At last the product is ready to go. It has survived the development process and it is now on the way to commercial success (if all goes well, that is!). 'Commercialization' is the process or cycle of introducing a new product or production method into the market. In this stage, the product is launched, advertisements and promotional activity begins and increases heavily, and the distribution pipeline is filled with the product. The actual launch of a new product is the final stage of new product development, and the one where the most money will have to be spent for advertising, sales promotion, and other marketing efforts.
The commercialization process
Commercialization of a product will only take place, if the following three issues are satisfied:
- Timing of launch: When facing the danger of cannibalizing the sales of the company's other products, if the product can be improved further, or if the economy is down, the launch should be delayed.
- Launch location: It can be in a single location, one or several regions, a national or the international market. This decision will be strongly influenced by the company's resources, in terms of capital, managerial confidence and operational capacities. Smaller companies usually launch in attractive cities or regions, while larger companies enter a national market at once. Global roll outs are generally only undertaken by multinational conglomerates, since they have the necessary size and make use of international distribution systems (e.g., Unilever, Procter & Gamble). Other multinationals use the "lead-country" strategy: introducing the new product in one country/region at a time.
- Target consumers: The primary target consumer group will have been identified earlier by research and test marketing. This primary consumer group should consist of innovators, early adopters, heavy users and/or opinion leaders. This will ensure adoption by other buyers in the market place during the product growth period.
The company has to decide on an action plan for introducing the product by implementing the above decisions. It has to develop a viable marketing-mix and create a respective marketing budget. When a plan is in place for each of these three issues, then the commercialization process may begin .
Crowds outside an Apple store
Whenever Apple launches a new product, there are inevitably crowds outside waiting to get their hands on the new product.