Growth

Growth

New Product Launch or Market Expansion?

Test Ahead of Launching


There is no market entry or expansion with limited or no market research.

No service or product launch either. Nevertheless, many continue to rely on luck and enter new markets with little or no analysis and planning.

19 Jan. 2021  \\ Growth                              Author: Patrycja Maksymowicz

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As Harvard Business School professor Clayton Christensen says, "more than 30,000 new products are introduced every year and 95% fail." 


Many factors can lead to the failure of new products or new market entrants. Most often it is the lack of adequacy between products and the market as a result of the lack of preparation.


Addressing interesting problems to be solved instead of focusing on those which really meet a market need is often the primary reason for failure.


We regularly receive enquiries from companies and startups interested in entering the market and over the years we have learned that many are quite ignorant when they try to launch their ground-breaking solutions.

When asked what supports their claims that their excellent service or innovative idea would sell, there is often little evidence and no research to support it.


The biggest mistake companies make is that they start investing time and money without really understanding what the customer is looking for and needs. Introducing a product into a new market based on assumptions will lead to unsuccessful attempts and wasted resources. 


Is the problem you are solving large enough for other people to pay for it? 

 

Founders usually attempt to address the problem they have identified in their own lives. The fundamental question is whether other people have that problem and whether it is a big enough problem for them to be prepared to pay to get this new solution. Founders often believe that if they build and launch their solutions, customers will come. Nothing could be further from the truth. 


42% of founders and innovators grow products people don't want. Most are very persistent, and even after years of attempts, they're still in denial and not ready to review the strategy or the offering. 


The point is that if you don't have enough evidence to go forward, you could be wasting time and money. It can be painful to hear divergent views, but not as painful and expensive as launching something doomed to failure. 


Identifying your target client groups is paramount. That's how you find out if your idea's got legs. When’s the best time to do it? The earlier the better. 

It is important to be inquisitive and ask the right questions of the right people.

You don't want to skew your search results, so you need to take the buyer's perspective. The actual answers you are looking for are not in what you want to hear, and the key is to be open to constructive criticism and direct feedback.


Release your product too early, users will write it off as not good enough. Getting them back may be difficult if their first impression of you is negative.

Ignoring users is one proven means to fail. Tunnel vision and not gathering user feedback are fatal flaws for many.


A technology firm specialising in educational software was working on an AR application game. The game offered little or no engagement, its design seemed to be lacking, and somehow their developers seemed to have struggled to level it up above the basic features. The company wanted to put its brand on the AR technology map quickly and introduced an unfinished product to the app store. There were few downloads and not a lot of interest for any of their subsequent products later on.


Some businesses rush with an incomplete product, others try to launch products that no one understands or knows how to use.  


Consumers often fail to quickly grasp how to use products if it defines a brand new category and requires substantial consumer education. 

That does not necessarily mean the need to simplify the solution (unless necessary), yet it shows the necessity to educate and prepare your audience, in as simple terms as possible, how to use it and what value it brings.


Market readiness is more prevalent than you think. In recent years, we have had more inquiries to support businesses that have tried and failed than those that wanted to be right the first time.  


Our experience to date shows that the preparation phase is often overlooked by brands in Central and Eastern Europe in particular. More than 30% of these businesses felt their brand was ready when it was way too early in the game for them to embrace the challenge. 


According to Dr Max Mckeown, 'your greatest success will come in strategic responses to unforeseen opportunities.' There is no such thing as bad feedback. There are opportunities in every challenge. Strategic decisions are not accidental; they can help you shape the competitive environment. 


And what happens once you launch? It's still a hillside road. 


Even well-known brands are not guaranteed success in the long run without regular reviews.


Products that start from a strong position can have difficulty maintaining success. 


In 2011, a global FMCG manufacturer had to reconsider its marketing strategy to increase its sales in the EU market. Their direct competitor was outselling them although their products were comparable in quality. Yet, for whatever reason, the competitor was more successful. Weeks of interviews were required to identify key points that may have influenced purchasing choices. Only then, and after a careful analysis of the findings they were ready to review the way they presented and promoted the products, design and launch brand new campaigns that significantly increased the sales, and left the rival behind.


Strategy is not something you do once and then keep going forever. 

To ensure growth, you must continually examine it to ensure that it adapts to each step. 

Continue with regular decision points as you progress forward. Force yourself to examine the value you want to offer your clients and make sure you have evidence to support it.


Constant assessment at every stage of the cycle will keep you on your guard, ensuring you are always moving in the right direction and not wasting your resources.


Businesses are often driven by a false belief that their first sales will be by sheer coincidence. They believe that their customers will just fall in love with their brand and that it will be love at first sight and for good and for worse.  


There is no proverbial low-hanging fruit out there, and you have to be prepared to invest both time and resources first in order to get anything out.


Rapid success is exceedingly uncommon. 







Some questions that we invite our customers to ask themselves: 


  • What is your current strategic plan to increase your clients, revenues and profits? What are the barriers?
  • What is your approach to generating sales and what specific actions should you take? 
  • Do you know how much must you invest to get there? Is that the amount you're prepared to put into it? Are you willing to make more investments if necessary? 
  • Why are existing products not popular with non-customers? 
  • How might your new or upgraded product attract them? How can the assumptions of existing products be reversed or altered to benefit non-clients? 

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