Commercialization is the process or cycle of introducing a new product or production method into the market . This actual launch of a new product is the final stage of new product development, and the one where the most money will have to be spent for advertising, sales promotion, and other marketing efforts. Commercialization is often confused with sales, marketing or business development. The commercialization process has three key aspects:
Commercialization
Bringing new products to market will require creative marketing techniques to achieve success like Red Bull did by creating mascot automobiles.
- It is essential to look at many ideas to get one or two products or businesses that can be sustained long-term. This is often known as the funnel.
- Commercialization is a stage-wise process, and each stage has its own key goals and milestones.
- It is vital to involve key stakeholders early on, including customers.
Commercialization of a product will only take place if the following three questions can be answered:
- When is the appropriate time to introduce the product? When facing the danger of cannibalizing the sales of the company's other products, if the product can be improved further, or if the economy is down, the launch should be delayed.
- Where is the appropriate market to launch the product? It can be in a single location, in several regions, or it might be more appropriate for a national or international market. This decision will be strongly influenced by the company's resources in terms of capital, managerial confidence and operational capacities. Smaller companies usually launch in attractive cities or regions, while larger companies enter a national market all at once. Global roll outs are generally only undertaken by multinational conglomerates, since they have the necessary size and make use of international distribution systems. Other multinationals use the "lead-country" strategy by introducing the new product in one country/region at a time.
- To whom will the product be targeted primarily? These primary consumer groups should consist of innovators, early adopters, heavy users and/or opinion leaders. This will ensure adoption by other buyers in the marketplace during the product growth period.
The company has to decide on an action plan for introducing the product by thinking about the questions above and making informed decisions. It has to develop a viable marketing mix and create a respective marketing budget.