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June 17, 2010

Two questions for evaluating a product launch strategy

How to hit the target with a product launch

What makes a good product launch? As I've written in the Harvard Business Review (in the June 2010 print edition, Interaction section, p.20):

"A company that is planning a product launch should ask not only,

How can we capture customers' attention and whet their appetite so as to maximize product sales?

but also,

How can we genuinely improve things for the customer thru a better-planned launch?.

The answer to the former question is to generate mystique and so on, while the answer to the latter is to cover as much of the customer base as possible at launch, ensure sufficient supply so that there are no stockouts, that customers can get their product without hardship, etc.

A company that focuses exclusively on the former question is likely to devise a launch that is manipulative, rather than one that genuinely meets customer needs. Apple's magic perhaps lies in it's impeccable focus on both."


This was originally written on April 6th, as a comment on HBR Editor-at-Large Julia Kirby's post on the HBR blog, entitled Where Most New Product Launches (But Not Apple's) Go Wrong, which praised Apple's iPad launch. (HBR later decided to publish this comment in the June print edition).

Then on April 12th, Apple announced a delay in the international (i.e., outside the US) launch of it's iPad by a month.

I further wrote on April 15th,

"On April 12th, Apple announced that it is delaying the international launch of it's iPad by a month. The reason is that the iPad has been so successful in the US that it wants to delay launching the product in other countries until it's sure it can meet the demand there. In delaying the international launch, Apple risks looking a bit sloppier to some international customers, and perhaps disappointing some who had hoped to have the product in their hands sooner.

But at a second look, this decision shows extraordinary sensitivity on the part of Apple towards it's customers. The company is admitting, "Hey, we didn't know the demand would be so high in the US, which means it's likely to be high abroad as well". And by delaying the launch, the company is signaling it's keenness to ensure that it can meet that higher demand, whether at home or internationally.

Even international customers will appreciate that Apple wants to make the launch smooth for them, rather than pushing ahead and risking overburdening it's supply chain. That would likely result in stockouts forcing customers in many countries to scramble for the product and suffer the heartburn of losing out in the "race" (people are usually ok with being disappointed as long as most people around them are too, rather than feeling that they alone have got the short end of the stick - a phenomenon known as the Contrast Effect ! ).

At worst, the company can be faulted for underestimating the strong demand for the product in the US (and few customers would hold that against them !).

Importantly, the decision shows that this company asks the second question above, that a company must ask whilst planning a product launch. As I've written above this question, "how can we genuinely improve things for the customer thru a better planned launch?" ensures, among other things, sufficient supply so that there are no stockouts and that customers can get their product without hardship. And it reaffirms that Apple is indeed impeccably focused on customer need. I used to be surprised at the iconic status that this company has attained - I no longer am. "


But not so fast. A couple of days ago, the first day of the iPhone 4G's sales were marred by problems. The company did apologize to customers, explaining that the hiccups were primarily due to higher-than-anticipated demand. Perhaps the iPhone launch team (as opposed to the iPad launch team) did not quite ask the second question above. However this can hardly be held against them, given that most companies fail to ask that crucial second question. So it appears that while that company is largely impeccable, it's not entirely infallible.

These two questions are one of the findings that arise from my research over the past five years into innovation - successful or unsuccessful - in business. Interestingly, independent research from Prof. Uzma Khan and colleagues from Stanford University's School of Business appears to corroborate  the validity of these two questions.

In any case a company that genuinely asks - and honestly answers - the two questions above can hardly go wrong in it's product launches.