INNOVATION
Test Market Launch Not A Guarantee For Innovation Success
By Senorine Wasike
Many organizations consider test market launches as a critical phase of new product development , especially for complex projects that can result in launch failure . Whereas this approach makes a lot of logical sense , research has demonstrated that not all test launches result in successful launches . According to Nielsen , gaining 25 % of your target distribution in the first year of launch doubles the new brand ' s ability to sustain performance post-launch .
Test markets by nature limit distribution to a specific region or channel , which could negate the concept of pilot launches .
things in life , but here are a few lessons I have learned along the way .
Getting the Test Launch KPIs Right
Most of the test market measures of success focus on the consumer , for instance , their acceptance levels and willingness to purchase . Businesses often overlook the measure related to the route to consumer ( RTC ), which plays a crucial role in ensuring that the products get to the target consumers . Factors such as trade margins , product handling at the point of purchase , and resolving issues that come up can negatively impact the test launch if not measured . Before going into full commercialization , projects should be checked against the test launch KPIs to ensure that they mirror the initial assumptions .
Pilot Incentives
Project managers provide a lot of incentives to both the consumers and customers participating in pilot studies . Incentives such as preferential prices or discounts to recommend the new product serve as motivations . At the pilot level , support of this nature may not be costly because of the scale ; however , such incentives may not be feasible when the pilot goes into full implementation .
Test Market Exclusivity
People generally are receptive to trying out new things they perceive as exclusive .
increase their ability to focus and make
therefore , not reveal the project ' s potential until full implementation . It is important to watch out for the exclusivity risk factor . During full commercialization , the how can be tailored to suit the target market as long as the fundamentals remain the same . Adjust as you go .
Change in the External Environment
evolving , driven by the changing technologies . Test launches must consider the possibility of changes in the macroenvironment during and after the launches .
happen in ' controlled ' environments that can unconsciously manipulate or bias the
incorporate any changes to minimize the risk of failure .
Course Correction Challenges
All new launches require close followup and iterations based on consumer feedback , which is very easy to achieve on a small scale . Scaled-up launches require a lot of coordination of hundreds of people from different regions . If not well managed , many people involved in the full commercial launch can get frustrated with slow momentum , such as when problems are not resolved promptly . Project managers should aim to achieve the most impact not more than three months after full implementation of the project .
Bringing it all together
Test launches have been used for decades across many industries and proven to increase new launches ' success rate . Recent research reveals that there is a notable increase in launch failure after successful test launches . Companies need to relook how they carry out pilot launches by getting the test launch KPIs right , checking the pilot Incentives and exclusivity , monitoring changes in the external environment , and course correction beyond the test phase .
Credits : https :// www . nielsen . com / ssa / en / insights / article / 2019 / from-fail-fastto-win-safe /
https :// hbr . org / 2021 / 01 / how-to-scalea-successful-pilot-project
Senorine Wasike is a Strategy and Innovation scholar with over 10 years corporate experience . She currently heads innovations at Kenya Wine Agencies ( KWAL ). You can commune with her on email at : Senorine . Wasike @ gmail . com
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