Demand Estimates (2).pptx business for mba

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1. DISCOVER . LEARN . EMPOWER UNIT-1 – Lecture 4 Institute- University School of Business Department - MBA MARKETING ANALYTICS- 21BAT757 Simmi Dhyani Assistant Professor Chandigarh University 1

2. Learning Objectives Introduction to marketing CO Number PRODUCT LAUNCH DECISION Level CO1 To define management and marketing research problem. Remember   Nature and Business Plan

3. Topics for Discussion What is Product Launch? Importance of Product Launch. Types of Product Launch Elements of Good Product Launch Examples of Product Launch Using S Curve for New Product Launch

4. What is Product Launch Product launch is a process followed when a company decides to launch a new product in an existing or a new market. Product launch can be of an existing product which is already in the market or it can be a completely new innovative product which the company has made. Product launch involves various steps which involves understanding customer needs, product design, testing of the product, marketing & advertising and ensuring that the product reaches out to all its audience. A successful product launch provides a sales momentum for the company. 4

5. Importance of Product Launch When any new product or service is introduced in the market, it is called a Product Launch . An existing product can also be launched after further innovation or upgrades to the product. A Product launch passes through a number of steps known as the product launch process, starting from the ideation phase to development phase, testing phase, analyze phase to finally the launch of the product or service. The market launch starts after the product or the service has been launched and encompasses the marketing plan and its implementation to ensure that the product reaches the target market. Brand launch is defined as the creation of a new brand in the marketplace and positioning it where none other exists. 5

6. Importance of Product Launch A good product launch helps in the following: 1. Create Awareness Launching a product or brand through articles, events and promotional events ensure that the campaign gets noticed and people become aware of the product or brand. This, in turn, can increase the customer base and sales. 2. Planning and Staffing The soft launch can give an idea of the strategies to be implemented, resources and staffs requirement and the training and preparation needed to take care once the product is released to the whole marketplace. 6

7. Types of Product Launch 1. Soft Product Launch A soft launch is when the approach towards the release is limited to a small set of the target audience or a limited demographics or geographic area and check if any changes are required before launching the product to the whole market. 2. Hard Product Launch Whereas, a hard launch is when the product is released with full force marketing efforts from the very first day in order to spread awareness and excitement to customers and persuade them. 7

8. Elements for a Good Product Launch The principles & key elements for a successful product launch are the following: a) Relating Product Capabilities to Market Needs b) Having a clear positioning and messaging tagline c) Setting clear goals for launch d) Having the power of leverage e) Having a proper time of launch 8

9. Examples of Product Launch China Launch of Forever21: In order to build a strong customer base in China, Forever21 built its Tmall global e-commerce store and used social media platforms like Weibo and WeChat. The content was shared for the Chinese audience like "best places to visit in Shanghai". The campaign was so successful that the brand has opened 16 stores in China. 9

10. Using S Curves to Forecast Sales of a New Product I n many industries for which new products require large research and development investments (particularly high tech and pharmaceuticals) it is important to forecast future sales after a product has been on the market for several years. Often a graph of new product sales on the y-axis against time on the x-axis looks like the letter S and is often referred to as an S curve . If a product’s sales follows an S curve, then up to a certain point (called an inflection point ) sales increase at an increasing rate, and beyond the inflection point the growth of sales slows. This chapter shows how S curves can be estimated from early product sales. The S curve equation enables you to know how large sales will eventually become and whether sales have passed the inflection point. Example of S curve 10

11. S Curve equation enables one to know how large the sales will become and whether the sales have touched the inflection point. For Eg : Once a company wanted to develop a product. It also wanted to forecast the sales and revenue generated by the product over the next few years. It took the help of a nonlinear graph called S curve to plot sales against the time period. Once assured that the product will be profitable for the company, it invested huge money on its research & development and finally launched the product in the market. 11

12. The S curve can be divided into 3 parts: In the initial stage, the sales generated are less due to many factors like low demand, high competition in the market, poor promotion, and high costs associated with marketing. Then the sales start to increase with an increasing rate up to a point( known as inflection point). This is due to greater public awareness and reduced costs due to economies of scale.  After the point of inflection, the growth rate of sales slows down. It means that only existing customers continue to buy and the product has reached its saturation point. Once any product reaches its saturation point in its product life cycle, it can either die at this phase or if infused with new innovation and greater efficiency, it might create a newer S curve from this phase. S curves are used to plan, control, analyze, and forecast the progress and performance of a product/project over a period of time.  They are also used for cash flow forecasts, quantity output comparison, etc. 12

13. For Eg : · Sales of VAX minicomputers in the 1980s Registered cars in Italy: 1950s–1990s Thousands of miles of railroad tracks in the United States: 1850s–1930s Cumulative number of supertankers built: 1970–1985 If an S curve is estimated from a few early data points, the marketing analyst can glean two important pieces of information: ·  The upper limit of sales : Refer to  Figure 26.1  and you can see this upper limit is 100. ·  The inflection point : Defined as the time  t  when the rate at which sales increase begins to decrease. The inflection point occurs around time 5 because the curve changes from convex (slope increasing) to concave (slope decreasing) For Eg 2: 13

14. To see how an S curve may arise, suppose there are 100 possible adopters of a new product and the time for each person to adopt the product is normally distributed with a mean of 5 years and a standard deviation of 1.25 years (Previous slide). You can graph as a function of time  t  the total number of people who have adopted the product by time  t . This graph will look like the S curve referred to previous slide. To create this graph, follow these steps in the workbook Scurvenormal.xlsx: 1.  In H9 through H10:H107 compute an “average” time at which the  n th person adopts the product. For example, in H18 compute the 10th percentile of the time to adoption and assume that the 10th person will adopt at this time. 2.  Copy the formula =NORMINV(G9/100,$I$4,$I$5) from H9 to H10:H107 to compute your estimate of the average time that each person adopts the product. For example, in H18 this computes the 10th percentile of the time to adoption. 3.  Copy the formula =COUNTIF($H$9:$H$107,"<="&J11) from K11 to K12:K70 to count the number of people that adopted the product by time  t . For example, the formula in cell K21 computes the number of people (five) that have adopted the product by time 3. 4.  Graph the range J10:K70 with a scatter chart to create the chart shown (previous slide). Note the graph's inflection point appears to occur near t = 5. 14

15. Demand Forecasting Demand forecasting is closely related to the adoption of innovations within a target population. Everett M. Rogers, who wrote “Diffusion of Innovations” more than 40 years ago, has provided us with a powerful framework. Rogers extensively investigated how innovations diffuse in society, and introduced the notion of S-curve, an S-shaped curve that shows how usage of an innovation evolves in a population over time. To determine the shape of an S-Curve, we need a minimum of three points: the number of adopters in the first commercial year, or a later year, for instance the time it takes to reach the critical mass of 10% of the saturation level (the ‘early mass market’) the long-term saturation level a third point describing how fast the saturation level will be reached, for instance the 50% of saturation point (end of ‘early majority’), or the 90% point (end of ‘late majority’). 15

16. References Text Books:- 1.     Grigsby, Mike., Marketing Analytics, Kogan Page, 1 st Edition, 2015 2.     Winston, Wayne, Marketing Analytics, Wiley, 1 st Edition. 3. Venkatesan, Rajkumar; Farris Paul; Wilcox Ronald, Cutting Edge Marketing Analytics, FT Press, 1st Edition, 2015. 4. Grigsby, Mike, Advanced Customer Analytics, Kogan Page, 1st Edition, 2016. Reference Books:- 1. Halligan, Bryan., Shah, Dharmesh., Inbound Marketing, John Wiley, 1 st Edition. 2016. 2. Sauro , Jeff., Customer Analytics for Dummies, John Wiley 1 st Edition, 2017.

17. 17 Blackboard Assessment Pattern 17 Components HT-1 HT-2 Assignment Surprise Test Business Quiz GD Forum Attendance Scaled Marks Max. Marks 10 10 6 4 4 4 2 40

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