Think you know what it takes to successfully introduce a new product in today’s tough market?
Well, according to Tom Marx, president and CEO of The Marx Group, who moderated the 2009 SEMA Show webinar entitled “Product Launches: What You Must and Must Not Do,” every product launch should start with “The Six Ps”: Plan, Product, Pricing, Placement, Promotion and Participation.
Members of the industry that participated in the webinar included Cam Benty, marketing director of Flowmaster; Ron Coleman, president of Competition Cams; and Marla Moore, marketing director of Hypertech.
The following plan can help any shop or hot rod business looking to launch a new product in the near future.
The Six Ps
First, begin with a well-researched plan that determines what the market desires in a product.
“Follow with the ready, aim, fire philosophy by first coming up with the plan and then strategy before going into the actual launch,” Marx suggested. “What are the attributes of your product? Look at the costs and decide whether you need certifications and testing. Look at the packaging. When it comes to pricing, which channels are you selling to? Are you developing enough of a margin in those channels so each one can make a profit?”
After the product phase, perform a competitive pricing analysis to learn how similar products in the market are priced.
The next step is placement, which focuses on how you plan to distribute the product.
Both the sales and customer service teams must be trained so they can speak eloquently and accurately about the product’s technical and installation attributes. When promoting a new product, oftentimes the marketing, technical and salespeople work separately, which results in a lack of coordination and communication between the departments. It’s important these people work together by focusing on what must be done to successfully bring the product to market.
Finally, participation is based on getting feedback from the field so if installation issues or technical challenges arise they can be answered quickly. This can be accomplished via social networking sites such as LinkedIn, Facebook and MySEMA.
Remember Where You Came From
One of the key ingredients of a product launch is don’t forget your core competency and lose sight of the products that got you to your current success level, according to Benty.
Flowmaster’s original muffler was successful because it attacked problems surrounding sound limitation for racers. The ideal scenario was to get below that level with no loss of power.
Flowmaster has a variety of products each with different attributes. Through extensive R&D the company found there was more need for a louder product that was aggressive on the street.
“Our concern was if we came out with yet another loud muffler, what would happen to the situation surrounding some of our other products? When we started with our Super 44 two-chamber mufflers we looked at technology. Was this product going to be innovative? Would it work with our program? We talked to racers in the market to gauge interest and determine whether the product was different enough from already-existing products,” Benty said.
In the beginning, to help promote the product, Flowmaster gave it away to its online forum users and collected customer testimonials to solicit interest and enthusiasm.
Then the company took the product to its dealers and warehouse distributors to obtain their feedback and slowly rolled it out to target markets.
Flowmaster also tested different types of advertising strategies by noticing what competitors were doing and filling voids within that area.
For example, magazine product placements enabled the product to be seen by potential customers on a regular basis.
The company also assessed its sales after the initial rollout to see how the product was doing in the market.
Get Marketing Involved From the Beginning
Include your marketing department from the beginning to help guide R&D in the right direction, Coleman suggested.
In the past, Competition Cams had launched products that didn’t work possibly because the R&D department was too deeply involved and marketing wasn’t involved soon enough.
“Rule No. 1: You can’t make chicken soup with chicken manure,” Coleman said. “If you start with a bad product it doesn’t matter how well you launch it, how much money you spend or how you package it. Consider what problem this particular product solves. If you can’t answer that question then you’ve got a bad product.”
Rule No. 2: Ask everyone involved-from the secretary to the consumer and R&D-how the product is unique, better and different and expect a different answer from everyone because people don’t always see things the same way as you. Don’t just get one perspective because if you don’t get everyone’s opinion you’re going to miss something important. Take the best of all those answers and utilize them for the product launch.
Rule No. 3: Pretend you’re not an expert and tell people about the product in simple, straightforward talk. Explain what you’re doing in layman’s terms.
Rule No. 4: It’s ok to make a mistake but it’s stupid not to learn from it. Tweak things as soon as you discover you’ve missed the target.
Determine Market Need
This year Hypertech is introducing its Max Energy sport power programmer for the sport-tuner market because there’s a market need and not many competitors. This enables the company to set its minimum advertised price hundreds of dollars below the existing competition, according to Moore.
To promote the product, Hypertech did a video promo, put together press kits, booth graphics and sales agreements in time for the 2009 SEMA Show.
The company also plans to utilize the Internet through e-mail campaigns, social media outlets and YouTube.
“If you don’t have your product line in place and ready to ship within a few weeks after SEMA, pull the plug on the launch date. It can ruin your product before you ever get it to market,” Moore suggested.
Story courtesy of SEMA eNews.