How Firms Commercialize Their Products: How to Bring Your Product To Market

How Firms Commercialize Their Products: How to Bring Your Product To Market
Hey there, fellow marketers, Professor Wolters here. And today we're going to continue our conversation about new product development. And today what we're going to focus on is the commercialization of our new product. Because we've already developed this product, we figured out what our customers want. We developed a perfect little product or service they're really going to desire.
And now we have to figure out is, how are we going to commercialize it? How are we going to get it onto the market? Where are we going to sell it? All these kind of things, really putting together the four P's. Finally, like together, because we've got the first P, we've got that new product.
But now we have to think about the prices, the place where we're going to sell it. How we're going to promote it and things like that. Because when you think about it, what we really have to start thinking about is when. When are we going to put this product on the market? And the thing you have to realize, is your market that you're selling to, a lot of times will dictate when you release your product.
For example, if I'm going to re- releasing, you know, a water bottle for the beach, right? Well, if I'm going to do this, am I going to release it in December, when it's cold, and no one's thinking about hot weather and taking anything to the beach? Of course not, I'm going to release it closer to the summertime, right? Or if you think about it in terms of game consoles, right? They don't release them, you know, it usually in the spring or in January.
They release it before the holidays, because that's when parents are willing to spend a lot more money to buy them a $500 gaming system. Because you know, you might get that, or Santa might get that for a kid for for the holidays.
But might not get them for a random Tuesday in January, not a really big day. So we have to think about these things. And you think about, with a gaming consoles.
Have you ever noticed, it's about every six years, you get like a new PlayStation, or a new Xbox. And when a new PlayStation comes out, you know that new Xbox is gonna come out about the same time or another Nintendo is going to come out at about the same time. Because they know we have kind of like a generational thing. We need to all be coming out about the same time.
And so if another company, let's say I don't know, Apple wants to come out with a console gaming system.
They're not going to come out with it in the middle of the cycle. They're going to come out when people are ready to buy a new console, after a few years. So you kind of plan those things out. And that's one thing you really have to consider when you're thinking about that when. When is my market going to be ready to buy this?
Okay, so you might think about that in terms of movies. When do the big movies come out? In the summer, you have your summer, tentpole movies. Why, well, you have all these kids that aren't in school, right? And so that's when they're out, they need something to do.
Parents don't have time to stay with their kids all the time. Let's throw them out an Avengers movie, let's throw them out a sci-fi movie. Let them stay there for three hours, so we can clean the house. You know, you have to think about these things.
So really, the when, when we're starting to think about commercialization really is dictated by a lot of factors that you do have to consider.
And then next, I think W word you need to ask yourself is where. Where are we going to launch it first? So you might look at it in terms of this way. Where are we going to launch it in terms of, where is that target market going to be? Right, so if our target market is buying gaming consoles at Best Buy, we need to be at Best Buy.
Or if people are buying their gaming consoles online, we need to have an online presence and sell it there. Because you really have to think about is where's our audience going to be buying stuff? Where are they deciding? That's where we need to be in order to get that target market. Because we're really trying to do is find out is how can we deliver the most value to that customer.
And in terms of that where, it's going to be what what delivers me the most value? It's where I buy it, right? And so we have to think about those things. That's why we do so much marketing research and market research in general when we are developing a new product. Because it's not just making a new product.
It's also figuring out where we're gonna put it, okay? Now the next step I want to talk about is what we call the rollout. Which is kind of like a timing thing, but also a where. It's that where and when kind of thing put together. Because we have to figure out and roll out, which stores are going to get our products first?
Which regions are going to get our products first? See I've lived all over the world.
And I remember you know, I'd be here in the US and the new Nintendo 64 is out this October, I'm like, "Great." And then I moved to Europe in September, and I'm thinking, "Oh, in October, I'm going to get it." No, no, no, it didn't come out till the next spring in Europe.
I'm like, what-what happened? Well, Nintendo looked at and said, "Wait, who are our biggest markets?" Who should get these first? Because we don't want people not to be able to get it.
So they released it in the US and Japan first.
And then a few months later, it was released in Europe. And a few months later after that, it was released in South America. You have this kind of idea of, where am I going to roll it out first, okay? And so you'll see companies do that where, you know, they'll test market in different areas to kind of see what works first. If works there, we're going to go to more stores.
So like, when Burger King came out with their Impossible Whopper, it wasn't available everywhere at first. They rolled it out in certain stores, then in certain stores, and then it went nationwide. Okay, because you have to think about that. Where and when and who's going to go first, who's going to go second, who's going to go third? We have to think about those things.
And sometimes you'll see that with new mobile phones. Sometimes it first comes out, you know, only exclusively at AT&T. And then after six months, maybe it's at the other places, right? So we just try to think about these things out there.
 
And you kind of put that where and when and where and when together.
You got to think about those things when you are doing your commercializations of your product. And the thing is, it's not just the where and when. Because if you think about it, the where part really is that kind of place part of the four P's. 'Cause what we're really trying to figure out is, where should the product be initially sold. And things that might kind of really influence that as well.
You might look at in terms of, where we're going to sell, do they have delivery options? Or we might look at it in terms of, will they be able to handle the extra inventory that we need to have them in there? Because if we're going to have a big huge TV kind of thing, are we going to have space in a small store to sell it? No, we probably need to put it in the big box stores, like a Walmart or Best Buy or something like that.
Now another the four P's we have to focus on the commercialization is promotion.
A lot of times new products fail, because people don't know to even exist, right? And so we really have to think about is, where are all the places we need to promote our product? Yes, we need to promote it to that end customer that's going to get that benefit out there, right? So we gotta make them- make sure they know how good our product is, what the difference is, what makes it special, why it's gonna be perfect for them. But the thing is, it's not just about promoting your product to the end customer.
You also have to promote your product throughout the supply chain. You have to explain to Best Buy, why it would be a good idea to carry our game console. You have to explain to Cartoon Network, why would be good for us to have their-our commercials on their TV channels. You have to explain all the things out there. And you have to consider all that when you're looking at your promotions.
Because what you might end up doing is having trade promotions.
You know, you might have a slotting allowance. "Hey, Best Buy, we're gonna pay you to put one of our consoles at the front door, so people can see the new graphics and the new controllers and try things out." But we're gonna need to pay them to do that, right? We have to think about those things, with those slotting allowances.
Or maybe you do a trade allowance or an advertising allowance. "Hey, if you advertise our product, in your promo flyer, we'll sell it to you at a lower price. So you can get it- you can make more money in the end in your markups." Or other things you might think about in terms of promotion. You might have, you know, the promotional, you know, introductory pricing.
I mean, think about it, how many of you have signed up for cable, because the first month was $19.99, and then went skyrocketing prices after that? Well, we might think about that, those promotions, that goes into there.
I know that kind of ties in with pricing, because you do have to think about pricing when it comes to new products. You know, launching, right, and commercialization.
And we do have a video that goes into a lot of different new pricing or new product pricing kind of setup. So do watch that video to get some of the ideas of the specific kind of new price, new product pricing strategies that companies can use. But we do have to think about is what is going to be our manufacturer's suggested retail price.
Because we have to make sure that everybody in the supply chain is making money. Because if the delivery driver isn't making money, they're not going to deliver your products.
If the in store, you know, Best Buy's not going to make money selling your products, they're not going to carry it. And you got to make sure you're making money. You also got to make sure your customers are feeling like they're getting value out of these things for this new product.
So you really have to think about a lot of things when you're developing your pricing. And there are those slotting allowances, where it helps to figure out where it's going to place also could affect the pricing and stuff like that.
Because hey, if we're going to be paying for that stuff to be there, we got to factor that into our cost and our pricing development. So a lot of stuff you really have to consider. And the last little thing about the commercialization thing I'm going to talk about. I'm wanna kind of go back to the promotion side of things. And what a lot of people don't realize is when you're promoting your product throughout your supply chain.
Sometimes it's about finding new suppliers, new retailers, new ways to get your product out. So you might actually go to a lot of trade fairs just to talk about your product, so people know about these things. Because if you look back into history, people thought the Nintendo, you know, the Wii would be a failure. Right, like, oh, the graphics isn't very good. Nobody's gonna want this because they get a PlayStation that has way better graphics, where you can see the person's head fly off when you chop it off in-in Mortal Kombat.
And, and they don't even do that on the Wii, right, back in the day. But the thing is, when they went to the trade shows, and they were showing people how it works and stuff like that. It's like, hmm, you know what, this might just work. This is actually something that might work for everybody. Because sometimes seeing it in situ actually working can help your product sell better.
That's why when you go to the trade shows and show how it works, that might help it out. How many times have you gone to a Macy's or a Walmart or, or maybe your local grocery store, and they had the free samples kind of stuff, those kind of things? We had to think about that. Will that entice people to try that new product? So it's a lot of things you really have to think about when you're doing your commercialization of your products, okay?
And this is just touching the surface, right? You remember, make sure you're looking at the four P's when you're developing your commercialization.
Also the where and when you're going to sell these things. Stuff like that all comes together when you're looking to commercialize a new product. So I hope this helps you get an idea of how that commercialization phase of new product development kind of comes about.
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