Reflection – Learning Launch

Challenge

My consulting firm has been approached by a local alcohol beverage producer to help expand  internationally. Their leading brand, aromatized wine, enjoys double digit growth on the  domestic market, successfully defends its market position versus international competition and  is market leader with a substantial margin to the next in same category. Having all local sales  and customer data available necessary to make a well-founded decision, the company needed  a confirmation of the decision on starting its expansion on the largest market. The market was  not developed in the category, no substantial investments in promotion and advertising, low  brand awareness, premium pricing level, two brands and none with clear leading position;  limited distribution, high seasonality. The actual challenge was to replicate the domestic  success and ensure a profitable operation already in year one.

Selection

We have decided for this process to try the Learning Launch Tool. With this tool we wanted to  test customer data available projected on a new market in 4D (3D is data and experience  available projected to new market conditions = 4D).

Application

We have defined three categories to learn from: consumers & customers; promotion and  operations. From consumers we wanted to know how they will perceive the new product in  terms of taste, preference to existing products, will this lead to increased consumption vs. other  categories of alcoholic beverages and price acceptance level, especially in HORECA segment.  Will the established promotional approach motivate consumption, do we need to include new  channels and tools, and will the allocated budget be sufficient. Does local distributors have the  desired capabilities to support planned operation and is this financially attractive to them?  For  the first two categories learning came from small scale focus groups of consumers and non –  consumers, as well. We tested our assumptions in several workshops in separate and combined  groups of consumers. In limited number of HORECA outlets we challenged our assumptions  towards listing, pricing & margin suggested, expectations on promotional activities. In the third  category, we conducted on site interviews to learn their capabilities and category fit for our  product.

Insights

Using the tool helped us identify areas to focus on and readjust our perception of the new  market. Results were very promising from consumer side and adjustment on the supply side  needed to be planned as soon as possible. Promotional efforts were not seen as sufficient for  the market especially for a challenger brand, booth in channels and tools planned, and budget  available. With insights on consumer acceptance further testing on side of the distributors  needed to be conducted to select best suited company as partner making the product available  in channels planned and in quantities desired. This insights will also help the distributor  calculate their own profit margin from the whole operation increasing our chances of signing

the best distribution partner.  Also, insights suggested to test acceptance of product margin with  retail and HORECA segment on a larger scale and in several regions.

Approach

International expansion is a primary focus of the company. Although we went through the  process only once so far, The Learning Launch Tool proved to be essential for receiving actual  insights helping uncover weak spots in the strategy planned. Following successful introduction  on the largest market, based on presumptions adjusted, further markets expansions will be  approached using the same tool.


Reflection – Learning Launch Challenge My consulting firm has been approached by a local alcohol beverage producer to help expand internationally . Their leading brand , aromatized wine , enjoys double digit growth on the domestic market , successfully defends its market position versus international competition and is market leader with a substantial margin to the next in same category . Having all local sales and customer data available necessary to make a well - founded decision , the company needed a confirmation of the decision on starting its expansion on the largest market . The market was not developed in the category , no substantial investments in promotion and advertising , low brand awareness , premium pricing level , two brands and none with clear leading position ; limited distribution , high seasonality . The actual challenge was to replicate the domestic success and ensure a profitable operation already in year one . Selection We have decided for this process to try the Learning Launch Tool . With this tool we wanted to test customer data available projected on a new market in 4D ( 3D is data and experience available projected to new market conditions = 4D ) . Application We have defined three categories to learn from : consumers & customers ; promotion and operations . From consumers we wanted to know how they will perceive the new product in terms of taste , preference to existing products , will this lead to increased consumption vs. other categories of alcoholic beverages and price acceptance level , especially in HORECA segment . Will the established promotional approach motivate consumption , do we need to include new channels and tools , and will the allocated budget be sufficient . Does local distributors have the desired capabilities to support planned operation and is this financially attractive to them ? For the first two categories learning came from small scale focus groups of consumers and non – consumers , as well . We tested our assumptions in several workshops in separate and combined groups of consumers . In limited number of HORECA outlets we challenged our assumptions towards listing , pricing & margin suggested , expectations on promotional activities . In the third category , we conducted on site interviews to learn their capabilities and category fit for our product . Insights Using the tool helped us identify areas to focus on and readjust our perception of the new market . Results were very promising from consumer side and adjustment on the supply side needed to be planned as soon as possible . Promotional efforts were not seen as sufficient for the market especially for a challenger brand , booth in channels and tools planned , and budget available . With insights on consumer acceptance further testing on side of the distributors needed to be conducted to select best suited company as partner making the product available in channels planned and in quantities desired . This insights will also help the distributor calculate their own profit margin from the whole operation increasing our chances of signing the best distribution partner . Also , insights suggested to test acceptance of product margin with retail and HORECA segment on a larger scale and in several regions . Approach International expansion is a primary focus of the company . Although we went through the process only once so far , The Learning Launch Tool proved to be essential for receiving actual insights helping uncover weak spots in the strategy planned . Following successful introduction on the largest market , based on presumptions adjusted , further markets expansions will be approached using the same tool .