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Marketing Basics - Kotler Philip

Commercial deployment

Tests in market conditions give management sufficient information to make the final decision on the feasibility of releasing a new product. If the company begins to deploy commercial production , it will face high costs. We'll have to build or rent a whole production complex. In addition, it may need, as in the case of packaged consumer goods, to spend from 10 to 50 million dollars during the first year alone to advertise and promote the sale of new items.

When entering the market with a new product, the company must decide when, where, to whom and how to offer it.

WHEN . The first should decide on the timely release of new products on the market. If the electric car will undermine the sale of other models of the company, it may be better to postpone its release4. If additional improvements can be made to the design of the electric car, maybe the company will prefer to enter the market with it next year. The firm will probably want to wait in those cases when the economy is in a state of stagnation.

WHERE . The firm must decide whether to release the product on the market in any one locality or one region, in several regions, nationwide or internationally. Not all firms have the confidence, means and ability to enter the national market immediately with new products. Usually they set a timeline for sequential market development. In particular, small firms choose an attractive city for themselves and conduct a blitz campaign to enter its market. Then, in the same way, markets of other cities are developed one after another. Large firms release a novelty first on the markets of one region, then another. Firms with nationwide distribution networks, such as automobile corporations, often launch their new models directly on the nationwide market.

To whom . In a group of consecutively explored markets, the company must choose the most profitable and its main efforts to stimulate sales focus on them. At the same time, it is likely that, using the test data of new items in market conditions, the company has already compiled for itself profiles of the most important market segments. Ideally, the primary segments of the market for consumer goods should have four characteristics5: 1) consist of early followers, 2) these early followers should be active consumers, 3) they should be opinion leaders and speak favorably about the product, 4) they should be accessible to Coverage at a low cost.

HOW . The company must develop an action plan for the consistent introduction of new products to the markets. It is necessary to make estimates for the day of the various elements of the marketing mix and other events. So, the launch of the electric car on the market may be preceded by a propaganda campaign, which is carried out immediately after the car enters the showrooms, and at the same time souvenirs can be offered to attract as many visitors as possible. For each new market, a firm must develop a separate marketing plan.