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Product Introduction

Disciplines > Marketing > Product > Lifecycle > Introduction

Innovation | Early customers | Cost and price | Competition | Launch | See also

The first stage for a product in the market is when it is launched and is first available. The uncertainty that is associated with this can make this stage difficult for all involved.

Innovation

New and innovative products can be problematic when the value is not clear to target customers. Such situations require marketing that explains and illustrates how the product works and shows how it adds desirable value. Showing the product in use, offering tuition of some kind and having customers praise its value may all be important.

Innovations are often covered by patents, copyright and other protection from copying. This not only helps keep competition away -- it may also be used to highlight the innovative nature of the product.

Many people fear buying innovative products which may become unfashionable and leading to ridicule from their friends. Fear of the product failing or lacking due support can also be dissuasive. Marketing plans should of course consider and address such customer fears.

A way of making innovative products acceptable and even desirable is to position them as fashionable, effectively promising buyers that they will be admired by others and hence afforded greater social status. This can be helped with strong styling that makes the product look good as well as delivering on its functional promise.

Offerings which are less innovative and which are based on existing products are easier to understand but may be challenged by customers who want more. Competitors may also latch onto an apparent lack of originality, using this to contrastively promote their own innovations. Marketing of low-innovation products may need to indicate why they are as they are, for example in order to address specific customer requests or offering a new price point model.

At the lowest end of innovation, simple upgrades may be released directly to existing customers as fixes for known issues. Marketing here may be minimal with a simple focus on reinforcing the 'we care' message.

Early customers

Innovators and Earlier Adopters like exploring and trying out new products and may well make up a significant part of the early customer base.

These people are hugely important and need to be wooed carefully as they are ambassadors for your offering. If they hate it (or grow to hate you) then they can easily kill what could be a great success.

Innovators tend to have specific places they look for new products, such as high-tech exhibitions and specialist magazines and websites. A good review in a key journal or blog can spell life or death for a new product.

Early adopters seek advantage and look to innovators for inspiration. If they can see value they usually have a budget to buy whatever might help them out. By definition they are also disloyal and will dump your product for a better alternative.

Cost and price

New products are often very expensive to develop and produce. Physical products required design and manufacture, including the setup of new production lines. At lower volume, manufacturing costs will remain high before economies of scale can be achieved. Software products scale easily but often take many months of development. Service products also have high early costs when they require hiring and setting up of delivery and response teams.

As a result, at product introduction there is often already a significant sunk cost that must be recovered before any profit is made. To this is added marketing costs that are necessarily high in order to reach new customers, beat competitors and create a buzz that makes the product more socially attractive.

Determining price is a difficult process as you both want good sales and yet start to recoup costs incurred. Customers sadly do not care about your costs, so positioning the product as offering new value or fashionable desire can be very important in order to justify higher initial prices.

Against the high-price approach is the argument for low prices which help gain rapid market penetration as well as locking competitors out for longer. If you go for low-price, rapid deployment, it is important that other parts of the company can keep up, including manufacturing and service. A further strategy is to create a managed scarcity that encourages desirability and buzz ('The product is so popular we can't keep up with demand').

Competition

If the product is in a competitive marketplace or is targeting new customers then the levels of competition will be high and the marketing will include positioning against competing products and brands. This should take account of switching costs, both monetary and emotional.

Loyalty may well be an important factor and new products may be released with a key purpose of keeping existing customers. It may also be possible to woo away the customers of competitors, whose consequent response may also require consideration.

One of the good points when introducing a highly innovative product is that there are likely to be few, if any, competitors. If the product takes off this will change, so it is important to take advantage of such 'undefended hills' to establish the product and brand in a strong leadership position.

Launch

New markets are particularly difficult when products are innovative and potential customers are not aware of them or do not realize their value. This typically requires marketing that includes demonstration, trials and stories of realization and delight. Free trials, samples and even full products can help grow the market towards the more profitable future stages.

A big question in market budgeting is the balance between a big-bang launch and ongoing marketing activities. A big launch can be very useful, but if it leaves no money for further activity, it can create a skyrocket product that quickly goes up, selling well in the short term, but then turns over and comes crashing back down again.

This is not cheap and early marketing can be frustrating as all the cost and effort only results in relatively few new customers being gained.

An important part of launch is positioning. In this, the product may need to be positioned in several ways, including in alignment with customer needs, against competitor products, and within one's own portfolio.

After launch, customer and commentator reactions need to be tracked carefully. If there are serious problems, the product may need to be repositioned, re-launched or simply removed from the marketplace in order to cut losses and restore reputation. This can be a very difficult decision as managers often have strong emotional attachments to their products. It is also true that, with sufficient persistence, product could yet take off.

See also