marketing projects that hit the mark
Ultimately, product success depends on anticipating consumer demands and scheduling projects to take advantage of them.
BY PAMELA ROHLAND
The road to marketing success is frequently littered with good intentions gone wrong.
Consider the software messaging system launched in the late 1990s by daily planner giant Day-Timers Inc., headquartered in Allentown, Pa., USA, that was meant to replace the scraps of messages you post for family members on the refrigerator. “The technology was ahead of its time, and the product just wasn't practical,” says Jeri Cohen, managing partner of ORIGIN Communications, a Pennsylvania marketing and public relations firm and part of the team that launched the product. “Consumers decided it was easier to put messages on the fridge.” Although a promising public relations campaign led to reports in the national media, the software soon graced the clearance aisle at office superstores.
Project managers who have been able to convince executives not to follow through on an ill-timed or ill-conceived product right from the start are the lucky ones: They aren't heaped with blame when consumers give it the cold shoulder. Knowing when to release the right product at the precise moment when it will be accepted by the buying public is a science and an art that calls for sound market research and cultural sensitivity.
Hit the Essentials
Market research, the most basic step in timing projects to suit consumer demand, often is ignored by everyone from mom-and-pop businesses to Fortune 500 corporations. One of the most common mistakes project managers make—dooming their products before they're even born—is to insulate themselves from consumers.
“There will be 10 management people in a room deciding what they want to launch and when,” Cohen says. “Their decisions are based on what ‘we’ believe the market wants, and they go ahead without doing any market research.”
These days, research methods abound, ranging from simple one-on-one interviews at the mall to sophisticated focus groups, test marketing releases, demonstration, telephone surveys and lengthy, scientifically calibrated questionnaires. As a rule, the more in-depth, varied and accurate research a company has at its disposal, the better. That's why gathering data about consumers should be an ongoing effort, not one that simply takes place at the time of a product launch or upgrade, according to James P. Shankweiler, president of the Barneston Management Group, a project-management and strategic-planning firm in Morgantown, Pa., USA.
Generally, using more than one research method will give project managers a clearer picture of the market. But when time is tight and the budget limited, companies can turn to online market research firms that develop researchquestions and promise accurate survey results in as little as three hours.
However, a company can do extensive research and still miss the targeted market. Remember New Coke? Of course you don't.
Ask the Right Questions
Developing the kinds of questions that will elicit the information project managers need is a science in itself. In general, the questions should be linked directly to the team's hypothesis about the product, be free of any direct or indirect bias, and be listed in logical order with sensitive questions, such as the respondent's household income, listed last.
Questions should not lead the respondent to a “correct” response. For example, don't ask, “How strongly do you agree;” instead pose, “How strongly do you agree or disagree.” Franklin Rubin, a retired marketing manager for direct mail firm Metropolitan National, Upper Darby, Pa., USA notes that surveys and questionnaires going to an audience outside the company's home country should be carefully translated to make sure that ideas carry over from one culture to another. Colloquialisms and words that don't translate easily should be eliminated.
Be ‘High Touch’
There's no substitute for going into the trenches to talk directly with consumers. That's what American Foodservice Corp., King of Prussia, Pa., USA, did when it wanted to find out if its new veggie burger would find a market among high school and college students. According to Cohen, company representatives spent up to eight months offering taste tests and doing surveys at both large and small schools. Although the product was received favorably, the company decided that the reception wasn't going to be strong enough to warrant the launch.
Attending trade shows is an excellent way to get a sense of how a product will be received. At a recent Professional Golfers' Association of America trade show, dozens of booths were selling golf shirts, but careful observation showed that few were buying them. The obvious conclusion is that market is saturated, so now is not the time to bring out a new golf shirt.
In the highly competitive snack foods industry, developing new products and getting them to market quickly are essential to success. For Nabisco, a New Jersey-based subsidiary of Kraft Foods Inc., it is imperative to continually develop and produce products that people want to try. One bad decision can result in millions of dollars of unprofitable research and development, manufacturing and marketing.
To consistently create profitable new products, Nabisco created Journey, a product-development process that coordinates all project communications and establishes firm go/no-go hurdles for every project. By enabling better communication for cross-functional project teams and tighter project management, the process, which employs off-the-shelf Microsoft software products, minimizes unsuccessful development efforts and expensive product-specific equipment, according to Microsoft, which provided support for a standardized infrastructure effort.
Historically, Nabisco's new products followed a consistent pattern: one-third of new products were blockbuster successes, a third were mediocre performers, and another third were under-performers, Microsoft reports. One of the key benefits of the initiative is that it provides a central repository for all project data, from financial estimates to latest product scores to project timelines.
Journey prescribes that every new product must have market research and financial tests performed at certain stages. At each stage, certain minimum scores must be achieved. This information is communicated through Microsoft Exchange public folders, so everyone on the team knows if a product made the grade or not. Then Journey prescribes the next step(s) and notifies the responsible parties. Whereas before, these issues could be skipped or fudged, the Journey system establishes firm quantitative hurdles and go/no-go criteria.
After seven months, Journey reduced trial budgets by a third, and because Journey adds rigor to market research and other critical decisions, Nabisco is better meeting customer desires, boosting brand loyalty, and increasing sales, according to Microsoft.
Look at the Real World
The political climate, changes in the economy and other social events and issues will affect what consumers are doing. Terrorist attacks in New York City and Washington, D.C., USA, on 11 September changed the market in a single day. It affected movie releases, product launches and the way future advertising campaigns would be presented.
“Project managers need to be sensitive to society's psyche and know where people's heads are at,” Cohen says. “Right now, people are into spirituality and nesting, unlike the 1980s, when collective greed was the agenda.”
Understand Your Product's Life Cycle
It is essential for a company to be aware of the average shelf life of its particular product, according to Barneston Management President Shankweiler. The life cycle for a new article of clothing would be about a year, 18 months for a computer, several years for a snack food and two decades for a nuclear power plant turbine. Knowing the product's full life cycle will help the team better understand at what point the market will be most receptive to the product and at what point interest will wane.
MATCHING ANALYTICAL TECHNIQUES WITH MARKETING INFORMATION NEEDS
Your choice of analytical techniques should be driven by the nature of your marketing information needs. Definitions of the analytical techniques can be found under the Survey Research Planner at www.dkronline.com. (Click on “free sample” under Analysis Plan.)
|Marketing Information Need||Analytical Techniques|
|Understand preferences (what they want); configure a product, service, program; determine pricing, distribution, sales force and channel decisions||Conjoint analysis, discrete choice modeling, univariate, bivariate analysis|
|Understand perceptions (what they think they are getting)||Perceptual mapping (discriminant analysis, multidimensional scaling, correspondence analysis), univariate, bivariate analysis|
|Devise competitive strategy||Perceptual mapping (discriminant analysis, multidimensional scaling, correspondence analysis), conjoint analysis, discrete choice modeling, univariate, bivariate analysis|
|Size, segment, target a market||Factor analysis, cluster analysis, CART, CHAID, QUEST, discriminant analysis, univariate, bivariate analysis|
|Positioning within a market||Perceptual mapping (discriminant analysis, multidimensional scaling, correspondence analysis), factor analysis, univariate, bivariate analysis|
|Testing, experimental designs (test market, advertising, pricing, packaging, etc.)||ANOVA, MANOVA, discriminant analysis, cluster analysis (for selecting test markets), univariate, bivariate analysis|
|Sales forecasting||Multiple regression analysis, time series analysis (ARIMA, smoothing, Box-Jenkins)|
SOURCE: DEEPER KNOWLEDGE RESEARCH (www.dkronline.com)
There are four phases in a product life cycle. During the introductory period, consumers must hear about the product and be educated about it. With a new product, this phase may last several weeks or months; it will be shorter, however, during the reintroduction of an existing product. During the growth phase, the product is off and running, and demand peaks. In maturity, the product's third phase, competitors have arrived on the scene, and the company must distinguish or reinvent it. During decline, consumer interest drifts.
Project managers also should be aware of cultural differences affecting market demand, Shankweiler notes. The life cycle of a product will be shorter in the United States than in Europe, for example, where people tend to shop less frequently and hold on to products longer.
Established organizations often already know when peak demand will occur from previous experience, and they time projects accordingly. The greatest interest in buying Omni-point cell phones, for example, occurs in the days before Christmas, Shankweiler says, and the company's consumer base explodes in the days afterward, when new customers activate their phones. The project manager must time production, distribution, advertising and product releases to coincide with those dates. If a product is less time-sensitive, the company can select a target date and plan its schedule accordingly.
In most cases, a project schedule that has been thrown off by a few days will not affect product viability. “We have been a few days or weeks late in introducing product,” Rubin says. “The only effect was that we had to redo the publicity.”
It is important to be realistic about the length of time a project will take, according to Richard R. Young, Ph.D., FCIT, a professor of project management at Penn State Berks-Lehigh Valley College who has been involved in completing projects for Conrail and the U.S. Marine Corps. “Develop an understanding among those responsible for preparing time estimates that the most realistic ones will best serve the owner/customer more than telling them what they think they want to hear when the project plans are being formulated,” he says. “Realize that each person responsible for a work package will pad [his or her] time requirements. In the aggregate, these cause the total project to appear to take more time than should be required but also causes subsequent tasks to be started later than they need to be.”
Cohen believes “Am I respecting my consumer?” is the most important question for a project manager to ask before embarking on any project. “People are smart,” she says, “and they'll understand if a company doesn't do that.” PM
Pamela Rohland is a freelance writer whose articles have appeared in Entrepreneur International, Entrepreneur, Worth, Specialty Retail Report and Home Office.
PM NETWORK | FEBRUARY 2002 | www.pmi.org
FEBRUARY 2002 | PM NETWORK