Introduction
Most companies launch products to the market to ensure that their competitive advantages are maintained. In the many years that professionals have evaluated business success through the measurement of their long-term and short-term actions, being the first in the market has been one of the many ingredients in commercial stardom. Al Ries and Jack Trout suggested forty years ago that the best way to make a brand successful is to be the first one to be recalled by any person . In fact, being the first to market has launched many companies into profitability and their products into household names that it is very difficult to recall any other product that offers the same. For example, the toothpaste brand “Colgate” is one of the products that come immediately to mind when the word “toothpaste” is asked and it would be very difficult to name a brand that is more recognizable than that. Another example is the toy “Slinky” which is a brand name for the toy. Still it would be very difficult to name another springy toy other than the Slinky.
With success stories such as these, management professionals are of the belief that the products must be brought to the market at the soonest possible time. When this product is global in nature (i.e. Apple’s IPhones), the pressure to launch before competitors are of immense pressure. There are many contributory factors which include the level and pace of technology development (i.e. consumer electronics), the impact of communication (i.e. health products), improvements in the transmission of information, increasing competition, cross-evolution of geographical markets and shorter life cycles . When products have shorter life cycles, it becomes more important to launch products immediately since there is a risk of obsolescence. Companies must therefore master product development to succeed at most or survive at the very least .
The Commercialization Process
The commercialization process of a new product is a cycle that introduces a product (goods or services) or a production process (or method) . Launching a product is the last stage of the commercialization process, with other steps being completed before a product is proposed to possible consumers. Product launch is perhaps the most glamorous aspect, with money being spent heavily on this stage for promoting the product. The commercialization process goes through a “funnel” or that phase where in many business ideas are filtered. Then a stage-wise process takes place wherein the business ideas are evaluated based on the organization’s objectives and reception with stakeholders particularly the target customers of the product. Commercialization of a product will happen if and when the company has decided on the timing when the product will be introduced to the market. This is important because most of the time, a product launch affects the sales of a previous product of the company. For example, before the IPhone 5 was launched, there was substantial time between the latest iteration and the last product launch. If there was not enough time between product launches, there is a possibility that the new product would cannibalize the sales of the old product. Apple Corporation made sure that the latest product launched is substantially improved over the recent product such that this issue is not experienced by the company.
Secondly, the company must identify the target market for which the product will be launched. This identification should be a result of the company doing extensive market research and product testing. Lastly, the company has to decide where the product will be launched. This is an issue of multinational enterprises, who operate in many regions of the world. The decision where to launch a product is influenced by many factors, many of which are anticipated by the organization. At this point, a company that launches a product in international markets must have a firm handle of its “Global Strategy “.
Thus a corporation requires a “Global Strategy” which again is defined by Professor Lynch (2012) as a term that covers three areas (global, multinational and international) which is designed for an international organization to achieve its corporate goals as it operates in locations outside its location of origin. The online website Quick MBA (2012) defines the importance of Global Strategy. For the corporation, Global Strategy is important for the corporation because operating in a new country will is essentially a newly opened market that would drive both sales and profits. For many corporations that have “exhausted” the market or is competing in mature markets, this is a welcome addition. Foreign markets also offer valuable resources that may make the corporation more competitive. For example, operating in low-wage seeking countries such as China would make production more cost effective. If costs are lowered, customers naturally benefit. A corporation operating in this scenario will pass on its cost savings to the consumer, making its market position more attractive. If it can do so successfully, then operating overseas has given this corporation another layer of comparative advantage over its competitors. Trade between countries is also a worthwhile activity for international organizations because in the long-run it brings the cost of products and services to a more competitive level, thus helping provide equitable distribution of wealth to all countries.
Launching a Product Internationally
There are many issues that must be resolved when a product is launched internationally. The benefits of international market operations are immense. However it is possible that a company will launch a product without consideration of all the possible issues that may affect the success or failure of an international product launch.
The first issue is the ability of the company to support growth. A company that launches its products would have an estimate of product volume movement. If the product launches well, the company must be able to support accelerated sales. The counter occurrence must be resolved as well. If the product does not do well upon its introduction because it falls short of its promised features and benefits, then the product will definitely fizzle out. The responsibility of proper representation falls on the shoulders of the organization. Promoting the product in an international product launch must consider the truthfulness of the product’s claims.
Additionally, the organization must be ready for categorizing the product before it is launched. A product may exist in “limbo” and consumers may be led to an area where the product does not exist in an established category, and may remain there because of the close proximity of the product to existing products. Consider for example “Phablets”. Phablets are crosses between a “tablet” and a “phone”. A tablet is the large screen mobile device while a mobile phone is a very small tool for communication. Crossing these two creates a “phablet”, which initially confused people (is it a phone or a tablet?). Later on, the category is made definitive because of the benefits the product carries which are substantially different from its two-closest product cousins. If these differentiations were not defined well enough, the product would have been in limbo and would not be successfully picked up.
The reason why this has successfully happened is because the consumers have been educated about phablets. Without the proper education, the products would remain in limbo and would have been a failure. Companies that are launching products must be actively educating people (consumers) as well, as many social networking sites and direct methods of marketing are now more effective than traditional methods.
Finally, the issue of launching revolutionary market that may not have a use is always possible. The product must be sure to have the right ingredients that would offer new or better benefits and yet must be practicable and relevant .
Determining a Launch Strategy
Based on the illustration below, there are three aspects of the product launch strategy that must be taken into account. These are the strategic concern, marketing concern and organizational concern. All these aspects are important to domestic and internationally operating companies because of their implications. For strategic concerns, the objectives may include the product strategy, the market strategy (entry and retention), rivals or competitors and the business strategy for the launch. Product strategy relates to innovativeness and product cycles while market strategy talks about growth and market positioning. Objectives related to competitors include product advantages and threats while business strategy takes form in terms of cost leadership, product differentiation, core competencies and resource allocation.
Marketing concerns have the objectives of product, channel, price and promotion with key criteria being branding and variation of offerings for product objectives, distribution for channel objectives, market penetration for price objectives and cost of promotion and effect of promotion for promotion objectives.
Finally, organizational concern deals with the organization’s structure, culture and capability to develop new products. For structure, the key criteria are integration, differentiation and coordination. For culture the key criteria are openness and delegation while for the capability to launch products, the key concerns are research and development and team formation.
When the organization determines the aspect of the product launch that it wishes to address and the objectives it has identified, then the key criteria for product launch can be determined and the commercial aspect of the launch can be planned for. With this consideration and the other factors that affect international operation, a company may bring to commercialized level, a product that it has developed and tested, for the benefit of the organization and its consumers.
Figure 1 Product Launch Strategies
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