product launch & commercialization

7/27/2019 Product Launch & Commercialization

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Product Launch &

Commercialization: Innovation andAdoption Process

Product Life Cycle

MK3A Group 1

Albia Almoro

Alumia Alviar

Arabit



What is Product Launch?

• It is the debut of a product into the market.

• The product launch signifies the point at

which consumers first have access to a new

product.



Commercialization

• “Commerce”

• To apply methods of business to gain profit



Innovation

• Application of new solutions that meet newrequirements or needs of the target market

• Accomplished through more effectiveproducts, processes, services, technologies orideas

• Something original and new that “breaks in

to” the market or into society



Types of Innovation

• Transformational

– Most difficult because it changes the lifestyle of

the people

– One of the reasons why some businesses fail

– Examples: computer and entertainment

electronics industry



Examples of Transformational



Incremental Innovation

• Focuses on the kind of improvement that keepa product or brand or company in the industry

• Line or brand extensions, new packaging, newimproved ingredients

• 60% of innovations claimed by the consumerproducts industry were nothing more thanpackaging improvements



Incremental Innovation requires:

• Multi-disciplined, cross-functional

collaboration

• Strong, definable metrics at each decision-

making point

• Consensus-based decision making between

multiple stakeholder functions



Incremental Innovation requires:

• Internal competition for people, money, andoperational resources, such as: – R&D

– Packaging development

– Qualitative and quantitative market research – The interruption of production lines for short, unprofitable

test market runs

– Distribution channel support in small test marketgeographies where channel competition is fierce enough

for the established brands (who has the bandwidth to pushthe new ones [sales] or hear about them [buyers]?)

– Promotional and advertising development



Examples of Incremental Innovation



Breakthrough

• Falls between incremental andtransformational on the innovation spectrum

• It requires significant change on the part of the innovating organization, both in terms of cultural and systems support.

• Breakthrough ideas create new markets andbusiness opportunities that did not existbefore.



Examples of Breakthrough



Adoption Process



Definition

• An individual process detailing the series of

stages one undergoes from first hearing about

a product to finally adopting it.



Five Stages of the Adoption Process

1. Knowledge

•

Individual is exposed to an innovation butlacks information about it

• Individual has not been inspired to find more

information about the innovation




2. Persuasion

•

Individual is interested in the innovation• Individual actively seeks information/detail

about the innovation




3. Decision

•

Individual takes the concept of the changeand weighs the advantages/disadvantages of

using the innovation

• Individual decides whether to adopt or reject

the innovation




4. Implementation

•

Individual employs the innovation to avarying degree depending on the situation

• Individual determines the usefulness of the

innovation and may search for further

information about it




5. Confirmation

•

Individual finalizes his decision to continueusing the innovation

• This stage is both intrapersonal and

interpersonal.



Adopter Categories

• Classification of individuals within a social

system on the basis of innovativeness



Adopter Categories

1. Innovators

- Willing to take risks

- Youngest in age- Highest social class

- Have great financial liquidity

- Have closest contact to scientific sources andinteraction with other innovators



Adopter Categories

2. Early Adopters

- Second fastest category who adopt an

innovation

- Have the highest degree of opinion

leadership among the others

- Typically younger in age, have higher social

status, advanced education and more socially

forward than late adopters



Adopter Categories

3. Early Majority

- Adopt an innovation after a varying degree of

time

- Tend to be slower in the adoption process

- Have above average social status

- Seldom hold positions of opinion leadershipin a system



Adopter Categories

4. Late Majority

- Adopt an innovation after the average

member of the society

- Approach an innovation with a high degree

of skepticism

- Have below average social status, very little

financial lucidity, very little opinion

leadership



Adopter Categories

5. Laggards

- The last to adopt an innovation

- Show little to no opinion leadership- Tend to be advanced in age

- Tend to be focused on “traditions”

- Have lowest social status, lowest financialfluidity, in contact with only family and close

friends



PRODUCT LIFE

CYCLE



INTRODUCTION STAGE:

• Period slow sales growth.

•

Profits are not existent.

• Expenses.

• Product are introduced.



Example: New Flavor of Pepsi

• Pepsi bottles the new flavoured product and

places it on the market for consumers.

• Pepsi also spends a lot of money advertising

the new flavor creating awareness.



GROWTH STAGE:

• High sales.

•

Some product may be FAD.




• Customers like the flavor and begin to make

routine purchases.

• Coke introduces their competing flavor.



MATURITY STAGE:

• Slow sales growth because the market’s needs

are satisfied.

• They are looking for new products.

•

Reached maximum level of sales.




• More competitors enter the market taking

some of Pepsi’s profits.



DECLINE STAGE:

• Sales fall off and profits drop.

• Death stage of the product.



EXAMPLE: New Flavor of Pepsi

• Customers have moved on to the next new

flavor.

• Some loyal fans stay behind.

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