Friday, May 11, 2007

New Product Launches - Does This Sound Familiar?

In my last post, I looked at the huge issues that companies face in New Product Launches. Today I wanted to look some of the common issues that occur during the launch.

Let’s start at the beginning…

We’ve seen it so often before. At a monthly meeting, marketing turn up to brief the sales representatives on the latest new line. The salespeople are furnished with some brochures (occasionally), numbers about advertising spend and samples to help sell the line. They might get to view the relevant media, but the marketing collateral/POS might not arrive in most markets for a couple of weeks.

The real clincher though is the ‘deals’ offered to close the sale.

Then in the trade, the conversation will go like this….

“I’ve got a new line to show you…” - Buyer typically rolls eyes and mutters obscenities about out-of-date/seasonal lines that didn’t work either.

It…” - You fill in the gaps here. Generally a description of the vast list of features and characteristics offered by marketing. Sometimes accompanied by some pictures and charts.

“It’s a great product, you should try it…”. - Of course we’re going to say that. It wasn’t likely to get through R&D and consumer trials if it isn’t a great product.

“We’re spending $5 million on advertising” - Better, but what happens after advertising slows? What needs to be done at this location to maxise ongoing sell through?

Buyer interjects with an objection or two…

“No Space…” or “It didn’t work last time…” or “Too much stock” or “Won’t work here” or “Too many variants” or even “I’ll stock it when they ask for it”

Salesperson responds to each in turn, eventually resorting to…

“I can offer you a great deal…” - Typically a winner. But, what has happened to the brand? Retailers need stock. How committed is the retailer to a line that cost them little to range? If its cheap enough, they’ll try anything.

Result: Buyer ranges new line, at the minimum stock level. Display is good, but not outstanding. Trade spend increases. Both parties expect that the line will be specialled out within 6 months.

Fast forward a couple of weeks to where we find that the constant exposure to standard objections sees our salesperson more adept at putting their case – if only to the benefit of shorter call time and better coverage in their territory.

Assuming that the call cycles have been set to target your top 20% accounts first, the additional issue here is that your sales people have been practicing on those accounts that matter most. Hence a scenario that severely risks their volume sell in and ability to negotiate effective sell through strategies.

In my next post I'll be looking at what you can do to gain greater traction of new product in the market.

Jason Wenn

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