new product marketing: market entry strategies....a new look at first movers and fast seconds!

Bryan Cassady Guest Professor, Bryan@fast-bridge.com

KU Leuven Master Class: New Product Marketing7/11 Market timing First vs Fast seconds

Market Entry strategiesLemmings…

A new look at first movers and fast seconds…

About this courseIt is a sad fact that most new businesses, products and service fail. Some estimate the failure rate is as high as 90%. This course is about why products fail and what you can do to increase your odds of success.

This lecture is a part of series of 12 lectures. In my classes I use a lot of videos. If you’d like to see the presentations with videos, go to: http://www.fast-bridge.net/resources/new-product-marketing/

I hope in the pages that follow you will find new ideas and inspiration… If you’d like to download the whole class go to: http://www.slideshare.net/bryancassady2/2009-course-new-product-management-by-bryan-cassady

If you have ideas on ways to improve this course or would like help with your new products, I’d love to here from you…

Bryan Cassady bryan@fast-bridge.com +32-475-860-757

A less-than-optimal "configuration" of product or service attributes and benefits is selected.

Lack of a strong sustainable position in the market

Marketers fall in love with a product no one else loves

The marketing plan for the new product or service is not well implemented in the real world.

Marketers assess the marketing climate inadequately.

The plan is too complicated

A failure to ask the right questions and a belief that everything is a big idea

No Support to get things done

A questionable pricing strategy is implemented. A weak positioning strategy is used.

Cannibalization underestimatedThe advertising campaign generates an insufficient level of new product/new service awareness.

Over-optimism about the marketing plan leads to a forecast that cannot be sustained in the real world.

Too focused on the internal game not enough on the market

The Lemming effect

% passers bythat joined

15 45%

30 80%

Social Proof: the tendency to assume that if a lot of people are doing something or believing something there must be a good reason why

One bad decision, can lead to lots of bad decisions…

Revenues Profit Value

1995 0.00 0.00 0.15

1997 0.01 0.00 100

1998 150 -30 250

April 8, 1999 (morning) 108 -56 1045

April 8, 1999 (mid day) 108 -56 3316

April 8,1999 (close) 108 -56 2498

Aug – 99 140 -124 681

Nov – 99 240 -124 681

Jun – 00 ??? ??? 2

A small idea

Shameless copycats

Group Think

Gotta be first

The great Tulip crisis

The US plank road bonanza

Bowling in the 60s

Historical Examples

Social networking and blogs ?

The US Dollar ?

Source of the technology change

Advantage in technological development activity

Advantage in skills

The diffusion rate of technological information

Consumer involvement in the product

Ability to define competitive rules

Reputation advantage

Ability to preempt and make it stick

Switching costs

Position on the learning curve

Superior access to channels and to inputs

Ability to define industry standard

A higher share of the consumers mind

Non-proprietary pioneering costs

Demand & technology uncertainty

Threat of obsolescence and/or imitation

2 lab tests over time

Repeated Exposure to Pioneer

Pioneer

2nd Entrance

3nd Entrance

Session 3Session 2

Probability of choice

Session 2 Session 3

Pioneer

2nd Entrance

3nd Entrance

Recall of UniqueFeatures

Session 2 Session 3

Pioneer

2nd Entrance

3nd Entrance

Recall of SharedFeatures

2 lab tests over time

Before any change can occur. We need to conceptualize change Hypotheses are the concepts of change.Note: self-inflicted search biases “I’ll see it when I believe it’

Before learning can occur. Evidence needs to be received(1) Familiarity influences what is seen(2) Law of small numbers… I have enough info(3) Sequential vs. side by side learning (Framing issues)

Information received needs to be encodedPrior knowledge, Expectations Selection of evidence & meaning(s) attached Bottom-up : Data driven (e.g. Tasting) or Top-down concept driven (e.g. how a brand name influences taste)Consumers likely to see what they expect to seeMight not be motivated to accommodate discrepant evidence Reinterpretation so it fits, or explain it away as an exception

Integration = new beliefsCognitive conservatism: A tendency to accept confirmation and reject disconfirmationMixed messages polarized views

How motivated are consumers to learn?

What do consumers already know?

How much can experience teach?

Most consumer products hereHence, the logic of first movers…

Experience can be ManagedHard to manage

Product dependent

Block exposure to evidenceShow risks of experimentationKelloggs: Value of the brand you knowIt’s as good as Xerox

Explain the Experience: Heinz Anticipation, Thomas muffins: nooks taste betterReinforce the agenda: Budweiser beachwood aged, Lays: bet you can’t eat just one

Ryder: your brother in lay, pay too much or Ryder (Uhaul left off the list)

Virtually any comparison with top dog willBuild credibility and imageEg. Pepsi Challenge: let your taste decide

Disrupt the Agenda / change the rulesThe beer for good friends: Weekends are for Michelob

Build Trial

“Nobody ever gotfired for buying IBM”

Reinforcing the Agenda

Oral: Questions on work, no written Qs on class

No difference

INNOVATOR FOLLOWER WINNE

Consumers

Established Market (USA)

New Market (Belgium)

Product Features Focused Selection Wide Selection

Message A new way to save $ A better way to shop

Note: A few more details would be nice.....

Your Class ID Number :

Strongly Disagree

Disagree Somewhat

Neither Disagree nor

Agree Somewhat

Strongly Agree

Goals: We have clear performance objectives

1 2 3 4 5

Climate: The atmosphere is informal & relaxed.

1 2 3 4 5

Roles: Everyone is clear about what is expected of them on the team.

1 2 3 4 5

Participation: Everyone participates in team discussions and decisions.

1 2 3 4 5

Communication: Members feel free to express themselves all on

1 2 3 4 5

Meetings: Team meetings are well planned and carried out.

1 2 3 4 5

Conflict: Disagreements among team members are resolved quickly & effectively.

1 2 3 4 5

Score:

The rest of today’s class

Working together in groups

“Coming together is a beginning.

Keeping together is progress.

Working together is success.”- Henry Ford

“I will pay more for the ability to deal with people than any other ability under the sun.”

– John D. Rockefeller

new product marketing: market entry strategies....a new look at first movers and fast seconds!

bryan cassady guest

new product marketing

new products

new ideas

new look

new businesses

marketing plan

market marketers

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