Posts Tagged ‘Launch Costs’
Marketing a New Product the Decision of the Entry Time is Critical
In marketing a new product the decision of the entry time is critical. When a company has completed the period of rapid new product development and knows that competition is at the end of the job then, faces three choices:
* Be the first to enter: The company that first introduced a new market enjoys the “advantage of being first,” which consist in obtaining some distributors and key customers and gain a reputation for leadership. On the contrary, if the product is launched before it is fully developed the company could acquire an image of imperfect products.
* Delivery parallel: the company could plan their time of entry with the competitor and if this precipitated the release does the same. If the competitor takes his time, the company must take your own, using this extra time to refine the product. The corporation could access the promotion and launch costs would be shared by both.
* Delivery after: the company would delay its launch until it has made the competition, which would be three potential benefits. The competition will have borne the cost of educating the market. The product of competition can reveal failures that can be avoided by the new entrant. And the company can know the size of the market.
The decision of when to enter carries additional considerations. If the new product is replacing an old company, it could delay its introduction until the end of the stock of the old product. If the new well is seasonal demand could be maintained until the time comes.