Sunday, June 15, 2014

Saturated Launch versus Silent Launch: Quality and Innovation as the Tilts to the Right Choice

Product launch is one of the most important milestones in the lifecycle of a product. Next to product development expenditure, product launch expenditure is the single largest expenditure component. While the scale and scope of launch determines the scale of revenues, the splurge on product launch also has an adverse price impact, influencing revenues in turn. Several options are available to the new age marketers in media to achieve saturation marketing. The loudness of some of the recent product launches including multi-full page advertisements raises the question if the maximal deployment of the promotional resources is required in today’s competitive marketing scenario or, on the contrary, promotional resources are being well spent. In fact, some of the promotional characteristics of even high technology products like consumer electronic products are focused more on visual aspects than on technical points. Even in respect of iPhone there is nothing more than a strong product visual and a price buyback offer in a full page advertisement!

While this excessiveness is an offshoot of free market competitiveness, the trend of saturation and intense advertisement of product launches is also related to the shortening product lifecycles. It has probably become important for firms to aim at the fastest possible recovery of investments, sometimes in periods as short as 3 to 6 months. The movie launches of recent times which aim at not only maximum number of screens in the home state or home country but also at simultaneous multilingual and multi-country launches is a striking example of saturation launches. While the automobile industry in sellers market conditions was accustomed to pre-launch booking of cars, other businesses especially cell phone and tablet firms are vying with each other in taking pre-orders although such industries are not exactly in sellers market conditions. Saturation marketing for the benefits listed above carries with it the possibility of making the customers insensitive to the messaging. It is time to consider if silent marketing could be an alternative to the current trend of vocal marketing; however, prior to that, an examination of what could constitute saturation launch could be appropriate.
Saturation launch
Saturation launch involves launching a new product through a well conceived and well coordinated advertisement campaign on the new product involving all the media (almost like a  blitzkrieg!). Typically, it starts with teaser advertisements in the pre-launch phase and full blown advertisements in print (newspaper and journal), radio, television, cinema, and social media immediately prior to and after product launch. In respect of certain products (such as automobiles and electronic gadgets) exposure in exhibitions of products at prototype stage itself is a given phenomenon. The benefit of saturation launch is that it captures the attention and imagination of the widest possible potential buyer and influencer base. It caters for diverse attention spans and mood scenarios, from early morning to late night exposure and flexibility of weekdays or weekend coverage. Given that each medium has its dedicated following as well as transient and random following, an exposure strategy can be designed based on product features and target customers. Saturation marketing is expressive in multiple ways; in fact, it attempts to capture the imagination of the customers through multiple human senses.
Pictorial, reading, listening, touching and simulation are the ways in which saturation marketing works. Saturation marketing can attract a potential customer to a product through pictures, can educate through written explanation, convince through sound bites, motivate through feel, and integrate through experiential simulation. Movie trailers, product displays, model homes, architectural walkthroughs, self-selection options and automobile test drives are examples of how pilot experience options can be deployed by firms to propagate the features of products as launch cum marketing experience. Next to such holistic experience, pictorial launch and marketing has been the most effective, and popular, medium of launch communication in India, even in this digital age. Sky hoardings, wall posters and wall paintings, rain and sun canopies and painted displays on transport equipment continue to be the most expressive launch media in India. Packaging and carry bags as well as flyers and leave behinds or product leaflets enable communication of the messages in a more ambulatory fashion. It is estimated that a saturation launch campaign on all of these lines together with maintenance marketing would cost anywhere between 10 to 20 percent of sales revenue for a product that achieves a viable scale.
Silent launch
Silent launch, on the other hand, could save the firm a considerable amount of such expenditure which can be passed on to the customers in terms of lower prices for the products. However, what exactly could be a silent launch has no formal definition. That said, it may be defined as a launch of a product without advertisement or publicity of the contemporary kind. One of the recent silent launches in India has been the re-launch of Tata Aria crossover SUV a few weeks ago. Compared to the first launch a few years ago, the re-launch has been absolutely quiet. In practical terms, silent launch tends to be the only option for products launched by small and micro enterprises (SMEs) and self help groups (SHGs) which cannot afford launch resources. That said, a silent launch need not be, and cannot be, a nondescript launch. Silent launch could involve quiet but effective product display at points of sale with efficient sales executives explaining the product features, and wherever feasible, touch and feel. Display of new automobiles in luxurious shopping malls is an example of silent launch. Even in the FMCG sector, consumers are often surprised by new products which quietly take shelf life alongside established products. Some of the SMES and SHGs tie up innovatively with leading hotels and retail chains to gain display and marketability as a component of the corporate social responsibility of such large enterprises.
Silent launch is particularly appropriate under five conditions. The first is when the product is such a runaway hit that it needs no special publicity. An iPhone, whose attributes of use and symbolism of possession are well known, qualifies for such a silent launch position. The second is when the product is likely to be a low volume niche product whose sales would not bear a proportionately elastic relationship with the advertisement and other launch expenditure. Tata Aria, which though a good product could not capture the imagination of the market, falls in such a category. The third is when a product is launched under marginal costing principles leaving no scope for launch extravaganza. The fourth is when, as discussed earlier, the firm by its very ownership or operational structure has no resources to support launch activities. The fifth is when the product is of a neighborhood variety; for example, local produce or local eatery. Word of mouth, including product reviews by independent reviewers, plays a strong role in the success of silent launches. Silent launches can occur in any industry though! The movie industry is prone to successful silent launches made possible by positive word of mouth. Products which are highly visible in use (like automobiles) or in display (like televisions) and products which are a common part of daily use (like fountain pens) gain by word of mouth or ease of use. Some industries like pharmaceutical industry or insurance industry may find themselves appropriate for (relatively) silent launches given the regulatory restrictions.
Quality, innovation
Saturation marketing, by definition, is cost-intensive. In contemporary marketing in India it has become cost-excessive due to several high voltage attempts to grab attention. The practice of having a celebrity brand ambassador (a successful movie actor or an accomplished sports person, for example) has been the biggest cost driver of saturation marketing, on a rather universal basis. Sponsorship of major sporting events such as Cricket IPL and Football World Cup are the significant seasonal cost drivers.   Taking full front page advertisement space in newspapers and multifold front page advertisement space in journals and magazines has been another extravagant cost driver. Sponsorship advertisements in popular television serials or sporting event telecasts are also major cost drivers.  In terms of sunk costs with recurrent expenditure, exclusive company sales plazas have emerged as the trend to capture consumer imagination. Big firms tend to utilize all of these elements to ensure, in their view, strong enterprise and product line recall. However, does this recall automatically translate into consumer preferences for specific products? The answer is probably in the negative.
If Samsung, LG or Sony would launch a curved super high definition television, the consumers would be interested in evaluating purchase of such a new product based on novelty of features and the prestige value associated with such purchase rather than on whether any of the companies was associated with any great event or celebrity. While it may be argued that when the market is crowded with many competitors such high voltage and saturation marketing enables some differentiation and recall, it is a moot point if there exists a direct correlation between such saturation investments and actual product purchase decisions. Many of the concepts underlying saturation launch and marketing need to be validated by research on the revenue effectiveness vis-à-vis cost extravagance. In the earliest stages of mechanical revolution, in the middle years of electronics revolution and in the contemporary digital age, only quality, as evidenced by predictable and reliable performance, remains as the robust consumer draw while only innovation, as evidenced by premium, futuristic product design, remains as the unique product differentiation. As competition gets tougher, firms would do well to seriously reconsider marketing extravagance and reevaluate relative allocation of expenditures between sustainable quality and innovation on one hand and saturation launch and marketing on the other; from the author’s view the balance has to tilt strongly tilt in favor of the former! In such a quality and innovation driven scenario, silent launch could provide more value for the consumer than saturation launch would provide.
Posted by Dr CB Rao on June 15, 2014




1 comment:

Bharti said...

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