PLANNING FOR NEW PRODUCTS IN EXISTING MARKETS

Devising an effective product strategy requires a deeper understanding of the market situation. The Ansoff's business strategy grid provides a good framework in this regards. Per Ansoff's matrix there are 4 different business growth strategies:

• Existing Product Existing Market - Market Penetration
• Existing Product New Market - Market Development
• New Product Existing Market - Product Development
• New Product New Market - Diversification

Even if the above framework focuses explicitly on business growth the same can be extended to develop a detailed product blueprint pertinent to each of the product market situation. In this blog I will cover in detail the product strategy for shipping out New Products In Existing Market. In an existing market the organization has available product offerings for identified target customer segments. Thus the game plan germane to this situation is to stay focussed on improving product offering by addition of new features, enhancing quality and ushering in new technology. All these requires additional investments in R&D, product modifications or product extensions and is exposed to medium risk for success. Illustrated below is the outline of a model to develop new products in existing market with built in stratagem to transcend the risks involved. The entire product development process is organized into 5 distinct stages:

Opportunity/Problem Identification 

The first and foremost step is to pick out a sizable opportunity to pursue. A vital source of information is product feedbacks from existing customers. Another source of insight is understanding pattern of issues from customers who drop out from renewals. A third reference point is understanding market perception of product through root cause analysis of all lost sales(during business development process). It is quiet possible that the product may not have any lapses per se but instead the target segment is saturated and ergo the need to penetrate into new customer segments. In such cases it is necessary to explore new opportunities that may manifest in two ways: adding new features to the existing product, morphing it and making it lucrative for new user segments; a new product being added to the product line focussing on the needs of a new user segment.

For new opportunities exploration it is imperative to gain understanding of competitor penetration into the different customer segments. Continuos market and industry research will help spot latest trends in customer needs and behavior. Also comparing the lacunas in self offering with various organization initiatives will unfold need gaps that can be translated into new opportunities. 


Opportunity Assessment 

An opportunity/problem once identified needs to be sized for potential impact. This will require both secondary and primary research. First based on secondary research and assumptions a high level estimate can be forecasted.  The forecast can be used to evangelize the idea in various internal forums. This process will help identify stakeholders willing to fund the idea and also improvise the idea based on inputs from stakeholders. The impact estimates based on secondary research can be further validated with primary research methods: focussed group, user experience research  or a working prototype (with minimum effort) exposed to a sample set of customer. Based on customer feedback from focussed group/user experience research or empirical data from the prototype the high level estimate can be refined to make way for a more realistic opportunity assessment. At this stage it is also essential to identify all partnerships required (if any) to make the product successful. 

Product Conceptualization 

This is the heavy lifting stage of the product development process with varied tasks initiated and accomplished before graduating to the next stage. Firstly the baseline features of all competitor products need to be benchmarked and compared against self product features to identify any gaps. Secondly the product goals need to be fine tuned based on stakeholder inputs closely followed by defining and finalizing the measurement methodology for the product success. If any third party vendor is involved in product development than the relationship with these partners are deepened at this stage. Also the product design is iterated with stakeholders to ensure that all the multiple view points are taken into consideration. The detail level requirements of the product is defined and based on it the high level scope of the product is estimated.

Project Management 

At this stage the detailed product plan is developed. Also resources are secured for the project both from within the organization and also outside the organization and the project is started. The bulk of activity in this stage focuses on tracking and monitoring the project progress. All product or project related risks need to be identified and managed at this stage. The product needs to go through thorough testing before certified as launch ready.


Launch and Test

A product is rarely launched to the entire population in one shot. Sometimes the product goes through an experiment with one or few customer segments before being opened slowly to all the other customers segments. In other cases the product is launched to different customer segments in a certain predetermined order. Regardless of the approach all products are tested with a sample test population, and their feedback reviewed before deemed ready for nationwide launch.This is to contain any issues (if exists) within a smaller segment of population rather than leading to a nationwide catastrophe. Thus a launch strategy has to be formulated which will cover in detail the order in which different segment of customer will have access to the product, the duration the product would be tested with one segment before being opened to other segments, the criteria for opening up to each of these segments, mechanism for receiving feedback, and the metrics to be evaluated. Post launch the product metrics and customer feedback need to be tracked and monitored to review the performance of the product. If any negative inputs exist then it needs to be collated to created the product enhancement/modification plan as the next phase.


The above model is a high level framework which help significantly minimise the failure rates of a new product launch in existing market.