28 November 2008
	LAUNCHING A PRODUCT Who, what, when, where, why? By Sharda Naidoo If you think your product is worth pursuing, then find the right target market for it

There's a general principle in advertising: great products and brands are built on great insight. But creating a new product and bringing it to the market is an expensive business. Companies spend millions of rand to launch a new product - from R5m for a margarine brand to R10m for alcohol and up to R60m for a cellular product. But sometimes there's such a big focus on the launch that there's no follow-through, says Erna George, brand project director of marketing insight company Added Value. "When launching a new product, it is important to look for a position untapped in the marketplace." One of the best ways to identify opportunities is market segmentation. This explains how consumers choose between products or brands. "There are five Ws to consider when trying to understand how people decide on products or brands," says Added Value brand director Eden Lanser. "Who they are, what they use, when they use it, where they use it, and why they use it. The sixth dimension is why they don't use it." He uses the washing powder market as an example. "When launching a new product, you won't go into the Surf market and you can't go into technology because of Skip Intelligence. The key is finding that untapped space, understanding what your customer wants, then turning that into a winning strategy." How do you get that strategy, and where do you start if you want to bring a product to the market? Evaluate if your product idea is worth pursuing. A good market assessment will indicate how the new product is likely to be received by the market and the level of sales that might be possible. It will also help you gain a good understanding of the overall market environment in which the product will operate; the competitive environment, including rival products; competitor pricing and marketing strategies; market-entry barriers, which might include government regulations or special testing requirements; and market-entry opportunities, which might include a chance to partner an established firm or target a market segment. Don Debelak, who has been advising entrepreneurs for more than 25 years on how to market new products, lists four questions to ask to determine if a product is worth pursuing: is it feasible?; can it be produced profitably? (this takes into account everything from packaging to distribution); is there significant competition? (that means tougher sales and lower profits); and does the product make people say: "Wow"? The results of market research need to show how people will compare the new product to others, what price they think is fair, what product features they like and don't like, and what features they think should be added to the idea. Before you even start launching, you need to figure out how to get your return on investment and advertising spend. Once you're convinced your product will sell, find an advertising or branding agency that will help develop a strategy and plan of execution. It could also help with the market research discussed above. Lanser says: "Agencies should be seen as a partner. The advertising or branding agency you go with should help you find a cohesive and well-rounded strategy to bring your product to the market." But how do you choose the right agency to fit your launch plans? Colin Ramparsadh, MD of Zenith Optimedia, says the first point of call is using a reference source like AdFocus to establish the big market players. Once you've identified a few agencies, ask for their credentials. Factors to consider include what products they have launched, the target markets they've reached and the success of their campaigns. "It's important to get a profile of agencies so you can gauge their creative and strategic strengths. Without good strategic input your product is as good as dead." Price is also a determining factor. Some agencies charge a 7% commission fee for your total advertising spend, while others prefer a structured-base fee where you buy a service or fixed resources from an agency (for example 100% time of a director) and the agency charges you a monthly retainer for a year. Target a market. Define who your customers are. To do this, you need to identify what the key touch points are in reaching your target market. For instance, if you have an expensive new fly-fishing rod, the logical targets are wealthy fly fishermen. You might want to narrow this further to fishermen who fish in particular waters. "Some people want to avoid a narrow market because they think they will sell fewer products, but usually the opposite is true," says Debelak. "With a narrow target market you can market your idea more effectively." Ramparsadh says one of the ways to test your target market is to do sampling in stores or with friends and family. "For example, if you're launching a new baby food, the way to gauge your target audience is to drop off samples with friends, family and at clinics." Once you have a target market, identify communications channels to reach your future consumers. These could include trade shows, magazines, electronic and other media, such as outdoor advertising. Produce something people can evaluate. "It's about testing the product before releasing it to the market," says Lanser. Develop a model, drawing or brochure so the target market can offer feedback. This doesn't need to be a working model, but it must allow consumers to honestly evaluate the product. Re-evaluate and adjust. Once you have completed market research, consider respondents' answers. Incorporate good ideas to make the product more appealing. "Results from the market research may take your product idea in a completely different direction, but that's okay. Don't be so attached to your initial idea that you won't take good advice," says Debelak. If the product changes dramatically, do fresh market research with the new version. This research will be used later to approach investors, potential partners or financing institutions, so you want favourable results. Executing the new plan. Work with your agency to find the best strategy to launch the product. Keep costs down. There are many innovative ways to bring a product to market without breaking the bank balance. "Think digital and social networking sites," says Lanser. When briefing your advertising agency, be clear what you want but also listen to its ideas. Many clients think agencies exist only to put client concepts into action. But they have creative and strategic skills and experience that can transform your marketing. Equally, if you hate a campaign idea, say so. It's your money and therefore your prerogative. Keeping track. Measure the success of the launch. Use research to track your customer profile. Does it match the original target audience? Here, you can follow the same advice as in the accompanying story on product reinvigoration. The market is constantly evolving, so move with it.