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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
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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.
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Commercialization
• “Commerce”
• To apply methods of business to gain profit
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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
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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
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Examples of Transformational
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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
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Incremental Innovation requires:
• Multi-disciplined, cross-functional
collaboration
• Strong, definable metrics at each decision-
making point
• Consensus-based decision making between
multiple stakeholder functions
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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
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Examples of Incremental Innovation
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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.
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Examples of Breakthrough
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Adoption Process
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Definition
• An individual process detailing the series of
stages one undergoes from first hearing about
a product to finally adopting it.
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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
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Five Stages of the Adoption Process
2. Persuasion
•
Individual is interested in the innovation• Individual actively seeks information/detail
about the innovation
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Five Stages of the Adoption Process
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
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Five Stages of the Adoption Process
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
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Five Stages of the Adoption Process
5. Confirmation
•
Individual finalizes his decision to continueusing the innovation
• This stage is both intrapersonal and
interpersonal.
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Adopter Categories
• Classification of individuals within a social
system on the basis of innovativeness
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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
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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
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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
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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
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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
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PRODUCT LIFE
CYCLE
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INTRODUCTION STAGE:
• Period slow sales growth.
•
Profits are not existent.
• Expenses.
• Product are introduced.
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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.
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GROWTH STAGE:
• High sales.
•
Some product may be FAD.
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Example: New Flavor of Pepsi
• Customers like the flavor and begin to make
routine purchases.
• Coke introduces their competing flavor.
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MATURITY STAGE:
• Slow sales growth because the market’s needs
are satisfied.
• They are looking for new products.
•
Reached maximum level of sales.
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Example: New Flavor of Pepsi
• More competitors enter the market taking
some of Pepsi’s profits.
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DECLINE STAGE:
• Sales fall off and profits drop.
• Death stage of the product.
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EXAMPLE: New Flavor of Pepsi
• Customers have moved on to the next new
flavor.
• Some loyal fans stay behind.