Product Launch

The launch of a new product into industry needs to take consider different factors for the pre-launch, launch and post-launch stages.  This article tries to highlight some of the questions that might be discussed in a chronological format:

Procedure:

1. Create Alignment: Clarify with the questioner what the product/service is.
   1. Explain the goal of the product e.g. to prove that concept X is viable.
2. Determine a Successful Launch: What factors will you track to see whether the launch of the product is successful. Some example metrics that could be used to measure performance are:
   1. The churn rate of customers.
   2. Sales figures (e.g. total spent per customer).
   3. Time spent using the product.
   4. Number of transactions completed.
   These metrics can be compared against an existing competitor in the industry or against a previous version of the product being rolled out e.g. A/B testing.
3. Pre-Launch Stage:
   1. Who are the intended users of the product? e.g. early tech adopters, families etc. why has this group been chosen?
   2. Assess the location/platform for launching the product and justify your choice. Has market size been considered?
   3. Raise Awareness of the launch e.g. launch event, discounting, advertising, partnerships.
   4. Assess the risks of the launch – What happens if turnout is too low? Are there options to pivot? Has the infrastructure been setup to handle the expected traffic? What happens in the event of a technical fault?
4. Launch Stage:
   1. Determine the pricing strategy you want to use:
      1. Cost-plus pricing vs Value-based pricing.
   2. Establish a market price (in brief):
      1. Segment the market – By region, user groups and market size.
      2. Define value proposition for each market identified.
      3. Assess external pressures (PESTLE, SWOT).
      4. Assess the strategic goals of the company.
      5. Define the price model based on the above.
5. Post Launch Stage:
   1. Assess the metrics that were tracked during the launch.
   2. Gather feedback from users.
6. Summarise the Strategy: Reiterate what you have outlined above with a brief summary.

 Example:

How would you launch a last-mile drone delivery service?

1. Create Alignment.

   • A: My understanding of this service is it provides an automated package delivery service from a central warehouse/hub to a persons home/office in a 'Spoke-Hub' model.

     A: The goal of launching this service is to prove that an automated delivery service is viable. This can be achieved by providing a better service (reduced delivery time, lower cost etc.) than a traditional automobile based service.

     Q: I am satisfied with this assumption, proceed with the question.

2. Determine a Successful Launch.

   • A: The metrics that I want to track for the launch of this product are:

     • Time of delivery: Does the service provide a faster time to door then a traditional delivery service?
     • Number of orders: Does the service increase the number of orders from existing customers? Is there an increase in the number of same day deliveries requested?
     • Total Spent: Does the service increase the average amount spent from existing customers?
3. Pre-Launch Stage.

   • A: Some of the factors that need to be considered during pre-launch are:

     • The intended market of this service will be early tech adopters and people with an interest in the efficiency increase/time-savings of the delivery service.
     • The service should be trialed in a small to medium sized city with a strong tech culture. This will ensure that their is a critical mass of people who are willing to trial the service. It won’t overstretch the capabilities of the service either as a large city may make delivery logistics more challenging.
     • Partnerships with local businesses to deliver products could create a positive image of the company in the chosen city. A launch event that showcases the technical capabilities of the drones could demonstrate providie positive publicity as well.
     • A poor reception of the service in the chosen trial city could require the service to be pivoted to another city. A strong demand in the service on launch could lead to poor customer satisfaction if the infrastructure cannot keep up with demand. Customers should be informed of an expected delay when using the service at peak times and that it is a trial version.
4. Launch Stage.

   • A: Some of the factors that need to be considered during launch are:

     • I think that the best pricing strategy for this service would be Cost Plus. This is because we are trying to provide a service with a reduced delivery time while at a competitive price. Since the cost of delivery is independent of the product that is being sold, customers might be less willing to use the service if the delivery cost is substantially high. However, a value-based pricing strategy could set the delivery cost at a higher rate compared to an automobile service to reflect the faster delivery time.
     • This part requires extensive detail for a complete analysis. I have decided to omit it from the post to keep the solution brief. Market/user group segmentation has been done in previous product questions and examples of SWOT/PESTLE can be found online.
5. Post Launch Stage

   • A: This discussion would be relevant if example data was included as part of the question.

6. Summarise the Strategy
   
   • A: Overall, I propose that the drone delivery service is rolled out into a small/medium sized city with a strong tech culture. The success of the launch will be assessed through customer feedback on the service, the change in the number of deliveries (and the total spent) for each customer when compared to an automobile delivery service. Another important factor would be the average time that the service takes. I have chosen to employ a cost-plus pricing strategy as the service needs to be competitive against automobiles and I believe a lower cost will be the main factor when considering two delivery services.