A Product Launch Strategy Will Ensure You Maximise Your Sales Opportunities
The next time you launch a new product make sure it sells well from the first day you launch it – don’t trust to luck.
To ensure this happens you need to have a strategy for your product launch and a plan for the actions you’ll need to take to make sure you grab the attention of your prospective customers.
If you don’t have a proper strategy (or any strategy!) there’s every chance that you’ll spend a lot of money and time on marketing and selling and not have much to show for it.
It’s probable that even if you haven’t a strategy and a plan you’ll eventually start making some sales of your new product, but you will almost certainly have missed out on early sales opportunities and probably lost sales to competitors. You need to make sure this doesn’t happen.
What’s a 4P’s Marketing Strategy?
There are lots of different ways of developing a marketing strategy, but one of the simplest is the 4P’s Marketing Strategy approach.
The 4P’s Strategy approach was developed by E. Jerome McCarthy, in 1960 to help businesses put together marketing strategies. It focuses on four key marketing areas:
A big benefit of the 4P’s Marketing Strategy approach is its simplicity. By using it as a guide and template any small business can be sure of producing a good marketing strategy without having to put in a lot of hard work.
In this article we will look in detail at each of the 4P’s Strategy areas.
Step 1: Product – Sell Benefits NOT features
Many small businesses (and large ones for that matter) fail to understand that customers buy benefits not features.
Take the example of a young business executive who set out to buy a new family car. He carried out some preliminary research and decided on a particular model. During his research he had considered a similar model with a four-wheel drive but rejected it as an unnecessary extravagance.
He changed his mind about the model he wanted when the car salesman managed to convince him of the value of the four-wheel drive car. He pointed out how much a four-wheel drive would help him avoid many of the hazards of winter driving and provide better protection for his family during cold, icy weather. The salesman did a very professional job by selling the benefits of security and safety (which the customer wanted), not the features of the four-wheel drive car.
Step 2: Place – Choosing a Market or Market Niche to Sell in
As a small business you may feel that it’s important to select a large market area because it’ll provide you with lots of opportunities for product sales. Whilst this may well be true, it’s also likely that you’ll meet many more competitors in a large market area. You’ll have to deal with these competitors if you want to succeed.
It makes much more sense (especially when you’re just starting to establish a small business) to segment your large market into a number of smaller market niches. You must make sure that each niche is commercially viable, but it will almost certainly have far fewer competitors.
Take the example of a small local plumbing company that wanted to expand its business. The owner of this company carried out some research and decided to sell his company’s services to customers within a new geographic niche market made up predominantly of flats and houses. His intention was to promote his business in this area as a premier local provider of emergency plumbing services.
The owner of the company had initially wanted to supply heating installation services to commercial organisations in the area,but decided against this because of the large number of established plumbing companies already offering the same type of service in the areas. He wisely decided that his company was more likely to grow its business by promoting itself as a specialist within a less competitive niche market.
Step 3: Promotion – Producing a Promotional Message which Gets Attention
Once you have covered the previous two P’s it’s much easier to tackle the next 4P area – developing a promotional message for your product.
Your promotional message is the selling statement that will persuade your customers to buy your product.
In the example of the plumbing company above, the owner of the business might choose one or other of the following two promotional statements:
“Plumbing Emergencies – Get a Guaranteed One Hour Response in Your Area” or
“We’ll Fix Your Plumbing Problem Rapidly – Before it Becomes a Catastrophy”
Step 4: Price – Choosing the Right Price to Sell at
The final area of the 4P’s Marketing Strategy is all about deciding on the price at which you’ll sell your product.
This is always a difficult area when you have a new product and a new area in which to sell it. It may not be possible to choose exactly the right price at the beginning as we’ll see later.
There are three important factors to take into consideration when determining price:
- Price Competition
- Product Packaging
- Product Perceived Value
If, after your product launch, you find you’re losing more sales than seems reasonable on grounds of price (and you’re unable to reduce your price to compete), first evaluate whether you have selected the right niche to sell in.
It’s far easier to dominate a smaller niche with low competition than it is to dominate a larger market area where there are lots of suppliers all competing on the basis of price.
Next, if you are unable or unwilling to reduce the price of your product, you should look at “Product Packaging” This is combining two or more products together to create a new product that will have a much stronger appeal to customers in your niche. This can be a really good strategy when you have to deal with price competition.
Take the example of a local company selling reclaimed corporate laptops. There are lots of companies like this in the marketplace (off and online) and potential customers find it difficult to choose which company to buy from. The company in this example decided to create an attractive package product by supplying its laptops with a range of free eBooks and a software package to catalogue and manage these books.
Product Perceived Value
Is it possible to charge a far higher price for your product than your company accountant would think reasonable? The answer is “It might be” if your product has a high perceived value. This happens when a customer desires your product so much because of the benefits he/she perceives it offers that the sales cost ceases to be a significant factor in making the sale.
You can probably think of times during your life when you wanted a product so much that you hardly noticed its price tag. If you can package and present your products so that your customers are almost prepared to “bite your hand off” to buy them you can choose to sell this product/package at a much higher price and improve your profit margin.
You’re unlikely to be lucky enough to have a complete range of products that fall into the “perceived high value” category (although Apple Computers do). But your higher margin products will enable you to take on lower margin products that you might otherwise not want to sell.
Develop and Review Your 4P’s Strategy
Start now. Develop and write down your 4P’s strategy and then produce a plan to implement it. Make sure you include timescales and product sales objectives so that you can periodically review your strategy to evaluate its success.
Go through your strategy with friends and colleagues and get their feedback. Also, if possible, test your strategy on a small scale to prove that it will work before you spend a lot of time and money putting it into action.
Try and get into the habit of using the 4P approach to strategy to develop and review launch plans for all your products. After a while the 4P’s Marketing Strategy will become second nature to you and you’ll be able to use it to spot and resolve marketing and sales problems and identify and open up new markets.