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Commercialisation (NPD Stage 6)

Category: Marketing

Commercialisation represents the final phase of the NPD process. During which final strategy adjustments are made and the product launched. Test market findings are acted upon. For example, test market data may suggest changes to one or more features of the actual or augmented product; distribution plans may need to be revised to incorporate new channels or to intensify or make more exclusive the existing distribution network; promotional emphasis may have to be altered; pricing may need to be changed.

When launching the new product it is common practice to roll out the launch over a period of time. A limited launch begins in a defined geographical area, and gradually expands into adjacent areas. Thus Cadbury’s «Wispa» bar appeared initially in the North East of England, and was subsequently rolled out in other regions.

Sometimes the locations used for full market testing are also the areas where the initial launch occurs. The subsequent roll out thus becomes a natural extension of test marketing.

Dibb, Simkin, Pride and Ferrell (1991) provide a useful review of the major advantages and disadvantages of a gradual roll out approach to new product commercialisation, compared to an immediate national launch. These are summarised below:

Advantages Disadvantages
Gradual 1 Less risky 1. Allows competitors to
«Roll-Out» 2 Allows distribution network to observe and monitor.
Launch adapt. 2. «Copy-cat» products emerge.
3 Allows gradual gearing-up of 3. «Blocking» promotions by
production. competitors
Immediate 1. Takes competitors by 1. Risky.
Launch surprise 2. Heavy drain on resources
4 Heavy demands on
5 Stresses production capacity.

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