Marketing of New Products Essay

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Company and Product Overview

Herschel Supply is a Vancouver-based company that specializes in backpacks and similar items. The company was founded in 2009 and has become quite trendy, experiencing strong growth since that time (Herschel Supply, 2017). They now sell in the US, Hong Kong, Australia, New Zealand and more, in addition to their home market. Herschel products are sold at a premium, and are known for their simple, elegant styling, and sturdy construction.

The company is now planning to expand its product line into suitcases. This is a natural extension given the current flagship product is backpacks, and the company already produces smaller travel bags. Launching a line of suitcases would give Herschel not only a natural extension, but access to a large market. The suitcase business is highly competitive, but there are no brands that have the same brand image and attributes that Herschel brings, so executives believe that there is tremendous opportunity. However, entering this market requires a considerable amount of planning on the marketing and product side, and the role of the product marketing manager will be to drive this effort forward.

The new suitcase line will fit with the current brand image of simple, elegant, stylish and sturdy, the same attributes that encapsulate the rest of the Herschel line-up. The suitcase industry is highly competitive, and split into three main segments. At the low end are fairly generic brands, such as those produced for discounters like Wal-Mart. These offer relatively low quality at relatively low prices. Price is the main point of competition. The mid-market is fairly large, ranging basically from starter midmarket brands like American Tourister to premium mid-market brands like Samsonite. This segment is fairly large, and the brands typically compete on brand name, as well as quality, while maintaining approachable price points. The high end, which features brands like Tumi, and various luxury brands, typically focuses on style, high quality and brand as key differentiators. Herschel expects that its luggage will compete at the upper end of the mid-market, against Samsonite but as a more stylish alternative, positioned away from business travel and more towards the independent traveler.

Key Success Factors

Di Benedetto (1999) identified several key success factors in new product launches: marketing research, sales force, distribution, promotion, R&D and engineering. These factors make intuitive sense. Marketing research reflects the ability of the company to identify what gaps exist in the market. R&D and engineering reflect the ability to execute on that vision – to bring a quality product to market that aligns with the gap in the market that was identified. Further, sales, distribution and promotion are all critical influencers of the buyers' journey, and should reasonably influence the success of a new product launch.

Di Benedetto also notes that the timing of the launch is another important factor, so it is important that the company is able to identify whether there is an optimal time, and then to make sure that the launch process is managed so that the timing is aligned with the best possible launch time.

Cooper and Kleinschmidt (1995) discuss the KPIs that are typically used to measure the success of a new product launch.

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A lot of the activities, especially those in marketing, are going to be driven by the choice of KPIs that are used for the launch. An example would be whether Herschel intends to measure success on the basis of market share, or profit, because there is a trade-off between high spending to win penetration at the expense of short-term profitability, and seeking out short-term profitability that might come at the expense of market share.

Cooper (1994) also built out a framework for evaluating new product success. The ability of a new product launch to meet KPIs is dependent on product superiority, strong market orientation, focus and project prioritization, early and sharp product definition, solid up-front homework, cross-functional team approach, quality of execution, and a systematic stage-and-gate new product process. There is a clear emphasis on research and planning in these factors, as new product launches done without proper planning will either result in a product that the market doesn't need (or want) or they will deliver a product that doesn't fit with the identified gap. For example, not having an early and sharp product definition could result in significant delays as the scope of the product changes substantially, forcing all teams involved to go back to the drawing board on numerous occasions.

Ernst, Hoyer and Rubsaamen (2010) discuss the interface between marketing and R&D that is needed to drive success new product development. Without cross-functional cooperation between marketing, sales and R&D, a new product is less likely to succeed. Marketing can help to determine what gaps exist in the market, sales can help to define pain points, and R&D can work with these departments to ensure that the new product fits a need that the market has, but that might not be served by existing products. When there are breakdowns in these linkages, a new product might still succeed, but the odds of that happening are going to be lower.

Roberts and Candi (2014) discuss the role that social media can have in new product development. For many companies, social media is a marketing function, and the ability to engage directly with customers means that testing of ideas can occur quickly over social media. They found in their study, however, that social media was a relatively ineffective tool for market research. There were some issues they identified, including the self-selection of people to interact with the company on social….....

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