Successful Launch of a New Product: lesson for African SMEs
The rate of failure of new products and services in Africa and the world is something entrepreneurs and Micro, Small and Medium Enterprises (SMEs) in Africa can note and learn from. Take for example HPs Touchpad which attempted to rival Apple’s I pad, Mpesa in South Africa, Safaricom Big Box etc.
In some sectors, the failure rate for new products and services is as high as 90 percent. Numbers like these represent a clear resource drain and an opportunity for vast improvement.
In this article we will attempt to logically explore steps SMEs can follow to ensure successful product launch.
Identify an Opportunity and Generate a New Idea to fill it
The starting point for any idea of a product is the people test. If nobody wants or needs your product, it is bound to fail. The starting point for all product development should be to analyze the needs of current and potential customers; their levels of satisfaction with what the competition are offering, their consumption habits and the technical possibilities for improving existing products.
Measure the Opportunity
Once you’ve gathered information on market trends and your strategic objectives, the next step is to analyze the segment or segments that the product is geared toward and predict future buying habits as much as possible. There are various product development tools such as the Kano Model, Affinity diagram and many more that can help identify need and group them by established criteria. Viffa Consult can assist you either by taking you through the process itself or use of products development tools.
Develop the Concept
At this point, the new product idea is refined to best serve the needs of potential clients and is differentiated (stand out) from the competition.
How can this be achieved? Get opinions from lead users who may foresee future needs in the market. You can also leverage on various expertise offered by Viffa Consult such as design and production for your technical requirements, marketing for reaching customers, finance and operations management for determining what funds are available.
The main aim at this point is client satisfaction, differentiation and profit potential.
Testing
Now you need to create your prototype and, essentially, assess how well it performs. Does your product:
- Offer a series of features that satisfy customer needs?
- Arrive on the market at an opportune time?
- Perform efficiently with regards to development and manufacturing costs?
- Maintain a healthy equilibrium between the launch cost and the product’s capacity to turn a profit?
It’s also good to keep in mind that investing in cost reduction early can increase profitability. Cutting product prices can increase market share, which in turn trims distribution costs and discourages the competition.
Position and Launch
With the product designed and studied thoroughly, the next step is to decide on its strategic positioning. How do you want potential customers to perceive the product? This stage needs to take into account economic, but also functional and emotional factors.
Traditionally, functional innovations were emphasized in new products. But this has become less sustainable in the current climate, as technology advances allow competitors to respond and new innovations to enter the market quickly.
When price and features of rival products are similar, differentiation is largely due to the emotional factor. This is at the heart of the relevance of brand image, communication and the so-called intangible attributes of a service or product.
Take an example of Coca-Cola. Its advertising strategy has strayed away from the beverage’s features, instead seeking to establish an emotional connection. Its latest campaigns, “Open happiness” and “Taste the feeling” are right on-trend.
It’s a competitive world out there. Planning carefully and remembering the human factor can pay dividends when launching new products.
https://viffaconsult.co.ke/successful-launch-of-a-new-product-lesson-for-african-smes/