Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
New Products Management 11e / Crawford & Di Benedetto Part V Launch
Part V -- Launch
Suggestions for Using Part V of the Text
Including Answers to the Applications and Case Teaching Notes
CHAPTER CONTENT
Here is the outline of Part V, Launch.
Chapter 16
Strategic Launch Planning
Cases: Wii, Iridium, Comparing Smartphones (C)
Chapter 17
Implementation of the Strategic Plan
Cases: Hulu, Dodge Nitro
Chapter 18
Market Testing
Cases: Pepsico – Pepsi-Kona and Pepsi One
Chapter 19
Launch Management
Cases: Levitra
Chapter 20
Public Policy Issues
Cases: Clorox Green Works; Hybrid or Hydrogen Vehicles at General Motors?; Product(RED)
INFORMATION FOR THE NEW ADOPTER
When we get into product launch, the personal preferences of different professors pull in highly
diverse directions. As stated at the beginning, some prefer to put heavy emphasis on the
The overall task of marketing a product is importantly dealt with in various marketing
courses; putting the whole responsibility in a new products course rather overbalances it. There
1
New Products Management 11e / Crawford & Di Benedetto Part V Launch
The first edition of this text offered a large section on marketing. The intent was for users
to choose those portions they wanted and leave the rest. To the best of our knowledge, very few
made use of the full set of marketing chapters. Numerous requests came in to reduce coverage in
this area, an action consistent with our own use of the book, so subsequent editions did so. The
marketing section now contains materials that deal with marketing planning. The outline of a
Chapter 16 begins by stating the “strategic givens” and revisiting the strategic goals, then
takes up specific decisions for this new product, and focuses again on the higher order ones (the
more detailed ones follow in Chapter 17). For example, one of the platform decisions in Chapter
16 is the target market. Since the first shot at this decision was taken when writing the develop-
ment team's strategy (PIC) the task now is to clarify all of the tweaking that has been going on
The second key marketing decision was also made months ago, that of product positioning,
where we tested concept statements that told how we compared with products already on the
market. But, we find that students are often unable to handle positioning; they think positioning
concerns only psychographics (which some don't really understand), or going against a
competitor. Some introductory courses still use the Avis "We try harder" example, in spite of
evidence that positioning against a competitor is rarely used. We are not sure of the best way to
The third key marketing decision is branding, something that is becoming tougher and
tougher as brand clutter and trademark registrations reduce our options. Also, packaging and its
Chapter 17 takes us into the nitty-gritty of what we are trying to accomplish in the
introductory program, and this is based squarely on the components of a sales
forecast--awareness, availability, trial, and repeat purchase/use. The material gets rather "listy"
2
New Products Management 11e / Crawford & Di Benedetto Part V Launch
Two other concepts that deal with marketing planning are included in Chapter 17: the
launch cycle and diffusion of innovation. They deserve some discussion. The most interesting
Chapter 18 flows directly from the materials in Chapters 16-17. It is usually quite easy for
marketing professors to teach. The new things going on in this area are all based on technologies
the professors have been trained in, an occasional exception being mathematical models for sales
forecasting. Pseudo sale is not difficult, and there are new methods being developed all the time.
The one that requires the most class time is premarket testing (simulated test marketing), because
There are two areas of change in market testing today that should be emphasized. One is
the informal selling method of controlled sale and the other is the bundle of rollout methods of
full sale testing. Oddly, they tend to come together as industry uses them. That is, the firm in
This matter of definitions is a tough one in market testing; each instructor brings to the
Perhaps the toughest part of the marketing launch task, for the professor, comes in Chapter
19--launch management. Previous editions used the term launch control, which fits students'
Even new products managers tend to resist launch management if they see it as taking time
or money, both of which they are out of at this time. Or at least they think they are, and they will
be if they haven't set some aside. They don't deny the importance, but they say they can't do it.
Part V also allows the instructor freedom to work in many other subjects of personal
interest. For instance, recall that the idea of a new products manager as a general manager (dis-
cussed in Part IV on Development) fits here very well. The general manager sets the goals of the
The last chapter in Part V is Chapter 20, the one on public policy. Public policy matters are
sometimes very interesting to students, and sometimes are boring. Careful review of corporate
thinking has convinced us that competent managements today know pretty well how to deal with
We believe that the biggest opportunity in the product liability topic is to help the student
see the genuine managerial problem: conflicting pulls from (1) the basic human desire for safety,
(2) the need for the product or service being produced, and (3) the need to keep the company
Public policy topics, of course, cry out for discussion of specific cases rather than lectures,
though some lecturing is necessary to establish the principles. There is no shortage of current
Of the other pubic policy issues mentioned in the chapter, instructors will pick the ones
they are interested in. Students are generally quick to react to morality matters. For example, we
are told that RCA let one of our classic failures--SelectaVision--go down the drain by refusing to
develop the X-rated videodiscs some thought were necessary to make the product successful.
What would the student do if a family inheritance came in the form of shares in a very successful
But the hottest issue at this time, to students, is environmentalism, and it can be
I leave to each instructor the issue of whether you want to (1) prepare students to make
As if the general problem areas are not difficult enough, there is a section on personal
This is perhaps a good time to draw your attention to Appendix E: Guidelines for
Evaluating a New Products Program. In a way it serves as a review of the course, but it has
INFORMATION FOR THE PREVIOUS ADOPTER – MAJOR CHANGES TO PART V
Part V is streamlined, as some of the older cases have been retired. One of them, Dell Computers
(C), was replaced with the Comparing Smartphones (C) case. The launch chapter has several
changes, most notably being new additions on the topic of launch timing strategy as well as more
on launch planning. The public policy chapter has new sections discussing two of the critical
PROJECT SUGGESTIONS FOR PART V
The students' new product concepts that served us so well earlier in the course tend to let us
The projects used in Part V should reflect the instructor's personal preferences. If you are
doing research or consulting in advertising, for example, you will probably know things that can
be done in that area. If you have an engineering background, you will probably ask the students
to do something that gives them a better understanding of what is going on in the technical
It is also good to make students actually select one precise target market (using some
Some other possibilities are:
Have a group of students select a recent, well-publicized new product launch, and then read up
about its development to see just how many non-marketing departments were involved in
Ask the class to score themselves on their likelihood of being among the first to adopt a new
product. Then, using the factors listed under “Targeting and the Diffusion of Innovation” in
5
New Products Management 11e / Crawford & Di Benedetto Part V Launch
Market testing is very difficult to prepare projects for. Since there are many service organiza-
tions around colleges, this is sometimes a good time to let students study the effects of
If there is some event being planned at the school where you are teaching, perhaps the class
could try to select the critical factors that were reasonably likely to happen and which, if
Have teams of two or three students make presentations to the class on widely publicized new
product introductions. For example, Stroh's Signature Beer made quite a hit in certain
regions of the country, so a team investigated the situation, and made a half-hour
The same type of presentation can be arranged on public policy issues of the moment.
Students can be quite creative, so you should anticipate problems. Once, a student team
6
New Products Management 11e / Crawford & Di Benedetto Part V Launch
Applications Teaching Notes for Part V
Chapter 16
1. "My daughter is a newly appointed assistant professor at a school in North
Carolina, and she recently was joking about how similar the development of
courses is to the development of new products. In fact, she said courses have to
be planned for and their marketing has to be just right. Even to using
positioning as a concept. I wonder if you could take a new college course,
tentatively titled Using the Internet for Business, and show me how you could
position that course, using each of the various methods for positioning a new
product."
Positioning statements begin like this: Business 444, Using the Internet for Business, is different
from other courses because it is:
(Positioning to an attribute)
Feature: . . a new course that utilizes the most advanced tools of cyberspace.
(Positioning to a surrogate)
Competitor: . . a course that is similar to the networking seminar offered across town at
Ipswich.
Endorsement: . . the one field of study recommended by Bill Gates in his recent campus
appearance.
Experience: . . a new course based on the pioneering participation of the School in the
early networks that preceded Internet.
Rank: . . (rank is probably not usable as a positioning tool for a new course, or a new
product either, because it requires a market share to make it work. A new product's
positioning could be altered quickly after introduction if it jumps into a good market
rank.)
With one exception, the techniques for positioning commercial products apply to position-
7
New Products Management 11e / Crawford & Di Benedetto Part V Launch
2. "We're in the furniture business, and I'll bet you have used some of our stuff
if you spent any time in your college dorms. But, I'll tell you something, there's
not much profit in that business--too many competitors, too much
standardization in products. You know, buying on bids, from purchasing
department product spec sheets. I was aware of what you said a while ago about
core benefits, and creating product value around that core, like in service,
image, warranty, etc. But, I'm not sure we could use that approach. Given that,
physically, our desks and beds have to meet specs, how might we create value
around that, to help us defend slightly higher prices?"
On new product designs this is easier, because there are almost always some differences to build
on. But this application refers to a commodity market, and serves as the toughest challenge.
Here are a few ideas:
We may have a manufacturing process that can be made a very high quality one.
We may be able to offer a deal on future innovation--that is, perhaps offer to give students an
upgrade, free, during the third year on a lease contract.
3. "Packaging must be terribly important today on lots of products. We
spend a fortune on it. I read recently about a detergent packaging
gimmick--an 'overcap.' It goes onto a bottle, over the regular cap. It can be
torn away and sent in for a refund. Less likely to be cheated on than a
coupon. Now that's creative. Are you creative? Could you come up with
some ideas like that? We think there is a big packaging opportunity to
differentiate our non-alcoholic beer. New products people on that line
would sure appreciate some packaging ideas they have never heard of.
Good ones, that is, not just a bunch of foolishness."
Good packaging ideas are hard to find, but the students may find a couple. Beer is a mature
category, and hundreds of fine minds have wrestled with the packaging problem for over 50
8
New Products Management 11e / Crawford & Di Benedetto Part V Launch
Reclosure of some type that would be temporary but still enough to make the bottle last
longer. Drinkers of nonalcoholic beer probably are not trying to see how fast they can get
three bottles down.
All of these would probably be too expensive, cost being a critical factor in packaging,
unless their promotional value happened to be great. But, when someone comes up with a great
----------------------------------------
Chapter 17
1. "You frighten me when you mention alliances in the marketing launch.
Hardly a week goes by but what some scientist says we simply must join an
alliance. Don't scientists ever work alone any more? Anyway, even though we
need alliances on the technical side, that's no reason for them on the marketing
side. I don't think I recall hearing about alliances over there--you mention ad
agencies? And resellers? No, those are just contracts for service, and in almost
every case those are pseudo contracts--they can be broken if it's important. Why
does your text call them alliances?"
Answer: Because they are, and very similar to the technical ones at that. And if we recognize
advertising agency agreements--one often hears that it doesn't make any sense to crimp an
agency to where they don't make good money on the account. Same for distribution
contracts--they work best when they are win-win.
2. "Incidentally, some of the folks in the software division have come up with an
idea for a new service. Seems as though they found that computer people
around the world have real trouble learning about new software--not its
existence and its general claims (that's in all the magazines and direct mail they
9
New Products Management 11e / Crawford & Di Benedetto Part V Launch
get, in their own languages even.) No, what we're going to sell is reports of all
favorable and unfavorable comments that appear in the press, anywhere in the
world, about all new software. The customer can access this information,
on-line, with reports classified by type and by brand of software, and in six
languages. They think software users, particularly those out of the mainstream
of personal business contacts, will like it. But, and this is a problem they worry
about, the whole field of software is so full of announcements, news, people
yelling. How in the world can they break through all that noise to get prospects
informed of this new service (I guess you'd say aware) to where they can make a
decision to try it. (They have a trial package, by the way: 5-day, 20 inquiries, for
a very small fee.)"
The purpose of this application is to force the student to take a strong look at one of the key
hurdles in new product launches. Developers usually far overestimate the awareness they will
situation--global, across all industries and functions, intense interest for short bursts of time but
little before or after, and so on. Media are difficult, samples are not obvious, on-line access is
3. "Sampling is another tool we like--you know, like that trial package I just
mentioned. Samples are really effective in getting trial among the people who
are somewhat inclined toward a new product in the first place. But several of
our divisions can't use samples per se because of the nature of their products.
Could you tell me what might be a substitute for samples in the marketing of a
new type of each of the following?
a. Retirement condos.
b. Coffins.
c. Milling machines.
d. Diamond rings.
e. Replacement tires."
(meaning that the service being sampled is not that of actually sensing what lying in a
coffin is like), then they can visit the mortuary and see others' bodies.
c. Milling machines: As with the elevators, trial on a milling machine would probably begin
with a visit to another installation. It might be possible to rent time on such a machine or to
buy a used one if the item had previously been offered in another country. But most
d. Diamond rings: Stores usually have used rings in stock that can go out for trial wearings. If
the ring, not the stone, then trial rings can be made with settings of glass.
----------------------------------------
Chapter 18
1. "Several of our divisions have lately been using this so-called minimarket
testing method. We had some shaving products use BehaviorScan, and a new
upscale bandage line used a somewhat similar service from A. C. Nielsen. But I
am increasingly concerned about the panel members in those test cities. My
concern is not that the people become accustomed to the testing or that they
overreact to stimuli. These are valid concerns, but there's not much I can do
about them. I am concerned, however, that our people do not know the effect of
these things on the data we get. How would the results of our tests be affected if
people like the testing too much? Or, if they tend to become professional test
participants and begin thinking like judges?"
This is a tough question and a legitimate concern. Probably no one has all the answers. In the
first place, the services deny that the negative situations exist. They feel the panels are fresh and
The real issue is, how does one measure the effects (if any) of these conditions? Splitting
Perhaps this is a problem for the individual instructor to handle, depending on your
2. "You know, we recently had a soft drink product (an exotic berry seltzer line)
go through one of those simulated test markets, and it was a disaster. The new
products people forgot completely about the possibility that the customers who
bought the product in the shopping center pseudo stores might not actually get
around to trying it. But it happened. Based on in-store purchases, everything
11
New Products Management 11e / Crawford & Di Benedetto Part V Launch
was OK, but a good percentage of the purchasers changed their minds later;
and, if they used the product at all, it was limited trial by just one person.
Solution, of course: A sales wave test added to the end of the store test. But that
increases the cost considerably. Could you tell me when we should use the added
sales wave and when we shouldn't?"
No, there are no simplistic rules, just as there are no rules for telling when to use any of the other
probably got some bad information. It is low cost relative to the cost of the lab simulation itself,
at least for one round.
But this case is more complex than money. There should be no question about the need to
3. "I really was confused by something a corporate market researcher said in a
seminar we held last week. It concerned our industrial tubing division, which
sells extruded aluminum tubing of various smaller sizes for encasing wiring in
commercial buildings. She was recommending that they market test their new
items by going out to the customers and making what she called fakes--pretend-
ing to sell something they wouldn't have yet. This was so silly. Surely you don't
agree with her, do you? Besides, it sound dishonest to deceive potential buyers
that way."
I sure do agree with her, and this is a perfect situation for this approach. It is not clear in the
application whether the sales people just ask for predictions of purchase (speculative sale method
If the division got into new materials, or perhaps totally new ideas on encasing wiring, the
situation would be different; the buyers would want time to test the materials. But, if the supplier
there is no measure of whether the product will meet their needs (let's hope this was determined
during product use testing) or on whether they will make repeat purchases. Industrial buying of
----------------------------------------
12
New Products Management 11e / Crawford & Di Benedetto Part V Launch
Chapter 19
1. "Thanks for telling me about that launch control idea you were studying. But,
look, I'm a bit mixed up on one thing. You mentioned (1) critical events, (2)
control events, and (3) tracking variables. You say you have to list all three
things? Isn't one event likely to be on all three lists? For example, take aware-
ness of the new product's key determinant attribute. Not getting it is a critical
event, selecting it for control makes it a control event, and tracking it makes it a
tracking variable. Right? Help!"
The president is absolutely right--this factor could be on all three lists, and there is confusion in
terms.
Let's deal first with the matter of lists, and point out that the source of this confusion is in
often unactionable, so it cannot be controlled in the management sense. And, of the control
events, there will be those that cannot be tracked (by interim measurement) but only watched and
actioned when and if they come about. For example, take that competitive entry matter; the firm
may have agreed that a matching product from competitors will be bad, and will have to be
actioned, and may have the plan all set to go. But it is not tracked--it is not like awareness which
Of the critical events, we choose those we will try to control, by watching for and having
contingency plans ready for.
Of those we control, we will track only those which can be tracked--that is, that occur in
increments which can be measured.
Florida coast.
There will be critical controlled events that are not tracked--the key friend has to cancel at the
last minute. A stand-by plan is put into effect (another friend?) but there is nothing to track.
13
New Products Management 11e / Crawford & Di Benedetto Part V Launch
2. "I've had occasion several times over the past year to see a new product land
in trouble--great expectations and terrible sales. And the saddest part is that so
many people try so hard to deny the inevitable--the product has bombed, and
the quicker one gets away from it the better. Otherwise, it's just sending good
money after bad. In fact, I'm going to make a speech to that effect at our next
general executive meeting, and you could do me a favor. Would you please
develop a list of all possible reasons why someone might want to string a loser
along? That would help me be sure I've answered all of the objections before I
give the speech."
will get us going.
The product was marketed defensively and occupies a place of value even if not profitable.
3. "If I remember right, the whole idea of launch control depends partially on
having a track or plan that each variable should follow if everything is going
OK. I believe you showed me some figures with those plan lines on them. But, it
seems to me those plan lines are just pure conjecture, at least in the case of
really new products. For example, one time I was reading about Arco Solar Inc.
(a division of Atlantic Richfield). It had a solar-powered plate that could be set
on a car's dashboard and feed power to the car's battery. That power was to
make up for the natural self-discharge of a battery, the drain from electric
clocks, and so on. Now, how in the world would they know what the normal
path of awareness or trial would be? Are they unable to use launch control?
Lots of our divisions are developing really new things like that."
This one is tough, and shows the advantage of a firm that does lots of new product work and
correspondingly slow. Trial is more difficult, but if the developers used the recommended
concept tests they should have a good feel for how anxious users are for the new item.
In any event, the more tracking a firm does, the more its managers are prepared to estimate
awareness and trial on the next new item.
If an item is so totally new that none of the above (even concept testing) give a very good
14
New Products Management 11e / Crawford & Di Benedetto Part V Launch
----------------------------------------
Chapter 20
1. "The worst thing about product liability is what they call strict liability. Now,
I know it's hard to prove negligence against a typical large corporation of today,
but that's no reason to go to the other extreme and say a company is guilty when
there is no evidence it did anything wrong. We market thousands of products
involving thousands of people. Strange things are going to happen. Employees
are not robots--they make human errors. You've probably already made a
mistake or two today, yet if you were in a business, you could be sued, found
guilty, and then hit with a punitive damages ruling like a common criminal.
That's just not fair."
This is not the place to state the full case for strict liability--we have it, and we will continue to
However, there are other issues at stake. One concerns efficiency and effectiveness of
regulatory administration. Many people (in government and in business) feel that the best system
get away from long and expensive trials, no fault insurance laws provide for payment by one's
own insurance company. Most of the president's comments would apply to that too.
2. "We're currently about to market a new type of hair dryer. It's not a blower
in the usual sense--there are no wires that get hot. Instead, we have combined
two chemicals that tend to heat up if they are charged with an electrical current.
The air is directed through the wire mesh container in which these chemicals
are kept (they're solids, not liquids), and whenever there is electricity, there is
heated air. If you feel you understand the moral and legal issues of product
liability, would you please tell me what you think we should have done, and
what we should do in the future, to conform with what the public generally
expects of us and with what the law requires of us? We still have several months
before we market the new dryer, but the product specifications are frozen and
the item is currently about to be started through production."
15
New Products Management 11e / Crawford & Di Benedetto Part V Launch
This is pretty much a classic situation--a new technical product, to be used by a wide spectrum of
Careful study of the technology here--to see that it is all it appears to be. It should be pushed
well beyond expectations, to see what happens. Severe laboratory testing.
Training of all personnel in how to watch for expected problems, and what to do.
A fair warranty will also be needed.
Contact with experienced product liability lawyers for training.
3. "Two other firms I know about were less fortunate. Morton-Norwich
Products introduced Encare, a vaginal suppository contraceptive, and American
Home Products came out with a similar product called Semicid at about the
same time. Both advertised that the products were safer than IUDs and that,
unlike the "pill," they had no hormonal side effects. They called the items a safe,
medically tested, positive method of birth control, which they are. But, the
Federal Trade Commission has ruled that the firms cannot claim a comparative
advantage over other methods unless they also state that the new product is not
as effective as the others. The FTC says the only novel aspect of the new
products is the suppository form, and that has very little advantage to the
consumer. Both firms now have to distribute a new pamphlet telling the
advantages and disadvantages of all forms of birth control. All of this may be
well and good--I don't know--but the aspect that bothers me is that the two
firms were ruled responsible for telling consumers the good things about their
competitors, not just the bad. Why do you suppose the FTC ruled the way it did,
and is this a forecast of what we are all going to face? Since when am I
responsible for helping potential customers choose a competitor's product?"
This issue is a potent one in the minds of many regulators and their socially-minded supporters.
As a specific event, the case of the suppository contraceptive is now dated, but new settings arise
increase total cheese sales). But it happens the theme of this advertising was that all cheeses are
interesting--they reveal thinking that runs deep into many aspects of public policy. The logic here
is simple: Products today have gotten so complex that we can no longer trust competition to
make known to consumers everything they need to know to make intelligent decisions. This
16
New Products Management 11e / Crawford & Di Benedetto Part V Launch
presents a problem because the historic argument has been that competition takes care of this
matter--competitors tell the consumer everything that is wrong with other products. This
Reports, various Federal comparative product data reports (of which there are several),
comparative advertising, etc. They have established many offices around the country to publish
product data. They do not trust the competitive system to do the job.
All of this came to a head in the medical/health area. Letting physicians get confused
ance.
In the instance of the birth control products, we see the extension of the argument. There is
no law which requires consumer products to have fair balance, so this group of people saw a
chance to achieve better education by requiring each firm to tell the advantages of the other.
4. "When you first told me about those, what do you call them, public policy
issues, I was thinking about our health industry group. It is rapidly developing a
line of health maintenance organizations (HMOs) by acquisition, primarily, and
several by invitation of leading hospitals. They will all be in the service business,
and not-for-profit operations (they have other advantages for us), so it is pleas-
ing to think that at least this part of our corporate family won't raise public
policy issue problems. That's right, isn't it?"
In a way, yes. There is much less concern about non-profits, under the assumption that they lack
the "unpure" stimulus of profit maximization. But in fact there would be no difference. If these
needles and the like show up in public waters); HMOs that buy land to build buildings and put
up big parking lots that create water run-off problems.
The real issue in this application is, should HMOs come under scrutiny, and be held to the
17
New Products Management 11e / Crawford & Di Benedetto Part V Launch
18
