JOURNAL 2
twinkle22
352DP-Ch-17.pptChapter 17
Implementation of the Strategic Plan
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The Launch Cycle
Expenditures
Sales
Prelaunch Beachhead Early growth
Announcement
Sales and
Expenditures
Figure 17.1
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Tactical Launch Decisions and Actions, Showing Influences on Demand
Figure 17.2
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Launch Tactic
Effective For:
Promotion
Advertising
Cases where awareness will stimulate trial
Coupons
Reinforcing awareness
Publicity
New and controversial technologies with high perceived usage risk
Sampling
Cases where product advantages best learned through usage
Beta Test Sites
Stimulating “sampling” and as a reference for other potential buyers
Sales and Distribution
Shows/Demonstrations
Clarifying relative product advantages or where uncertainty exists
Technical Support
Cases of incompatibility in usage process
Distribution Structure
Cases where relative advantage strong (direct channels)
Intensity of Coverage
Cases where warranty/maintenance service needs to be offered easily
Distribution Incentives
Cases where availability needs to be stimulated
Pricing
Introductory Pricing
High relative advantage and compatibility (skimming policy); early adoption needs to be stimulated (penetration policy)
Price Administration
Cases where economic risk needs to be reduced (i.e., through rebates or money-back guarantees)
Product
Breadth of Assortment
Introducing new product categories with high relative advantage
Timing
Product Deletion
High margin but strong relative advantage (fast deletion); high switching costs (slow deletion)
Preannouncing
Building hype for new products; useful if relative advantage is high
Preannouncement
- Now a branded, factual preannouncement.
- Replaces “tease the public”, unidentified preannouncements.
- Preannouncement signaling may be used (“vaporware”).
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Beachhead
- The heavy expenditure needed to overcome sales inertia (“getting the ball rolling”).
- Steep rising expenditures curve during this period, prior to 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 strategy statement similar to marketing strategy, designed for creative and media deliverables.
- Typical contents:
- Target market segment description
- Product positioning
- Reasons why support for positioning
- Brand Character
- Communications media mix
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Examples of Copy Points
- You’re in good hands with Allstate (insurance).
Can you hear me now? (Verizon cell phone has the clearest coverage).
- Dockers are now available at JCPenney.
- Did you know your kid is training to be a neurosurgeon? (players benefit from the hand-to-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...
- …to achieve volume, revenue, and profit goals at an acceptable cost.
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Motivating Distributors
- Provide spiffs & incentives.
- Provide trade allowance & incentives.
- Increase distributor’s unit margin.
- Reduce distributor’s cost of doing business.
Figure 17.3
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Barriers to Trial
- Lack of interest in the brand promise.
- Lack of belief in the brand promise.
- Rejecting something negative about product.
- Complacency.
- Competitive ties.
- Doubts about need to try it.
- Lack of usage opportunity.
- Cost.
- Inertia.
- Risk of rejection.
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Appropriate Launch Tactics Given Relative Advantage and Compatibility
Figure 17.4
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A. Low Relative Advantage
B. High Relative Advantage
1. Low Compatibility
Penetration price
Slow deletion
Risk-based promotion (leasing, money-back guarantees, equipment allowances)
Intensive distribution
Preannounce
Broad product assortments
Information-based promotion (shows, demonstrations, websites, publicity/education)
Selective distribution
2. High Compatibility
Secrecy before entry
Narrow product assortments
Awareness promotion (coupons, etc.)
Intensive 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.
Launch Tactic
Effective For:
Promotion
Advertising
Cases where awareness will stimulate trial
Coupons
Reinforcing awareness
Publicity
New and controversial technologies with high perceived usage risk
Sampling
Cases where product advantages best learned through usage
Beta Test Sites
Stimulating “sampling” and as a reference for other potential buyers
Sales and Distribution
Shows/Demonstrations
Clarifying relative product advantages or where uncertainty exists
Technical Support
Cases of incompatibility in usage process
Distribution Structure
Cases where relative advantage strong (direct channels)
Intensity of Coverage
Cases where warranty/maintenance service needs to be offered easily
Distribution Incentives
Cases where availability needs to be stimulated
Pricing
Introductory Pricing
High relative advantage and compatibility (skimming policy); early
adoption needs to be stimulated (penetration policy)
Price Administration
Cases where economic risk needs to be reduced (i.e., through rebates or
money-back guarantees)
Product
Breadth of Assortment
Introducing new product categories with high relative advantage
Timing
Product Deletion
High margin but strong relative advantage (fast deletion); high switching
costs (slow deletion)
Preannouncing
Building hype for new products; useful if relative advantage is high
A. Low Relative Advantage
B. High Relative Advantage
1. Low Compatibility
Penetration price
Slow deletion
Risk-based promotion (leasing,
money-back guarantees,
equipment allowances)
Intensive distribution
Preannounce
Broad product assortments
Information-based promotion
(shows, demonstrations, websites,
publicity/education)
Selective distribution
2. High Compatibility
Secrecy before entry
Narrow product assortments
Awareness promotion (coupons,
etc.)
Intensive 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.
