Identifying the Key Success Factors in New Product Launch

Abstract

Effective product launch is a key driver of top performance, and launch is often the single costliest step in new product development. Despite its importance, costs, and risks, product launch has been relatively underresearched in the product literature.

We reviewed the extant literature on product launch to identify the most critical strategic, tactical, and information-gathering activities influencing the launch success. We then used a retrospective methodology to gather managerial perceptions regarding launch activities pertaining to a recent new product launch, and the product's performance in terms of profitability, market share, and relative sales. A mail survey of PDMA practitioners elicited data on nearly 200 recent product launches.

Successful launches were found to be related to perceived superior skills in marketing research, sales force, distribution, promotion, R&D, and engineering. Having cross-functional teams making key marketing and manufacturing decisions, and getting logistics involved early in planning, were strategic activities that were strongly related to successful launches.

Several tactical activities were related to successful launches: high quality of selling effort, advertising, and technical support; good launch management and good management of support programs; and excellent launch timing relative to customers and competitors. Furthermore, information-gathering activities of all kinds (market testing, customer feedback, advertising testing, etc.) were very important to successful launches.

We conclude with observations about current product launch practice and with recommendations to management. Logistics plays a key role in successful strategy development and should receive the requisite amount of managerial attention. In particular, activities involving logistics personnel in strategy development showed much room for improvement.

We also find that the timing of the launch (i.e., when the launch is conducted from the point of view of the company, the competition, and the customer) is just as important as whether the activities are performed. More managerial attention should be devoted to launch timing with respect to all of these viewpoints in order to improve the chances of success.