Marketing Strategy and Competitive Positioning pdf ebook

Figure 11.3 
The new product chasm
Source: Based on Moore (1991), p. 17.
Novelty value
Early
adopters
Early
majority
C
H
A
S
M
Late
majority
Innovators
Laggards
Sloths
Sales
Time
Functional value

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THE MARKET OFFER
Pre-launch
In the pre-launch phase, before the product has appeared on the market, the main emphasis 
of the organisation will be on research and development, as well as gearing up production 
capacity for launch. The development costs for the Airbus A380, for example, have been put 
at around €11bn. High levels of expenditure may be incurred before any returns are seen 
through sales receipts. Also important at this stage is market research to identify likely early 
adopters of the product (see Chapter 12) and to develop key sales messages demonstrating 
the benefits of the new offering relative to the current solutions to customers’ problems.
Market research into wholly new products can be notoriously inaccurate. Sony’s formal 
market research into the Walkman concept showed that there was little potential demand 
for a mobile music player, but the chairman, Akio Morita, went ahead anyway and created 
a whole new market that itself evolved into the advent of quality streaming and is now 
dominated by a totally different product: the smartphone. The lesson is that customers 
may not know what they want, or what they could find useful, before they see it. We refer 
to these as ‘latent markets’ – waiting for creative marketers to discover and exploit them.
In the advent of co-creation, firms turn more and more to social media tools at the idea-
generation and screening stage to engage with their potential customers and to screen ideas 
(Roch and Mosconi, 2016).
Launch
The launch phase of the life cycle is the major opportunity for the organisation to shout 
loudly about the benefits the new product can offer. This will often take the form of explain-
ing to customers the new benefits over and above those enjoyed from the products they 
currently use to satisfy their needs.
At this stage, by definition, there is one product in the market and the real task is one of 
convincing the best prospect customers (the innovators identified through research during 
pre-launch) of the value of the new offering. The launch period offers significant opportuni-
ties for creative communication with prospective customers while the product is novel and 
newsworthy. Public relations (PR) can be particularly effective at this stage, as can the use 
of exhibitions and conventions.
Expenditures can be very high during launch, with returns in the form of sales not yet 
realised. Significant budgets may need to be assigned to give the launch the best prospects