Every marketer wants his new product launch to be successful — ensure his product flies off the shelf while keeping costs low and profit margins high. Siddharth S Singh, associate professor of marketing, and director of the fellow programme in management at the Indian School of Business (ISB) tells Rajarshi Bhattacharjee how marketers can manage all that on a tight budget.
Given the tight economic scenario, what strategies could marketers pursue to reduce launch costs? What are the early warning signs that a launch strategy is not working?
I would leverage new media (that is, social media) to reduce costs. Of course, there are associated challenges and such platforms should not be considered casually and for short-term benefits..
The early warning signs can be many since the reasons of failure are many. The obvious ones are the lack of adoption, low repeat purchase, low awareness for the product, issues with the inventory, lack of support at the sales channel, and training of sales persons. Typically, firms will develop tracking mechanisms to track the key metrics and use these metrics to evaluate launch performance. An unexpected value of these metrics indicates issues with the corresponding component of the launch strategy.
It is important to understand that a launch is an expensive proposition and a company has to plan it meticulously, which includes tracking and contingency planning. Therefore, any warning signs that the company can recognise control and/or respond to are considered in the planning process. The planning results in many early warning signs that are monitored by the company. Of course, surprises still happen but that is a different issue.
How can a new brand use the social media? What are the so-called traps of using the social media?
The social media must not be considered on an ad hoc basis. A company must approach the social media to engage and strengthen its relationship with its customers. There are many benefits to a well thought of social media strategy. Once a company has incorporated social media into its business, it can achieve many benefits by leveraging its presence on the social media to help its product launches. An important aspect of the social media relates to product development. Engaging customers in this process increases the likelihood of success to start with.
Another important aspect is that the social media allows a firm to engage with a self-selected group of customers who are more inclined to like it and its products. Customers who spend time with the firm on social media already value the relationship. Easy access to such a group can help in many ways such as testing the product prior to launch, or creating word of mouth during launch.
Al Ries recently wrote, “If you don’t have the right strategy, good tactics won’t help you very much. And social, like all media, is a tactic. What concerns me is that too many marketers have elevated tactics — especially those of social media — to the level of strategy.” Would you agree?
Not entirely. The first part is correct. I would not entirely agree with the second part. More and more people are recognising that the social media is a major development that has significant implications. It is “conversation on steroids across time and space”. It has subtle and long-term implications for consumer behaviour. Firms are learning how to leverage it. I believe that eventually the use of the social media would become an integral part of many functions within a company. Therefore, this would naturally be part of a company’s strategy. I am not suggesting that companies are doing this now. At the moment, the ad hoc approach to social media is dominant, that in essence is a tactic, not a strategy.
Siddharth S Singh
Associate professor, marketing, and director of the fellow programme in management, ISB
