Alexey Khobot with insights on how to significantly decrease uncertainty associated with a product launch
Launch of a new product usually deals with high risks and a high degree of uncertainty. Therefore, it is really important to plan launch preparations step-by-step. These types of plans include various aspects in different functional areas from IT-development to Marketing. Fonbet Chief Expert Alexey Khobot states that it requires preparations of products` concept and modifications, detailed list of tasks and ussies, its prioritization and distribution by performers.
The main points, which can help to prepare for the launch of a new product basically consist of:
- Company purpose and value proposition
- Consumer insights and GAP analysis
- Solution we provide
- Market sizing and sales forecast
- Competitive contest and barriers of adoption
- Market roll-out
Company purpose and value proposition
The first point deals with the common value proposition and the basic concept of the product. So, first of all, a company has to find the answers to the following questions: who are a company and a project team? What are they doing? Who is the target audience of the product? How can the product satisfy their needs? What are the main features of the product? What is the price?
According to Alexey Khobot this step can help to understand better main points about the product itself and its main advantages for the clients.
Consumer insides and GAP-analysis
We can find consumers` insights through the different methods of quantitative research such as interviews, focus groups, etc. To confirm the static significance of the obtained insights can be used quantitative methods, for example, a survey. They allow you to check the significance of a “pain” statements, which were found during the interviews and focus-groups. In this case, “pain” means the problem to be solved, according to the Pain-Gain method.
The second important instrument here is GAP-analysis. It can help to find free fields on the market, based on the competitors` analysis. As a result, we will get one or two potential targets and according to these targets, we can find the optimal price or positioning for the new product. Also to make it clear, some combination of factors in empty spaces is not beneficial like high price and low-quality products. If there are no free spaces or the company does not satisfy it, we can place a new product in other districts, which are not free. In this case, as Alexey Khobot says, we have to think of how to differentiate the product from similar products and which competitor advantages do we have.
Solution we provide
According to the information found in the previous steps, we can create the basic concept of a new product and describe its main features. At this point we also use the “pain-gain” method: new products have to be based on the needs and wants of customers and provide some kind of additional value for potential clients.
Also we have to think about realization, technological platform and IT-software. Nowadays these aspects are an essential part of any kind of business. So, Alexey Khobot states that commercial success depends on IT-solution a lot.
Do not forget about the market trends and modern design solutions, because they can make the product more attractive to clients and make its usage more comfortable and user-friendly.
Market sizing and Sales Forecast
The financial part is also a very important factor for a new product launch. First of all, as Alexey Khobot advises, you have to analyze the current situation on the market and to compare all of the possible markets to enter. The main criteria of comparison are:
- Governmental politics;
- Number of potential clients;
- Average salaries per family;
- Level of competition, etc.
Of course, this list can vary from idea to idea, but the common aspects are usually the same.
Revenue modeling and budgeting for 1-3 next years are of great importance for several reasons. Firstly, it will make you aware of how much investment you need to launch the product. It is an important factor if we are going to attract investment from external sources, such as crowdfunding platforms of venture investors. Secondly, it can prevent extra expenses. Thirdly, it can help to set the correct price, which is acceptable for the company. Moreover, Alexey Khobot suggests focusing on the revenue part as well: revenue modeling, payback period (when costs will be fully covered and new product will bring profits), etc.
Payback period and profit forecast are really important for investors because they tend to make the final decision based on this information.
Competitive context and barriers of adoption
This part focuses on two main directions. The first deals with the competitors: find out who are the main competitors in your field, their market shares and positions on the market. Use the Herfindahl–Hirschman Index or Concentration Ratio to understand the level of monopolization on the market. The second direction is the customers. It is really important to understand the target audience: who are they? what are they buying? how do they act in different situations? All these questions can help to find out one or several segments of the customers, whose potentially will be interested in a new product. Moreover, you can make a target persona description to make it more simple and clear. It is a portrait of the customer, a real person, which represents the main and the most common characteristics of the target segment.
Based on the information about the competitors and target segments create product positioning.
Positioning is the marketing task of determining the place of a new product in the minds of consumers. Development of the marketing positioning is an activity aimed at the special presentation of goods to the consumer, which differs from competitors. It is a really important step of developing new product, because it determines launch success a lot: right positioning can help create high level of awareness of the a new product and make customers want to buy, because of its exceptional benefits.
Another important aspect is path-to-purchase. It includes several points of consumer behavior, for example where and when clients can buy a new product or where they can use it. This can be used to create a delivery strategy and expanding strategy as well.
While developing a new product we usually have to think ahead. A product itself can be great but a market specific can ruin everything. That is why we have to identify the main barriers of adoption, which usually deals with relative advantages, compatibility with related products and platforms, perception of difficulty to use, an opportunity to try for free, etc.
The launch of a new product on the market is usually associated with a number of external processes that are not directly related to the product itself, but are of great importance for customers. For example, available payment methods, ways of obtaining the product, the possibility of training or solving problems that may arise during the usage period. Therefore, we have to think about the payment systems, delivery strategy, support channels and other aspects.
On the other hand, market rollout also deals with a promotion strategy, which also includes a list of promotional tools, measurement of results and evaluation of promotion effectiveness. Alexey Khobot urges not to forget that the marketing part is much more than just the attraction of the clients and awareness creation. There are a lot of marketing models, which show the customer journey after gaining the awareness of the product, such as ATAR, AIDA and others.
Let's look at the particular example of Marketing Tunnel, which include next levels:
Each level involves a special set of marketing activities to retain customers.After marketing activities were organized, it is necessary to measure the results and calculate conversion rates, which show the number/percentage of clients moved from one level to another. And one of the main aspects here is a financial one: did we spend money on the right tools of promotion? Some of the most popular metrics here are Cost per Click (CPC), Cost per Action (CPA), Cost of Contact, etc.
And the last point in our list is a risk analysis. It is the King of management activity, which consists of several stages of scientific research, the purpose of which is to determine the exact, risk characteristics and validity. Risk analysis also implies the existence of effective measures to reduce identified risks.
The main two steps, which risk analysis include, are:
- Risk identification and valuation;
- Risk management
The first stage involves the identification of possible risks, calculation of the risks probabilities, estimation of the possible damage and an overall assessment of the risks. The second stage deals with creation of the specific measures to reduce the likelihood of risks and development of the plan with the particular actions in case of risk to minimize the negative consequences.
According to the previous information, we can see that developing a new product is a very complicated process, which deals with hundreds of tasks and business processes. The plan above provides a clear structure, which can help to simplify the stage of pre-launch, but it does not guarantee the success. However, according to Alexey Khobot, following those steps can significantly decrease the uncertainty associated with a product launch and prepare you for all the hidden difficulties you may face.
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