German Research Highlights Strategies for Successful Product Launches

Researchers at ESMT Berlin, a German business school, have unveiled new strategies for companies to enhance the success of their product launches. The study, conducted by Tamer Boyaci and Huseyin Gurkan of ESMT Berlin and Soudipta Chakraborty from the University of Kansas School of Business, identifies key approaches tailored to different market perceptions.

The research emphasizes that a firm’s product launch strategy should be informed by the market’s view of both the product and the company. Effective strategies might include engaging with demanding reviewers or conducting rigorous pilot tests to ensure a successful launch.

Boyaci, a professor of management science at ESMT Berlin, and his colleagues note that many firms currently opt to release product information to a select group of customers. This is typically done through public pilot tests, giveaways, or by leveraging opinion leaders and influencers to share product reviews with a broader audience.

The study raises critical questions about the types of reviewers companies should target and the nature of the pilot tests they should conduct. The researchers propose three key strategies, contingent on the characteristics of the firm’s potential customers.

The first strategy is suited for markets dominated by brand loyalists, akin to the customer bases of companies like Apple or Nike. In such markets, firms can rely on their strong brand image and customer loyalty, reducing the need for extensive reviews or public pilot tests.

For markets dominated by skeptics, often seen with new, innovative, or sustainability-focused products, companies are advised to engage objective reviewers and perform comprehensive pilot tests. This approach helps in convincing skeptical customers of the product’s quality, thereby increasing the likelihood of purchase.

In polarized markets, where neither fans nor skeptics predominate, the researchers suggest a more counterintuitive strategy. Companies should collaborate with highly demanding reviewers or implement challenging pilot tests. Positive feedback from such rigorous evaluations can alleviate customer concerns about the product’s quality, while negative feedback from demanding tests does not necessarily imply poor quality.

“Companies with new products have always sought opinion leaders to pass their products onto first, whether it’s book reviewers, magazine editors, or the more prominent social media influencers we see today,” said Prof. Boyaci.

Prof. Gurkan added, “It’s easy to assume that much exposure for your product with influencers is a good thing as it pushes demand up further, but this is a tricky game, and companies must be more considerate in their product launch approaches.”

The researchers conclude that understanding the target audience and potential customers’ perceptions of both the company and the product is crucial. A deeper understanding can help prevent a negative backlash or a lack of demand due to insufficient awareness.

This study provides valuable insights for companies looking to optimize their product launch strategies in a competitive and ever-evolving market landscape.