It might be assumed that when a new product is ready for the market, a successful launch can be made simply by using many of the proven marketing techniques available. To some degree, this may be true, if the company supplying the product is well known and already has a widely established customer base. If already strongly positioned, companies can get the attention of their customer base quickly, using product announcements, advertisements, brochures, and direct contacts through sales personnel. In addition, if the company reputation is very strong, customers may be more willing to assume the risk of trying a new product--provided there is a perceived need for the benefits claimed. Assuming the majority of the benefits are realized, one could expect a fairly predictable growth for the product, and even be reasonably accurate in making sales forecasts, since the customer base is already established and the reaction of the competition can likely be predicted.
But what if little of the above conditions actually exist? Let's take a real world scenario that I personally experienced in the 1980's, when a new polyurethane roll cover product for the paper industry was introduced by KRC® in North America. Let's examine how sales and marketing developed under very challenging circumstances. Initially, a strategic plan had been adopted which had the potential of minimizing risk while offering a fast return on investment. Both the manufacturing and marketing rights in North America had been purchased from Yamauchi Rubber® in Japan.
A few trial roll covers had been previously supplied from Japan to North American paper mills and these were operating successfully. The plan included training of manufacturing personnel in Japan, building a plant in North America, and receiving plant start-up assistance from the Japanese. Japanese personnel would even assist in product training for sales personnel. Since the product was already being used in Japan, there would be no need for North American R&D in the immediate future. It would appear that everything was in place for a smooth and trouble free entry into the market. But it soon became apparent that the task was going to be much more difficult than originally assumed.
Background and Immediate Challenges
The ownership of the company changed before the manufacturing facility was completely built. Although the new technology transfer was incomplete initially, the core manufacturing team remained intact and the work was later completed. Due to changes in both management and sales personnel, it was necessary to complete in-depth training before the product could be introduced into the market. The initial product and manufacturing training required the presence of a translator, due to the Japanese language barrier.
The company housing the new plant facility was not widely known, and serviced mainly regional paper mill customers. The manufacturing methods for the covers were strongly protected in the purchase agreement, thus plant visits by potential customers were not allowed. The goal was to make a significant market penetration of a new polyurethane roll cover into North American paper mills, by replacing established rubber roll covers supplied by strong competitors. To succeed in this goal, all the above challenges and others which arose after the product was supplied had to be successfully met.
The following list contains some of the traditional marketing considerations required in this project, and the resultant actions.
• Select the product name, color, and packaging
Because the Japanese name of the roll cover was essentially unknown in North America, it was decided to retain the High Top® cover name and its distinctive yellow color. Standard packaging similar to that used for other roll covers was used.
• Develop product specification sheets and decide on product launch advertising
Product specification sheets followed the general format of rubber covers. It was decided to release an advertisement showing a large roll cover (from Japanese plant), accompanied with information concerning the future manufacturing in the U.S., to generate customer interest. Other than trade magazine announcements when the plant came on-line, no other major advertising was initially done. This was due to the limited North American experience at the time.
• Advance training of the sales force
It was critical that the existing and new sales engineers be fully trained concerning the product specifications and benefits. Since the only reference sheets available involved covers operating in Japan (on generally smaller paper machines), the training had to be focused not only on the product, but also include a cost/benefit analysis which superintendents could use for justification of purchase to mill management. This method was later reinforced using actual operating data when the covers were used more widely. Since advertising and references were limited, the sales engineers were trained in making detailed presentations at the customer sites, supported by other technical personnel as needed. In other words, the sales engineers were instrumental in matching the product capabilities to the customer's needs.
• Target "ideal" customers
The "ideal" customers are usually those who are most likely to purchase the product and those applications where the product is most likely to succeed. Based on performance in Japanese paper mills, it seemed that the best applications were the press section rolls used in fine paper, newsprint, and tissue grades. Unfortunately, most of these mills were located outside the shipment distance normally serviced by the company's location! This created sales challenges to convince customers to send their roll cores longer distances than customarily done with rubber covering. Shipment terms became a discussion topic in a number of mill presentations.
• Develop a strong product warranty
Since the product was priced significantly above rubber covers, customers were not willing to accept the standard roll cover warranty terms, which were based on workmanship and material defects only. Consequently, the warranty terms had to be extended to include a pro-rata adjustment based on anticipated running life, if the cover did not perform suitably. While this became complicated and in some cases expensive, it had the advantage of maintaining positions when replacements were required. Fortunately, the covers performed very well except in those situations where the application proved to be unsuitable.
• Have excellent service capabilities
This included not only technical service support to troubleshoot problems, but also repair capabilities for cover damages. The ease of making secure repairs to polyurethane covers, either in the field or if returned to the manufacturing site, was soon realized as a strong advantage by the paper mills.
• Have a longer term marketing plan
As the new product use matured beyond the launch phase, and the number of field applications began to grow, it was very advantageous to make use of increased advertising. It was decided to integrate the technical aspects of the polyurethane roll covers not only in magazine ads, but also in technical articles in the industry trade publications. In addition, a number of technical presentations were made at trade association meetings. Eventually, as the company's reputation related to roll covers strengthened, the entire product line capabilities were made available in other advertising and on a web site.
In summary, any company introducing a totally new product must be prepared to react quickly to unexpected problems. Although many traditional methods are available to assist in product marketing, these have to be adapted to the specific situation. Knowing the competition, and monitoring their counter strategies, is also very important.
Robert Moore is a retired chemical engineer, and is an experienced technical and fictional writer. His past work experience spanned the chemical, paper and equipment manufacturing industries, including holding management positions at Voith Paper, Scapa plc, and The Mead Paper Corporation. |
