Question

Question 3: As an engineering manager, you are in charge of launching a new product. This new product is to be marketed in the global market. Launching a new product for the global market is usually associated with high risks. How would you evaluate the risks associated with such a move? What is the maximum level of risks you would accept? Provide your answer in no more than 500 words

Answer 1

Kind of Risks which occur in the global market and their evaluation can be done as-

• Marketing Risk- if sufficient marketing- offline (BTL/ ATL) or Digital is not done, then people won’t be aware of the product, globally, and since information is not available, people won’t get converted into suspect/ prospects/ customers. So, it can be a big fail at the initial stage itself, creating huge financial loss. Evaluation can be done by understanding, which kind of marketing/ advertising works better in which country geography, who should be the right kind of marketing agencies to be engaged, what digital strategy/ search engine optimization/ pay per click/ Ad words etc. need to chosen for better marketing
• Distribution Risk- Right Channel partners/ right Distribution Centers/ Warehouses/ Sales Office for Inventory Management and a Responsive Supply Chain is crucial for any kind of business. Different geographies have different ease of accessibility/ logistics costs/ paperwork/ manpower available. Hence, when you get the right combination of above, you product will be able to more consumers, else it will get stuck to limited people/ distributors. These results in inventory block and then cash block. Assessment of right Distribution partners in each of target countries need to be thoroughly checked in-person/ websites/ case studies/ previous records etc.
• Sustainability Risk- this kind of risk can appear if adequate measures are not taken, post product launch, in context of adequate working capital required to commence business operations further, maintain the right volume of distribution/ continued advertising or marketing/ trade promotions/ sales promotions. Then the product won’t survive much longer in the market. Hence, at least an approximate estimate of funds is required here to see how much further investment needs to made to keep the product going at the right pace in the market ( as it is in introduction stage in the market, so initial expense is high and profits are low)
• Demand Risk- This should be ascertained before the product launch very properly by right Market Research, either in house or by research agency, as about the Demographics and Psychographics, as in what kind of customers can be the prospects for my product/ which all countries/ regions should I specifically target/ do I need to make specific differentiated marketing strategies and arrange logistics and distribution for all these segments of customers or a single mass marketing would do/ at what frequency and approximate volume would these customers be interested to buy my product. If above assessments are not done properly, it can result in catastrophic financial loss. Even further aid of funds, to market the product, will not result positive.

I will consider all above risks, when making a product launch, as it is a 360 degree blanket, which keeps the financial loss minimum, and can give right boost towards success of the launch.