Using SWOT Analysis For New Products
This article discusses how a SWOT analysis can influence a new product in respect of the four pillars of marketing: pricing, product, promotion and place.
Each product has a life cycle, the basic stages in the product life cycle are:
- Maturity and
Because most companies understand the different product life cycle stages and that products have a limited lifespan they invest heavily in new product development, so as to ensure that their business continues to grow. One of the most crucial stages of any product is just before the introduction stage, the Analysis stage. Effective analysis of this stage determines the length of the product’s lifespan as well as its success. However, before a company is ready to introduce a new product or service there is need to carry out a SWOT analysis for a new product. This is of importance so as to analyze the four marketing pillars required for the launch of a new product; the four pillars of marketing are:
- Promotion and
- Place of sale
There is thus need to analyze and examine the strengths, weaknesses, opportunities and threats of the product and as a result this will minimize the company’s risks as well as maximize company’s resources before the product is introduced to the world.
New Product Strengths – the product must be designed on the basis of satisfying the need or demand of a specific target market. The meeting of such a demand must be done with unique selling benefits. The product strengths may include the following:
- Perceived value
- Customer service
- Unique features
- Online or retail store availability
The strengths will influence the manner in which the product is marketed. The focus will be on the unique benefits of the product and not just outlining the features of the product. The strengths will also have a bearing on pricing in that if the company has an established reputation of high quality and premium priced products this gives allowance for the price of the product during the introduction stage of the product life cycle and a reduction in such pricing as the product reaches the decline stage.
New Product Weaknesses – a weakness does not necessarily mean there is something wrong with the product but can be an indication that your competitor has an advantage you have to overcome. For example, if your product is better or as good as your competitor and competitively priced but the competitor has a large market share, an option may be to market the product by using free sampling of the product or getting endorsements from trusted individuals.
New Product Opportunities – because the product is new there is an in built opportunity, this is because of early adopters and influencers who like to be the first to try the hottest new thing. Thus this is an opportunity as there is a ready market available. Also if your overhead costs are lower than that of a mature competitor, you might price yourself more competitively.
New Product Threats – once the product is on the market your competition will react. The biggest threat is thus your competition changing the playing field. Therefore, ensure you have a backup plan for pricing, promotion and distribution channels to respond to any changes by your competitor.