4. CASE STUDY
4.3. Launching new products in the case company
As it was discussed before launching new product to the market is complicated process which includes many steps, risks. In order not to avoid mistakes all employees of the case company passed Design for Six Sigma (DFSS) training.
The tools of DFSS are widely used while launching new products on all the stages.
The case company is positioning its’ products mostly as a LUX-products in a premium segment. This way, the average price for products is higher comparing with main competitors.
Target customer segment
The target customer segment for the company itself and for the product of the safety department is large companies operating on the market. The share of such customers is nearly 70% from the overall sales. In the Russian market such companies are the main producers of milk and meat products – “Wimm bill dann”, “Cherkizovo”, “Mirotorg”. The second big niche for the case company is big chain stores. These are stores selling food products – “Metro”, “Lenta”.
The case company is planning to enlarge target client segment by expanding to the niche of cafes and restaurants. The main fast food restaurants operating in Russia are “McDonalds” and “KFC”. Another possible target client is “Shokoladnica”.
The network of cafes “Shokoladnica” is one of the largest and fastest growing companies in the restaurant business in Moscow and other regions of Russia.
The most important characteristics of the product for the target clients were discussed. Findings have shown that such characteristics as price of the device, price and speed of making tests are important. Among all the easiness of use was defined as key factor which influence on the decision of buying.
Service center in Russia was depicted as another important factor which customers pay attention while making decision to buy. The case company has such center in Moscow.
After surveys it was concluded that Russian market is representing the high potential for the launching the luminometer device. The amount of companies which are mostly likely to buy the device is growing. It is also connected to the more strict norms of cleanliness applied by government to the food factories.
Advertisement
Due to the orientation of the food safety department mostly on companies the ordinary ways of advertisement through TV or radio are not effective.
Food safety department is organizing collaborative activities with state agencies responsible for the safety of food (e.g. Dairy Institute). It is made to educate future professionals who will have to deal with the equipment produced by the case company in their work. The other ways of promotion are seminars and lectures for potential clients. It also includes sharing video materials with the usage and characteristics of products.
One of the advertisement ways considered by the case company is the cooperation with bloggers. This way was used by the competitors and helped to make their product well known.
Among all company is collaborating with the main TV channels which have programs connected to the food safety topics. The examples are “CHANNEL ONE RUSSIA” and “NTV”. In such programs the product of the company was shown in actions, all main characteristic were described.
Main problems
The main source of problem while launching new product was discussed.
According to the marketer of the case company it is that all target clients are already using older versions of their products. This way the incremental innovative product which company plan to launch to the market is not presenting the interest for their target customers. High price for the new product and good quality of the old ones are becoming barriers while launching new product.
Despite the fact that the АТР (Adenosine triphosphate) technology which is the base of the device is used in the previous versions of the device it is still not common and not know among Russian customers thus not trusted.
Despite the common opinion that political situation could have influenced the case company, it proved it wrong. Anti-Russian sanctions and the Russian response
with an embargo law have helped the food safety department to increase its’ sales.
Due to the fact that the competition on the Russian market of diary and meet product suddenly disappeared, new local factories were organized. Such producers are the main target segment of the case company what became the key factor of sudden growth in sales.
Competitors
The case company is a big player in Russian market. The brand is well known and recognized. Nevertheless, the luminometer device which is planned to be launch to Russian market already has a strong competitor.
Hygiena Company is providing device based on the АТР technology which allows making quick test of the surfaces. The device of the competitors is targeting the same customer segment as the case company product.
The ways of advertisement applied in the Hygiena Company are very close to ones in the case company: seminars, forums, conferences, exhibitions and representation of product at the famous TV programs.
The main advantage of the Hygiena Company comparing to the case company is their price. The competitor’s device is cheaper, so that can attract potential customers. Nevertheless, the price for usage of the devices and making tests is higher, that increases the price of the devices in long-term perspective.