5 Ways to Launch a New Product That Will Beat Out the Competition
There are many ways to launch a new product, but only a few that garner the attention needed to make that launch a success. The failure rate for new products launched on an annual basis hovers around approximately 80%, so CPG brands already have the odds stacked against them. Rolling out a new product creates a need to shift marketing strategies for established products in a new direction.
A small but influential segment of consumers could have the potential to be responsible for a new product’s success. This segment represents the individuals who will drive awareness of the new product and make up its regular user base. For this reason, a new product launch must be targeted specifically to these consumers. This means connecting with influencers, testing markets, and preparing a pre-launch strategy. Most product launches will face challenges, but there are strategies that can be implemented to work around every single one and ensure success.
Common Problems in CPG Product Launches
While the measure of success for a CPG product launch can vary widely, it’s commonly recognized that the vast majority of new CPG products don’t achieve that status. The main reason is apparent. There aren’t enough consumers to go around when compared to the total number of products available. Beating the odds is about marketing. Often, when a new CPG product fails to catch on, it’s due to one of six reasons.
Awareness
Pre-launch is a bit of a challenge, as brands must let the public know a product is coming out, without actually launching the product. Without the right pre-launch strategy, a product could be finished before it ever hits the market.
Competition
Every day, a new competitor to any CPG product can potentially enter the market. It also doesn’t help that the economy is globalized thanks to digital access which creates a situation where consumers can easily purchase items sold anywhere in the world. Also, challenger brands can pull market share from established companies simply through the power of social media.
Saturation
The sheer number of CPG products available to consumers creates a problem which is often insurmountable for brands. If brands can’t find a way to differentiate products in their crowded category, sales will flounder.
Loyalty
Loyalty poses a threat to any brand when that loyalty is to a competitor. While it may be more challenging to establish loyal relationships with customers, once set, these relationships are stable.
Longevity
Even products which start strong can fail to gain the momentum they need, with sales tapering off to nothing after the initial launch campaign is complete. While in some cases, that’s how the products were designed, in others, longevity is imperative to success.
Marketing Mismatch
Strategies must align with an audience. Even the most innovative marketing methods can fail when they don’t align with the target audience. Brands must genuinely understand the audience they’ll be targeting when their new product is released.
There are a lot of pitfalls in launching a new product. However, even with the odds against them, brands can achieve success by laying out a strategy which includes taking advantage of technological innovation.
#1: Follow a Pre-Launch Plan to Improve Awareness
A brand can fail before their product ever reaches the market if a pre-launch marketing plan isn’t laid out. During a pre-launch is the time to iron out the kinks in a campaign by testing it in front of target markets. A few critical parts of a digital pre-launch include the following.
Pre-order Priming
Getting consumers to pre-order a product before it’s rolled out to the masses can drive awareness and interest. It can also improve visibility for the product in online shopping sites, allowing it to rank even before its release.
Establishing Critical Audiences
Brands need to develop the audiences which are essential for their success early on—before the product’s release. The pre-launch stage allows brands to calibrate this audience for the best possible awareness upon release.
Review Aggregation
Brands must collect and cultivate reviews from various sources online to build anticipation for a new product. This is a time when contracts are solidified with influencers and any common concerns are rooted out.
A/B Testing
Brands need to test market various campaigns to determine which ones resonate with consumers. They may conduct A/B tests, where both campaigns are released together in a smaller space, allowing consumers to watch and select their favorite. A/B testing can be conducted either through a brand’s website or via a third-party site. This strategy helps to ensure the brand is using the right media.
A pre-launch is the time to start the buzz before releasing a new campaign. These soft opens allow brands to test their products in front of target audiences. This way, if any areas are weak, the brand can pivot their strategy.
#2: Target New Markets to Differentiate a Product
When a product is in a saturated category, brands must find ways to distinguish it from its competitors. Through this, the brand connects with a new consumer pool. In some cases, this is the only way to gain a hold on a market where the share is established. Globalization provides opportunity here. As the economy is increasingly international, brands can reach out to markets where such products have not reached saturation. Nestle provides a prime example of this in the brand’s focus on the Chinese coffee market.
In the U.S., the coffee market is saturated. Consumers have a wide range of ready-to-drink, to-go, at-home brewed, and instant options. However, in China, there are fewer options in the instant coffee category. Nestle focused heavily on expansion in China just as the market for instant coffee gained about 1 billion yuan in value. The company continued its focus on China, moving on to selling higher-end coffee machines, just as demand was set to increase.
This strategy allows the brand to continue to expand its market share even in a crowded sector. Brands are able to use the internet to reach these markets, making international expansion less expensive. Brands that wish to take advantage of the momentum of new markets should consider them when launching a new product.
#3: Add Value to Marketing to Beat the Competition
Added value marketing is a means of enhancing the consumer experience. The consumer receives something valuable to them through the brand’s marketing. What the consumer gets does not have to be a high-cost item. Something low-cost and scalable, like collateral materials, are often enough to improve the perception of a brand. Collateral materials are merely the information which comes with the products, like directions for use, coupons, or other brand-related offers.
DIY hair color brand Nice’n Easy provides insight on how to pull off an added value campaign with collateral materials. The brand created an extensive Q&A that explains why its newest dye formula is better and how it reduces the risk of allergies as a way of rolling out an updated product. Much of the relaunch strategy centered on the formula’s molecular structure and how it solves common hair color problems. The brand refers to this as “damage blocking technology” which enhances consumer perception. Nice’n Easy differentiates a common product by focusing on educating the consumer. As consumers understand how the formula prevents damage, they’re more likely to trust and remember the new product.
Added value marketing also works in the shopping aisle. Consider a third-party app, like Shopkick, which allows consumers to scan UPCs in the store in exchange for valuable rewards points. This type of marketing encourages consumers to seek out the product in the store by rewarding them for their interaction with the brand. The app also gives brands an opportunity to share product information and provide value to the consumer at the point of purchase. It creates a positive consumer-brand relationship, meaning it’s an ideal option for a new product launch.
#4: Gaining Market Share Through Influencers
Influencers provide brands with an opportunity to leverage the trust of a well-known person without the high cost of a celebrity endorsement. Influencers are typically limited to online communities, where they have large followings in a niche market. Their close relationships with these followers make them more trustworthy to consumers.
Influencer diversity is becoming increasingly important. An excellent example of diverse influencer partnerships can be seen in Red Bull’s marketing strategy. The brand works with a wide range of athletes in endorsing events and providing advertising partnerships. Through this, Red Bull gains access to those athletes’ followers. Red Bull has a unique group of these influencers working with them, representing a wide range of nations and cultures. This creates an inclusive, diverse following which the brand can leverage when releasing new products.
Influencers offer the benefit of creating content for brands. While a brand’s new advertising campaign may gain limited buzz, a post from an influencer about the brand builds trust and brand affinity. Creating strong influencer relationships is imperative for a successful product launch.
#5: Making Marketing Match the Audience
When a marketing plan doesn’t match an audience, brands will face challenges in gaining awareness for a new product. A marketing mismatch can be very costly for brands as it isn’t evident until the campaign is in full swing. Brands won’t realize until the content is already out there that it fails to connect with consumers.
In the worst case, it could alienate consumers. There are many cases where well-meaning brands have moved forward with campaigns without prior market research, and as a result, caused a lot of controversies. Virtually every major brand has created a marketing snafu by not thoroughly researching their audience. This makes the pre-launch stage even more critical, as brands must consistently test and retest marketing materials before releasing them.
A significant part of this lies in regularly reviewing the available data these campaigns generate. Brands should evaluate trending hashtags and interactions on social media not just to see if consumers are interacting, but how they’re interacting. If consumer data indicates the audience is not receptive, brands should have an alternate marketing strategy or audience to target. The key is catching a marketing mismatch early to ensure that the brand can pivot quickly and keep the product launch on track.
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Combining Ways to Launch a New Product for the Best Results
Consumers are receptive to new product launches, with 63% reporting they enjoy it when manufacturers offer new products. However, there are many ways to launch a new product, and not all of them are effective. Brands should combine the most successful options to ensure that consumer reception to new offerings is positive.
A robust pre-launch strategy, global focus, and influencer partnerships will help a brand gain the audience needed to ensure a strong debut. Meanwhile, consistent monitoring of the campaign along with incentivized interaction will keep the right consumers engaged. Choosing the right ways to launch a product is all about a brand knowing their audience. The more a brand understands that audience, the better prepared they are to cater to it.
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