Once a new product idea or service innovation has been shaped into an interesting product package through product development, it must be commercialised, i.e. launched to the market for sale and distribution. This is one of the core areas of business strategy that can either maximise or weaken a product’s opportunities for commercial success.
At least the following questions must be resolved when planning the commercialisation of a product:
• Pricing. What is the general price level for corresponding products or services? What kind of pricing model will you choose for your products and on what grounds? What will the profit margin of the retail price be after expenses? On what terms is the pricing profitable?
• Marketing message. What is unique about your products and services? How will you present their strengths in brochures and marketing materials? How can you convince your customers about the benefits of your products?
• Customer segments. Who are your most important customers and target groups? How many of them are there? What are the purchasing habits of those customer groups? How much are they willing to pay for the products and services? Do the name, brand and packaging of your product package speak to the target groups? Do people understand them correctly? Do you know your target group sufficiently well, or should you commission an analysis from an expert?
• Selecting the sales channel. Will you commercialise your innovation yourself or offer it to others for commercialisation through licencing arrangements, for example? What kinds of distribution channels or retailers will you use? How will you find the correct channels to the target markets?
• Sales promotion and reaching customers. On what grounds do your target customers make their purchasing decisions? How can you affect this? How do your products and services stand out from the rest? What advertising media will you use? What professionals will you need to build and advertise the brand?
• Protecting the product. How can you maintain the unique competitive edge of your product and prevent competitors from copying or imitating the product? Can you use industrial rights for a particular dimension of the product? How much will your company invest in applying for or registering rights? How will you monitor your rights?
The solutions and decisions related to the commercialisation of the product are an integral part of the business plan. Good advice and support for creating the plan is provided by the “Starting a business” pages.
Obstacles to commercialisation and business
Before a product can be manufactured and sold on the market, it must be determined whether or not there are any obstacles to its commercialisation. The name, product mark or design of the product, or possibly the entire product idea, may be protected under the industrial rights of another company. Bringing a product of this kind to the market is an infringement of these rights, which means that the obstacles must be determined as early on as possible in the initial stages of product development.
The production and sale of certain products are subject to a permit, notification or registration. These products include alcohol, pharmaceuticals and precious metal products, for example. In addition, products must naturally be manufactured in compliance with all laws and regulations concerning issues such as hygiene in food production, chemical safety, the environmental effects of production waste, etc.
The continuous development and adaptation of a product
The development of a product does not end with getting it on shop shelves or in service brochures. In order to be successful and retain its popularity, a product must meet the changing needs of consumers and adapt to the changes in the competitive situation.
Designing the life span of the product and maintaining the vitality of the product families and variations as well as discontinuing a product when necessary are all part of the product development strategy of a company. Product adaptation or variation is used to modify products to meet new needs. Taking a product abroad particularly places it in a completely new competitive situation, where the terms of success must be fully reassessed.