Process of introducing a new product onto the market
Commercialization or commercialisation is the
process of introducing a new
product or
production method into
commerce—making it available on the
market. The term often
connotes especially entry into the
mass market (as opposed to entry into earlier
niche markets), but it also includes a move from the
laboratory into (even limited) commerce. Many technologies begin in a
research and development laboratory or in an inventor's workshop and may not be practical for commercial use in their infancy (as
prototypes). The "development" segment of the "
research and development" spectrum requires time and money as
systems are engineered with a view to making the product or method a paying
commercial proposition.
The product launch of a new product is the final stage of
new product development – at this point
advertising,
sales promotion, and other
marketing efforts encourage commercial
adoption of the product or method. Beyond commercialization (in which technologies enter the business world) can lie
consumerization (in which they become
consumer goods, as for example when
computers went from the laboratory to the enterprise and then to the home, pocket, or body).
Process
Commercialization is often confused[by whom?] with
sales, marketing, or
business development. The commercialization process has three key aspects:
The funnel.[1] It is essential[citation needed] to look at many ideas to get one or two products or businesses that can be sustained long-term.
Commercialization is a stage-wise process, and each stage has its own key goals and milestones.
Proposed commercialization of a product can raise the following questions:
When to launch: Factors such as potential cannibalization of the sales of a vendor's other products, any requirement for further improvement of the proposed new product, or unfavorable
market conditions may operate to delay a product launch.
Where to launch: A potential vendor can start marketing in a single location, in one or several
regions, or in a
national or
international market. Existing resources (in terms of capital, and operational capacities) and the degree of managerial confidence may strongly influence the proposed launch-mode. Smaller vendors usually launch in attractive cities or regions, while larger
companies may enter a national market at once.[citation needed] Global roll-outs generally remain the preserve of multinational conglomerates, since they have the necessary size and make use of international distribution systems (e.g.,
Unilever,
Procter & Gamble). Other multinationals may use a
"lead-country" strategy: introducing the new product in one country/region at a time (e.g.
Colgate-Palmolive).[citation needed]
How to launch: Prospective vendors should decide on an
action plan[citation needed] for introducing a proposed product - a plan shaped by addressing the questions above. The vendor has to develop a viable
marketing-mix[citation needed] and to structure a corresponding marketing-
budget.
References
Jolly, Vijay K.(1997): Commercializing New Technologies: Getting from Mind to Market; Harvard Business School Press. [Note: a new edition was due in early 2009.]
Notes
^
Compare: Rafinejad, Dariush (2007).
"5: The Product Development Process". Innovation, Product Development and Commercialization: Case Studies and Key Practices for Market Leadership. J. Ross Publishing Innovation Series. Fort lauderdale, Florida: J. Ross Publishing. p. 160.
ISBN9781932159707. Retrieved 2016-11-24. Wheelwright and Clark, Iansiti, and Christensen have discussed a 'funnel' framework for product development. In the funnel framework [...] the market/competitor analysis, target customer needs, and technology assessment establish the basis for concept development - the first phase of the process. The next phase is the product/process design, which leads to the product launch and commercialization phase.
Further reading
Clemens, F. et al. (2003): Xelibri: A Siemens Mobile Adventure; case study of WHU School of Management, Vallendar, Germany; distributed by ECCH Collection, England and USA.
Dibb, S. et al. (2001): Marketing – Concepts and Strategies; Fourth European Edition Houghton Mifflin; Boston.
Jobber, D. (2001): Principles & Practice of Marketing; Third Edition McGraw-Hill; London.
Kotler, P. et al. (1996): Principles of Marketing; Fourth European Edition Prentice Hall; Harlow (UK).
Lancaster, G. and Massingham, L. (1999): Essentials of Marketing; Third Edition McGraw-Hill; London.