3.4.4 Evaluating and controlling the product launch

Evaluating and controlling the product launch is critical to success. The launch involves people and functions from all parts of the company, and the organisation of these people and their actions is complex. A well-planned organisational structure plans the activities, and can also quickly respond to problems caused by product quality, competitors' reactions and non-predicted consumer behaviour. Changes to activities or their timing can be made during the launch to counteract any problems arising.

Companies tend to build a 'launch' structure and use this for successive launches. For example in the food industry, it used to be a big TV campaign, backed by in-store promotions and simultaneous wide distribution in super- markets. With changes occurring in the food system, there is a need to be more adaptable so that the organisation system is permanent but the activities and techniques are selected for each project. In other words, the adaptability of the earlier stages of the PD Process is transferred to the launch. It is the most expensive stage and therefore requires the greatest knowledge from past experience. It also creates a great deal of knowledge, which should be captured for future launches.

Targets will have been set for the launch: short-term targets of sales volumes, sales revenue and market share, and long-term targets of a certain profit and return on investment and a time to recover the development and launch costs. Quantitative recording and analysis systems are set up to continuously analyse the sales and to improve the sales predictions. As the launch proceeds, the evaluation will become more definitive as more accurate data accumulate, and more realistic predictions of future cash flows can be made. The data necessary for the evaluation include production costs, prices, unit sales, sales revenues, marketing costs, company costs and finance costs. This is not just a recording system, it is also the basis for action during the launch.

One of the most difficult decisions is to change/not change the activities and the timing. If one reacts to every out-of-target result, then the whole system may get out of control; if a decision is delayed, the opportunity for success may be lost. It is important to follow trends and make decisions on these trends, not on spot data. The raw materials and direct processing costs are continuously checked to see if they are improving and are within or better than target. The distribution costs, delivery times and product losses during distribution (which also are an important cost) need to be recorded regularly. There needs to be systematic monitoring during the launch in costs, finance and market as shown in Table 3.6.


Table 3.6 Costs, finance and market monitoring during launch

Costs data Finances Raw material costs Production costs Distribution costs Advertising and promotion costs Product losses costs Wastes costs Company costs   Analysis Cost trends Costs breakdown Production efficiency Distribution efficiency Marketing efficiency Additional operational costs Financial data Finances Total costs of launching Cost of financing Capital investment Working capital Financial condition of the company Revenues Total sales revenues Analysis Gross profit/loss Profit margin Pay-back time project Pay-back time launch Return on investment Additional capital investment Additional working capital Market data Sales, marketing Sales total volume Prices, range, specials Sales individual retailers Buyers’ purchasing patterns Competitors’ sales   Analysis Market share overall Market share in individual retailers Per capita sales rate Purchase/repurchase pattern Ratio of sales against competitive products Predicted future sales

Source: After Earle and Earle, 1999.


Following sales is only one of the outcomes that need to be monitored and controlled during the launch. It is necessary to check how the product is performing in distribution, storage and retail outlets - is the quality correct, is the product becoming unsafe, are there many product rejects in the system? The retailers' and the consumers' attitudes to the product are monitored - how has the retailer placed and promoted the product? How much are the consumers buying and rebuying? What do consumers like/dislike about the product? The answers to these questions are crucial to the future of the product and need to be found in retailer and consumer surveys during the launch. Some important factors to follow are summarised in Table 3.7.


Table 3.7 Monitoring of production, distribution and marketing

Production Raw material quality Raw material availability Process variations Yields Waste – processing material, product, packaging Quality of product Equipment breakdowns Response of staff Distribution Delivery times Delivery quantities Product losses Quality of product on delivery Quality of product on sale Inventory in company stores Inventory in customers' stores Breakdowns in delivery Marketing   Retailers Reaction to delivery times Product returns Shelf space Promotion Prices Orders Consumers Consumer awareness Consumer reaction Consumer buying    - initial    - re-buy Consumer segments Relationship to other products Prices Price range Specials prices Price/demand relationship Advertising and promotion   Coverage Impact Reinforcement Retention Effectiveness Precision Relevance Acceptance Communication Focus Emphasis

Think Break Using the knowledge from your product commercialisation in the last Think Break: 1. Outline the demand outcomes wanted from the launch of your product. 2. Develop for your product launching     (a) relative product innovation level strategy,     (b) targeting strategy,     (c) timing strategy. 3. Outline the critical monitoring points in the launch and describe the     information you would collect at these points. 4. Discuss how you would analyse this information and use it to make     decisions on the launch.