How to Launch a New Product

By Michael Chase. This page is available under the Creative Commons Attribution License

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Does your company focus all its product launch energy on the product announcement and first trade show, and then wonder why, a year later, you missed your sales objectives and early customers are now unhappy? You can blame it on a failure to recognize that a new product launch is a process and not an event.

The product launch plan and its execution are new product program deliverables owned by the product manager. Product launch planning addresses all the steps necessary to define the product, price it, produce it, promote it, and equip the sales team to sell it. It requires detailed planning, cross-functional coordination, and customer involvement.

The work on a product launch plan begins the moment management approves the product development plan (PDP). The PDP, if done correctly, describes the new product’s schedule, specifications, costs, and design approach. It is all you need to plan and execute your product launch. You simply assume that the team will hit its goals. You will make revisions along the way, but it is a lot easier to adjust a plan than it is to create one from scratch in the frenzied final innings of a product development program.

Anatomy of a Product Launch Plan

Your product launch plan needs to answer five questions:

  1. What are you going to sell?
  2. Who are you going to sell it to?
  3. Why will they buy?
  4. How will you create demand?
  5. What is the schedule?

For an outline of the details for each of the five questions, see Table 28.

What are you going to sell?What is the name of the new product?
Does it replace an existing product?
What are the product specifications?
What upgrades are included for the installed base?
What is the product configuration(s)?
What are the product, options, and upgrades prices?
Who are you going to sell to?What is your target market?
Who are the key players in that market?
What is your plan to capture those key accounts?
Who will be your beta partner?
Why will they buy?What are the buying decision drivers?
What is your value proposition and positioning?
What data do you need to support your positions?
How do you compare to the competition?
How will you address your competitive issues?
How will you create demand?What is the product demonstration plan?
What selling tools need to be developed?
How and when will you train the sales force?
What are your press, events, and advertising plans?
What is the post-announcement marketing plan?
What is the schedule?When will the product specifications be set?
When will the demonstration system be ready?
When will the sales kit be finished?
When will press and advertising materials be done?
When will you train sales? When will the beta system ship?
When will the first production system ship?
When will you announce the product?
What is your shipment forecast?
When will you transition old-product customers to the new product?
Table 28: Outline of a product launch plan

Account Transition Plans

Capital equipment sales cycles and lead times are long. If your new product is a replacement for an existing product, there will be a significant overlap between your efforts to sell and ship the current product and generating demand for the new one. When this is the case, you will need an account transition plan for every customer that has purchased or plans to purchase your existing product.

Failure to manage this transition period can cost you money and customers. If your customers stop buying your existing product in anticipation of the new product too early, you risk causing a revenue gap and excess inventory of your old product. However, if you do not engage your most important customers before you go public about your new product, your once loyal customers will assume that those last-generation systems you persuaded them to buy are now obsolete.

To avoid these problems, you need account transition plans that find the intersection of what is best for your customer, company, and new product. To create yours, collaborate with sales and follow these steps:

  1. List all the key customers of your current product.
  2. For each customer, document the installed base, backlog, and planned orders for your current product.
  3. Create a plan to transition each customer to your new product, including how you will communicate it to the customer.

Make account transition planning an essential part of the product launch process. Use it to introduce your new product to your most important customers, face-to-face, one at a time.

What to Do When the Product is Late

Your new product development program has been hitting all its commitments. All the signs point to an on-time, on-spec market introduction. Program execution has been excellent. The market is buzzing about the new product. With everything going so well, management has already made delivery commitments to customers.

Then it happens.

In the final round of system testing, you discover a show-stopper design flaw that will keep you from meeting a key performance specification. The team has looked at the issue from every angle. There is no avoiding it. Fixing the problem will push the first shipment date out by two months.

Now what?

Alert Management

Alert management if you are heading for a material breach on a schedule, product performance, or budget commitment, so that they can avoid making a difficult situation worse and evaluate options for recovery.

You must provide those options. It is possible to work through a schedule slip late in the program. Your options for recovery will usually boil down to some flavor of these three:

  1. Finish the product to its original specification; ship on a revised schedule.
  2. Launch the product with a revised specification; ship on time; put the original specification on the product’s roadmap.
  3. Commit to the original specification; ship on time; retrofit in the field.

When you present your options to management, develop a complete scenario of potential outcomes for each, including the impact on:

  • Revenue and profit
  • Budget
  • Critical talent
  • Time to market
  • Competitive position
  • Customer commitments

Involve the Customer

If your customers have already worked your on-time, on-spec product into their plans, you will need to involve them in your recovery planning. Your customers will have a different perspective on the best remedy.

For example, suppose you have already committed a ship date to a customer outfitting a whole new factory. Yours is one of many equipment types they will need to move in. The ballet of loading a factory with a new equipment set is a tightly choreographed event. If one dancer is out of step, the entire show comes apart. If this customer insists you ship on time and finish the product at their site, you should not be surprised.