{"id":4336,"date":"2016-01-23T03:12:37","date_gmt":"2016-01-23T03:12:37","guid":{"rendered":"https:\/\/courses.candelalearning.com\/marketingxwaymakerxspring2016\/?post_type=chapter&#038;p=4336"},"modified":"2017-07-24T21:23:27","modified_gmt":"2017-07-24T21:23:27","slug":"reading-commercializing-new-products","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/chapter\/reading-commercializing-new-products\/","title":{"raw":"Commercializing New Products","rendered":"Commercializing New Products"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Objectives<\/h3>\r\n<ul>\r\n \t<li>Explain the process for commercializing new products<\/li>\r\n<\/ul>\r\n<\/div>\r\n<h2>Introduction<\/h2>\r\nThe final\u00a0phase of the new-product development process focuses on commercializing\u00a0the new product.\u00a0This phase includes:\r\n<ul>\r\n \t<li>Stage 6: Test Marketing<\/li>\r\n \t<li>Stage 7: Launch<\/li>\r\n \t<li>Stage 8: Evaluation<\/li>\r\n<\/ul>\r\nAt last the product is ready to go. It has survived the development process and is now, you hope, on the way to commercial success. How can it be guided to reach that marketing success?\r\n\r\n<a href=\"https:\/\/courses.candelalearning.com\/waymakerintromarketing1xmaster\/wp-content\/uploads\/sites\/903\/2015\/12\/The-Marketing-Mix-1.png\"><img class=\"size-medium wp-image-2239 alignright\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2016\/01\/04105521\/The-Marketing-Mix-1-300x277-1.png\" alt=\"The Marketing Mix 1\" width=\"300\" height=\"277\" \/><\/a>The different stages in this phase include a common set of activities performed\u00a0on increasingly larger scale. In all three stages the marketer is implementing, evaluating, and improving the marketing plan, which includes the full marketing mix.\r\n<h2>Test Marketing<\/h2>\r\nThe goal of test marketing is to improve the success of the product launch. The marketer will launch the marketing plan to a smaller subset of the market, quickly analyze how the plan can be improved, refine the plan, and then launch to the full market.\r\n\r\nTest marketing provides a wonderful opportunity to get\u00a0feedback from buyers in a realistic buying situation in which\u00a0they experience the full marketing mix\u2014but it's a challenge to do it right. Because of the special expertise needed to conduct test markets, and the associated expenses, many large manufacturers employ independent marketing research agencies\u00a0that specialize in test marketing. Among the challenging decisions are the following:\r\n<ul>\r\n \t<li><em>Duration of testing<\/em>: the product should be tested long enough to account for market factors to even out,\u00a0but a long test cycle delays\u00a0the broad launch and may diminish the impact of the product announcement.<\/li>\r\n \t<li><em>Selection<\/em> <em>of test markets<\/em>: the test market should reflect the norms for the new product in such\u00a0areas as advertising, competition, distribution system, and product usage.<\/li>\r\n \t<li><em>Sample size determination<\/em>:\u00a0the number of markets and tests must\u00a0account for the different variables in the market, while\u00a0allowing for the fact\u00a0that each test market adds cost to the launch budget and time to the product release cycle.<\/li>\r\n<\/ul>\r\nThe test data drives evaluation and refinement of the marketing plan. Even after all the test results are in, adjustments to\u00a0the product and other elements of the marketing mix may still be made. Additional testing may be required, or the product may be canceled.\r\n<h2>The Launch<\/h2>\r\nThe product launch is truly the beginning of the implementation of a sustained marketing plan\u2014a plan that will be analyzed, evaluated, and adjusted throughout the product life cycle. That said, there certain marketing techniques that figure more prominently during the launch phase.\r\n<h3>Press Strategies<\/h3>\r\nOften companies issue press releases about new products in order to increase visibility through earned media. The press release can be sent to targeted press outlets, posted on the company Web site, sent as an information message to customers, and distributed to industry influencers. The goal of the press strategy is to build\u00a0broad visibility for\u00a0the product, backed up by the credibility of the media outlet.\r\n<h3>Price Discounts<\/h3>\r\nCompanies will sometime offer a price discount during a product launch. When we cover\u00a0pricing in more detail in the next module, we will discuss\u00a0when this can be an effective strategy.\r\n<h3>Channel Partner Incentives<\/h3>\r\nIf the company depends on a partner to sell or distribute the pricing, it might choose to offer pricing discounts and incentives to the distribution partner. A new product carries some risk, and an incentive at launch can encourage channel partners that might be reluctant\u00a0to add the new product or to sell it aggressively.\r\n<h2>Evaluation<\/h2>\r\nThough\u00a0we are identifying \"evaluation\" here as the final stage of the development process, it should be clear that product evaluation is a recurring activity that\u00a0begins with the idea-screening stage. Careful, objective evaluation of the product at every stage leads to better investment decisions and better products. The difference in this final stage of the process is that the marketer has the benefit of significant market data for the evaluation, which can help improve the marketing plan going forward. It is only at this stage\u2014after the product launch\u2014when\u00a0the marketer can see which buyers purchase the product, how competitors respond, and how the new product interacts with the company's other products in the marketplace.\r\n<h2>Target Product Design<\/h2>\r\nTarget's design products include many of the success factors\u00a0we've discussed in this module. As you watch the following video, see if you can identify which\u00a0aspects of Target's approach and design process\u00a0are key to\u00a0their success. What role does the corporate culture play?\r\n\r\nhttps:\/\/youtu.be\/3MqEp1ePfbo\r\n\r\nClick <a href=\"https:\/\/s3-us-west-2.amazonaws.com\/oerfiles\/WM+Marketing\/Target+Product+Design+and+Development.txt\">here<\/a> to read a transcript of the video.\r\n<h2><strong>Check Your Understanding<\/strong><\/h2>\r\nAnswer the question(s) below to see how well you understand the topics covered in this outcome. This short quiz does\u00a0<strong>not<\/strong>\u00a0count toward your grade in the class, and you can retake it an unlimited number of times.\r\n\r\nUse this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.\r\n\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/796","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Objectives<\/h3>\n<ul>\n<li>Explain the process for commercializing new products<\/li>\n<\/ul>\n<\/div>\n<h2>Introduction<\/h2>\n<p>The final\u00a0phase of the new-product development process focuses on commercializing\u00a0the new product.\u00a0This phase includes:<\/p>\n<ul>\n<li>Stage 6: Test Marketing<\/li>\n<li>Stage 7: Launch<\/li>\n<li>Stage 8: Evaluation<\/li>\n<\/ul>\n<p>At last the product is ready to go. It has survived the development process and is now, you hope, on the way to commercial success. How can it be guided to reach that marketing success?<\/p>\n<p><a href=\"https:\/\/courses.candelalearning.com\/waymakerintromarketing1xmaster\/wp-content\/uploads\/sites\/903\/2015\/12\/The-Marketing-Mix-1.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-2239 alignright\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images-archive-read-only\/wp-content\/uploads\/sites\/1505\/2016\/01\/04105521\/The-Marketing-Mix-1-300x277-1.png\" alt=\"The Marketing Mix 1\" width=\"300\" height=\"277\" \/><\/a>The different stages in this phase include a common set of activities performed\u00a0on increasingly larger scale. In all three stages the marketer is implementing, evaluating, and improving the marketing plan, which includes the full marketing mix.<\/p>\n<h2>Test Marketing<\/h2>\n<p>The goal of test marketing is to improve the success of the product launch. The marketer will launch the marketing plan to a smaller subset of the market, quickly analyze how the plan can be improved, refine the plan, and then launch to the full market.<\/p>\n<p>Test marketing provides a wonderful opportunity to get\u00a0feedback from buyers in a realistic buying situation in which\u00a0they experience the full marketing mix\u2014but it&#8217;s a challenge to do it right. Because of the special expertise needed to conduct test markets, and the associated expenses, many large manufacturers employ independent marketing research agencies\u00a0that specialize in test marketing. Among the challenging decisions are the following:<\/p>\n<ul>\n<li><em>Duration of testing<\/em>: the product should be tested long enough to account for market factors to even out,\u00a0but a long test cycle delays\u00a0the broad launch and may diminish the impact of the product announcement.<\/li>\n<li><em>Selection<\/em> <em>of test markets<\/em>: the test market should reflect the norms for the new product in such\u00a0areas as advertising, competition, distribution system, and product usage.<\/li>\n<li><em>Sample size determination<\/em>:\u00a0the number of markets and tests must\u00a0account for the different variables in the market, while\u00a0allowing for the fact\u00a0that each test market adds cost to the launch budget and time to the product release cycle.<\/li>\n<\/ul>\n<p>The test data drives evaluation and refinement of the marketing plan. Even after all the test results are in, adjustments to\u00a0the product and other elements of the marketing mix may still be made. Additional testing may be required, or the product may be canceled.<\/p>\n<h2>The Launch<\/h2>\n<p>The product launch is truly the beginning of the implementation of a sustained marketing plan\u2014a plan that will be analyzed, evaluated, and adjusted throughout the product life cycle. That said, there certain marketing techniques that figure more prominently during the launch phase.<\/p>\n<h3>Press Strategies<\/h3>\n<p>Often companies issue press releases about new products in order to increase visibility through earned media. The press release can be sent to targeted press outlets, posted on the company Web site, sent as an information message to customers, and distributed to industry influencers. The goal of the press strategy is to build\u00a0broad visibility for\u00a0the product, backed up by the credibility of the media outlet.<\/p>\n<h3>Price Discounts<\/h3>\n<p>Companies will sometime offer a price discount during a product launch. When we cover\u00a0pricing in more detail in the next module, we will discuss\u00a0when this can be an effective strategy.<\/p>\n<h3>Channel Partner Incentives<\/h3>\n<p>If the company depends on a partner to sell or distribute the pricing, it might choose to offer pricing discounts and incentives to the distribution partner. A new product carries some risk, and an incentive at launch can encourage channel partners that might be reluctant\u00a0to add the new product or to sell it aggressively.<\/p>\n<h2>Evaluation<\/h2>\n<p>Though\u00a0we are identifying &#8220;evaluation&#8221; here as the final stage of the development process, it should be clear that product evaluation is a recurring activity that\u00a0begins with the idea-screening stage. Careful, objective evaluation of the product at every stage leads to better investment decisions and better products. The difference in this final stage of the process is that the marketer has the benefit of significant market data for the evaluation, which can help improve the marketing plan going forward. It is only at this stage\u2014after the product launch\u2014when\u00a0the marketer can see which buyers purchase the product, how competitors respond, and how the new product interacts with the company&#8217;s other products in the marketplace.<\/p>\n<h2>Target Product Design<\/h2>\n<p>Target&#8217;s design products include many of the success factors\u00a0we&#8217;ve discussed in this module. As you watch the following video, see if you can identify which\u00a0aspects of Target&#8217;s approach and design process\u00a0are key to\u00a0their success. What role does the corporate culture play?<\/p>\n<p><iframe loading=\"lazy\" id=\"oembed-1\" title=\"Target Product Design and Development\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/3MqEp1ePfbo?feature=oembed&#38;rel=0\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>Click <a href=\"https:\/\/s3-us-west-2.amazonaws.com\/oerfiles\/WM+Marketing\/Target+Product+Design+and+Development.txt\">here<\/a> to read a transcript of the video.<\/p>\n<h2><strong>Check Your Understanding<\/strong><\/h2>\n<p>Answer the question(s) below to see how well you understand the topics covered in this outcome. This short quiz does\u00a0<strong>not<\/strong>\u00a0count toward your grade in the class, and you can retake it an unlimited number of times.<\/p>\n<p>Use this quiz to check your understanding and decide whether to (1) study the previous section further or (2) move on to the next section.<\/p>\n<p>\t<iframe id=\"lumen_assessment_796\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=796&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_796\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-4336\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Commercializing New Products. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Target Product Design. <strong>Provided by<\/strong>: BBC. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/youtu.be\/3MqEp1ePfbo\">https:\/\/youtu.be\/3MqEp1ePfbo<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-nc-nd\/4.0\/\">CC BY-NC-ND: Attribution-NonCommercial-NoDerivatives <\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":8,"menu_order":20,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Target Product Design\",\"author\":\"\",\"organization\":\"BBC\",\"url\":\"https:\/\/youtu.be\/3MqEp1ePfbo\",\"project\":\"\",\"license\":\"cc-by-nc-nd\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Commercializing New Products\",\"author\":\"\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"4d9ddfa6-6c8a-4e9a-96ea-3a6fd50089ad","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-4336","chapter","type-chapter","status-publish","hentry"],"part":4280,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/chapters\/4336","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/wp\/v2\/users\/8"}],"version-history":[{"count":7,"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/chapters\/4336\/revisions"}],"predecessor-version":[{"id":5857,"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/chapters\/4336\/revisions\/5857"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/parts\/4280"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/chapters\/4336\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/wp\/v2\/media?parent=4336"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/pressbooks\/v2\/chapter-type?post=4336"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/wp\/v2\/contributor?post=4336"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/suny-marketing-spring2016\/wp-json\/wp\/v2\/license?post=4336"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}