by whether or not the new product is an extension of an existing offering or a completely new category. If it’s an extension to an existing line, then positioning the product amongst others offerings is important in order to grow market share and not cannibalize existing sales. Pricing and product positioning are extremely important when fitting a new product into an existing, successful product line or category. The marketing and advertising channels chosen in this case would likely be the same as those for existing products.
If the product is in a completely new category then the strategy is to squarely take aim at current and potential competition and not worry about how it fits with existing SKUs.
Is the product seasonal? If so, there needs to be enough time to allow for back-orders, sales cycles and merchandising.
Are there other major brands launching at the same time? You don’t want to get lost in the marketing noise.
Is there a major trade event that can act as a platform for your launch?
You may have very established marketing and advertising channels, but a new product launch is the perfect time to re-evaluate your marketing mix and determine what channel(s) are really working best and what new opportunities may exist. Spreading your message too thin can be just as problematic as not going wide enough.
While it may be tempting to want to look exclusively at social and digital media because of costs, are you going to get the penetration you need? In most situations utilizing a balanced approach with digital, traditional and event/promotion marketing will deliver a stronger, more compelling campaign than any one of those alone. Of course how much to spend in each category will depend on sales targets, margins, and turn rates.
How much to spend on a launch and how to go about determining the amount includes a great many factors. Estimating gross sales for the year ahead and then starting with 5% of that figure is one very rough method of determining budget. If you are looking to gain market share from competition, it will likely cost more to successfully launch than if you are fitting a product into an existing line of products since much of the heavy lifting has already been done.
How quickly you want to develop product awareness will also help to determine how much and how fast you should spend. With digital media such as Facebook, Instagram, and Google, you can “throttle” the media purchase based on impressions or clicks. With traditional media you may have to plan further ahead and commit to a specific time horizon and spend. Be sure to keep a good percentage of your budget for promotions and engagement to keep the momentum of the launch going as long as possible.
Your sales and distribution channel is going to be key to the success or failure of the new product launch. Your sales team needs to be engaged in the process from the start. Their enthusiasm and buy-in to the product can make a tremendous difference in the success of a launch regardless of how well planned and executed the strategy may be. Internally launching the product with staff before the launch occurs will help to ensure buy-in throughout the organization. A company’s enthusiasm for a product can have as much of an impact as any well-executed advertising campaign.
With roughly 30,000 new products launched in North America each year, according to the Harvard Business Review, cutting through the marketing noise is essential. The one thing you can control is planning. Do the research: historical sales data, market trends, competitive analysis, and manufacturing data will all help to guide you in positioning a new product for success.