Two Different Approaches to Product Launches
Anyone involved in product development knows that it can be a high risk game. No company launches a new product with hopes that it will receive mediocre, or worse, no response…at least not intentionally. Sometimes, when you “swing for the bleachers”, you strike out.
Recently, The Motely Fool compared the vastly different “go to market” strategies of Apple and Samsung. Apple takes a deep approach by offering fewer cellphone models but invests heavily in offering feature rich, user centric designs (in the interest of full disclosure, I am an iPhone user). In contrast, Samsung takes a broader approach. Samsung launches a wider range of products at varying price points to see which products gain traction with cellphone users. In essence, they swing at anything in hopes of making a solid hit.
The two brands combined own over 50% of the cellphone market. That leadership position allows both Apple and Samsung to “strike out” every so often and still be All Star players. But most companies aren’t in that position in their markets. That’s when market sizing research can be tremendously useful.
In short, market sizing is the process of estimating the potential of a market. Using a wide variety of secondary market research sources and databases, information is synthesized to help define:
- the total size (or potential size) of a market
- the major competitors in a market by category
- the composition and profile of a target customer
- the products/services available in the market
- the most significant trends in the market
Developing a market size estimate is a critical first step in building the business case for any new product development initiative. The amount of investment required to be successful needs to make sense given the potential return that the market offers.
Before you throw the first pitch in a new product launch, consider investing in market sizing research. It lets your product launch with the bases loaded.