Bizdev Basics: Launching Your New Product Line

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1 Bizdev Basics: Launching Your New Product Line As a printer today, you are certainly very aware that competition is fierce and you need to set your business apart and make it stand out from the rest. You know you can no longer rely on the fastest, cheapest, best printing technology on the market, because the acquisition of technology means you are really only as good as the next guy that purchases the same technology. That means you need to do more than offer new services; you need to think about new ways to use the equipment you have on your pressroom floors, new markets to serve, and new ways to get the attention of and talk to prospective customers. This is product development. Launching new and innovative products that open new markets and thinking differently about print creating demand for printed products can be unique and potentially profitable. Following are just a few items to think about when preparing to launch a new product line. Do You Have a Marketing Plan? Developing a company marketing plan can be quite an undertaking and potentially taxing on personnel time and talents. Traditionally, a marketing plan is developed by a marketing director whose job is to oversee the marketing activities of the company. This can include: Public relations duties: generating PR bulletins and copy for newspapers, radio stations, and television stations; handling external complaints; acting as a liaison to both the external community and company personnel Brand management: branding iconography and marks, logos, printed collateral, advertising management, newspaper ad placement, directory ad placement, radio ad placement, television ad placement Web services: website creation, development, maintenance, and upkeep, social networking management, e-commerce management, Web marketing management Scheduling: developing and maintaining a marketing master schedule that orchestrates all of the above within the confines of a quarter or an annual period

2 Bizdev Basics: Launching Your New Product Line 2 Although there are not many designated marketing directors employed within the printing industry (most specifically in the small and medium enterprise [SME] sector), they generally work closely with senior sales management in the areas of sales forecasting, sales collateral development, and perhaps creative services. If your organization does not have a marketing director or someone who performs the tasks listed here, it is recommended that you work toward filling an individual position to maintain these duties. Obviously, such a decision is dependent upon budget allocations and fiscal stability; however, given the importance of marketing and the positioning of your company within the red ocean and your view over the blue ocean (see sidebar above) it would seem that a position such as this would be highly valuable and instrumental to launching a product development initiative. At the minimum, someone within the organization should be asked to assume these responsibilities at least until the post has been created and filled. If such a position is unable to be created and/or filled within the next year, then perhaps someone in a senior role within the company could oversee the activities. Do You Have a Bizdev Team? In addition to the essential duties listed, the marketing director is also responsible for overseeing the team (the business development, or bizdev, team) required to launch the product development initiative. The bizdev team can comprise the entire sales force, customer service representatives, and anyone else who has exposure to and interaction with customers (both directly and indirectly). The team will be responsible for: Red Ocean vs. Blue Ocean W. Chan Kim and Renee Mauborgne, authors of the 2005 book The Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, argue that traditional Western management business philosophy (a hard set of principles that have become embedded within our DNA as taught to us from both the academy and the existing corporate culture) focuses primarily on destroying the competition i.e., those who think and act and provide the very same services/products. This internalized and often obsessive war results in undermining the competition by undercutting bids from the same clientele within the same target markets. Kim and Mauborgne refer to this as the red ocean. They wrote, To focus on the red ocean is therefore to accept the key constraining factors of war limited terrain and the need to beat an enemy to succeed and to deny the distinctive strength of the business world: the capacity to create a new market space that is uncontested. This uncontested space is what they refer to as the blue ocean. Conceiving the products Creating the product prototype Designing the product logo and packaging Creating the product brand Performing the marketing research activities Reengineering the final product design

3 Bizdev Basics: Launching Your New Product Line 3 Preparing and writing the applicable marketing collateral (product samples, sales brochures, and advertising sundries) Training the sales force on crucial product fundamentals and how to use the marketing collateral to open doors and sell products, print, and services Creating a detailed schedule of product launch dates complete with objectives and assessment plans It is recommended that in the product development process, at least four (at the minimum) products be created and presented for consideration for launch on a quarterly basis. It would be ideal, however, to have one product per month prepared and ready to launch for the beginning of every month (twelve products to open doors with both nonexisting and existing clientele). What Kinds of Products? In their book New Product Development for Dummies, Robin Karol and Beebe Nelson suggested that there are three primary classifications of sellable products: 1) Breakthrough products 2) Platform products 3) Derivative or support products Part of product development in the printing industry is to challenge traditional business pricing models. Breakthrough products usually consist of new technology, they wrote; however, they are important in providing customers new ways in which to do old and new things. Platform products consist of core products that potentially provide spinoffs for new products. Support (or derivative) products are products that extend an existing product s value perhaps moving into the new-and-improved status. Truly innovative products are the result of exploration in the blue ocean by eliminating inhibitions to seek new markets and learning about the potential needs of businesses unfamiliar to you. How Do We Price New Products? In his book Not for Free: Revenue Strategies for a New World, Steve Berman argues that not only do today s companies, immersed in the red ocean fraught with vicious competition, have to consider prospects of production innovation but pricing strategy as well. The printing industry has remained founded upon the premise of the impression and/or click charge since the beginning of time. As a result, consumers have become conditioned to look at higher volumes with lower unit costs; i.e., if the job is 500 impressions, then the cost per impression will be higher than if the job is bumped up to 5,000 impressions. This begs the questions, Why do we price this way? and, more importantly, Are there other ways?

4 Bizdev Basics: Launching Your New Product Line 4 Berman wrote: Bundling is not only profitable but also a highly effective means in which to expand marketability and revenue. Namely, executives look at their dominant audience base and find it difficult to understand why they should take on the risk and expense of developing new models for minority segments when most of their current revenue and profit comes from a core customer base. They only realize their mistake when it is too late after a competitor or new entrant has innovated a profitable way to take on the smaller segments and eat into the main revenue base of the industry over the last decade. Part of product development in the printing industry is to challenge traditional business pricing models anchored to click charges and impressions against strategies that tie more deeply to market share, website click-through, and/or bundling. According to Berman, the girding of proper business model innovation is founded upon: Industry innovation: identifying new industries, markets, and segments that exist and are yet to be created Revenue innovation: acquiring new streams of revenue using existing assets Enterprise innovation: facilitating a substantial hold of the value chain through role innovation Much of product development requires experimentation in each of these areas and an ability to look beyond the familiar. Some firms have created products based on pricing strategies that charge per hit on a website as opposed to click charges. This entails creating printed collateral that drives consumers to websites, which in turn generates click-through (monitoring the length of time a consumer spends on any given website that generates interest) and ultimately a purchase of some sort. Printers who are experimenting with this sort of strategy receive remuneration through percentages of sales generated and hits on a website. Such a pricing strategy removes the price-per-piece mentality and creates a reeducated philosophy that is focused instead on the price-per-response. By not thinking too myopically about what defines a product or a space, wrote Berman, companies can find more opportunities to expand their revenuegenerating reach. Should You Bundle Products or Services? Many printing and graphic communications organizations have attempted to bundle or combine printed products and/or services together as an opportunity to expand sales and further markets. Selling business packages that include letterhead, envelopes, and business cards is an excellent way to showcase abilities to different markets that require special products. Several marketing scholars have concluded that bundling is not only profitable but also a highly effective means in which to expand marketability and revenue. This can only occur, however, if the bundle is identified as a product and sold for a price that is lower than the total of all of the items combined. Such strategies have a unique effect albeit at a modicum on buyer behavior, product and pricing perceptions, and purchase intentions. In a study conducted at the University of Missouri, Raj Arora discovered that consumer purchasing behaviors can be influenced by price bundling. He wrote, The evidence re-

5 Bizdev Basics: Launching Your New Product Line 5 vealed that while the main effect of price bundling was not significant on attitudes, it was significant on intentions to purchase the products. This means people who are intent on making a purchase regardless of their attitude toward the product are influenced by strategic pricing that combines products (or services) in an all-for-one bundle. Related Resources These are just a few of the many stages to, and concerns within, the product development process. Want to know more? Your next step is The Future of Print Sales: The Renewal of Print Manufacturing through New Product Development by Kenneth Macro. The Future of Print Sales provides printers with a comprehensive exposure to scholarly and popular business literature written in the areas of change management, business innovation, marketing, branding, and product development. The book, at the minimum, provides valuable insight into enhancing sales through product introduction. Macro presents a step-by-step guide on how to conceive, design, research, test, market, and launch new products from within your organization. To help illustrate the concept, he also shares the experimental products designed and researched by students in a sales and marketing class facilitated at the California Polytechnic State University, as well a variety of real products out on the market. For more information on this and our other graphic communications business titles, visit You may also contact our Member Central department at membercentral@printing.org, ext. 770, or for assistance.