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Product launches are a key way for many companies to generate profit, adjust product structure, and respond to competition. However, we find that many companies rush their product launches, acting hastily without a plan, failing to establish a comprehensive launch mechanism, let alone conducting thorough pre-launch research, which plants the seeds of failure before the product even hits the market.

Apart from hiring market research firms, the sales department should also conduct extensive field visits and research to facilitate a quick and effective product launch.

Case in point: A beer company launched a new product in a region in Northeast China.

  • Launch objective: Increase sales volume while maintaining the overall budget, thereby boosting the company's marginal benefits.
  • Launch region: Peripheral urban markets.
  • Launch rationale: The peripheral urban markets have low consumption levels and favor low-priced products. After the company raised prices on its original low-priced products, there was a gap in this price segment.
  • Launch brand: XX 8°
  • Launch price: Y yuan
  • Packaging: Standard packaging
  • Specification: Standard specification
  • Distribution strategy: One reward card per 50 cases, with rewards ranging from 5 cases, 2 cases, 1 case, to none.

...

The above is part of the company's overall launch plan for this product. Although it follows some previous launch strategies and is somewhat "systematic," it is essentially a launch activity that is unprepared, purposeless, and baseless.

All activities lack mechanism and research! The company's rationale for launching this product is purely presumptuous: "Low consumption levels, acceptance of low-priced products." It completely ignores necessary consumer research, channel analysis, and competitive analysis.

This is clearly a launch plan that the sales department has developed without the leadership and guidance of the marketing department, showing a lack of basic market understanding.

When launching a new product, especially in companies where the sales system takes the lead (or where the sales department has more say in new product launches, unlike foreign companies with strong marketing departments), it is essential to conduct thorough pre-launch research.

So, what research should be done before launching a new product?

First, since products are sold to consumers, consumer research is undoubtedly necessary. This research should be comprehensive and objective. Often, frontline sales staff believe they understand consumers better than the marketing department because they are constantly in the market and have the most direct information. However, this perspective is often one-sided.

If salespeople are to gather consumer information, it is best to have the marketing department design the questionnaire (or content), provide specialized training, and then have salespeople conduct detailed in-store interviews during their regular business visits (without disrupting their work) across all outlets or sample points in their area. This way, the aggregated consumer information from all salespeople across all outlets is the most authentic and comprehensive.

Frontline sales staff often distrust marketing department research results, sometimes finding them completely opposite. Therefore, some large companies have begun to have frontline salespeople act as market researchers. If managed well, this can be even more accurate than marketing departments or professional research firms because the latter rely on sample points, while salespeople cover 100% of outlets, maximizing the sample size. If the research process is scientific, the results can be more accurate than those from other sources.

Consumer research primarily involves segmenting consumers. Segmentation criteria include demographic factors, geographic factors, psychological characteristics, and consumption behavior. We can list key factors relevant to the market, such as economic conditions, family structure, economic development level, sought benefits, purchase frequency, personality, and preferences, to determine what consumers want. "What consumers want—we provide" is an iron rule for new product launch research!

In the case above, the company clearly made a mistake by assuming consumers would continue their previous consumption patterns and accept the new product. They also believed economic level was the sole determining factor. In reality, the product had changed (from 10° to 8°), the brand had changed (from main brand to sub-brand), and these changes were not based on consumer perception.

Market research is often for market segmentation, which aims to support sales development by selecting a viable segment. The foundation is the diversity of consumer needs, which have different qualitative requirements.

Second, research should be conducted on the market environment, such as brand share and market capacity.

Regarding market capacity, many companies lack a systematic approach, often relying on "estimates," which can vary widely. Some companies only know current total sales volume but are unaware of the remaining sales space (market potential). Blindly entering the market leads to failure.

When I conduct training, I often do a live test on market capacity. The results show that almost no one can guarantee that their "estimated" market capacity is reliable!

Why? Because no one has truly researched market capacity, so no one knows how much sales space remains. If the market is large but saturated, or if you only know current sales but not potential sales, what's the use? Without understanding market capacity, there is no target!

As for brand share, it is fundamental information for market strategy decisions. A company's market strategy cannot be implemented in a vacuum. In an era of competition, you must "pay" for the competitive factor. Market share reflects competitiveness and competitive position. This is best illustrated by "know yourself and know your enemy, and you will never be defeated." Not understanding brand share is like shooting without a target!

Many companies now implement deep distribution or direct sales and can analyze market share weekly or even daily, but they may not know other manufacturers' shares. Therefore, before a new product launch, it is a basic step to conduct a comprehensive market share survey, either at distributors or at retail terminals.

Third, research should be conducted on competitors, including their company profiles, market operations, and market performance.

Often, competitive product research is not systematic. The key is to match competitor research with your own relevant projects to facilitate comparative analysis and derive targeted decisions and solutions.

Competitor research is not about quantity but about comparability. It reflects a market analysis method—the comparative method. This is crucial to avoid passive response and follow-up after launch. Often, frontline sales staff only scratch the surface of competitor research, ignoring the motives behind competitors' actions or the true factors behind their success.

If you want to be thorough, you can investigate factors such as channels, promotion and sales promotion, sales organization, internal execution, and market monitoring. These should be compared between your company and competitors.

Frontline sales staff are not just order takers but also market servers and information collectors. Therefore, new product launches require the most direct frontline research to complement the marketing department's research, advancing the launch to a more comprehensive level.

Conversely, what research do some domestic companies actually conduct before a new product launch? What is the overall situation?

First, it is unsystematic, with no unified reporting standards, making comprehensive analysis impossible. They solve problems as they arise, "countering moves with moves." Some even make decisions "by the seat of their pants," without any market research.

Second, the main focus is on competitors' promotions. This seems to be the biggest basis for launch analysis! But there are issues: competition-oriented but consumers don't recognize it; it leads to vicious competition...

Third, market and sales are disconnected. At this point, market and sales should be a project team, working together or meeting daily. But we still see them operating independently.

A successful new product launch can provide the most effective way for salespeople to achieve higher sales targets. However, in reality, many salespeople fear new product launches because: first, sales targets increase but new product sales lag; second, unsuccessful launches create many "aftermaths" they must resolve; third, failed launches can affect distributor confidence and even sales of existing products. Many of these issues stem from insufficient pre-launch research and hasty launches.

So, it's better to do thorough market research first! Market research is not just the marketing department's job!

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