The launch of a new product certainly requires investment in R&D but also in marketing. Better yet, to ensure commercial success, marketing should guide the development of new products/services and therefore be done in parallel (it is called ‘concurrent engineering’). In a recent ExoLab study on the ITC sector, we learned that the industry in Quebec is innovative. However, for its ability to successfully launch new products, it seems mixed.
On May 14 and 15, 2015, the AQT (Association québécoise des technologies) held the Big Bang conference, an annual event bringing together the ITC sector, to discuss sales and marketing. Lynda St-Arneault attended the occasion and presented the findings of the latest study from ExoLab on the sector and its Quebec sales and marketing practices. Here are the highlights.
The results of the study showed that 56% of respondents would invest a budget of 6% or less of their turnover, which is clearly insufficient. A budget of about 7 to 12% would be necessary to adequately support marketing activities, particularly in launching products. These percentages are obviously higher if a company included the salaries in its marketing budget.
New product sales goals
87.5% of respondents claim to have marketed a new product/service over the last 3 years. In addition, more than half say they launch a new product every year. This certainly shows that this is an innovative industry!
However, when asked whether they had achieved their sales targets at the launch of their product, only 13% claim to have reached or exceeded it and, 57% were rather vague when talking about their results.
To sum it all up: ITC does a lot of R&D and frequently introduces new products/services: 53.5% will launch 1 new product per year. What was learned? Mixed results in terms of sales.
R&D and marketing to optimise the launch of new products
To maximize the chances of successfully launching new products, marketing efforts need to be set in motion throughout the process. By marketing efforts, I mean marketing research (ex: organizing focus groups with potential customers at the beginning, during and after, doing research of secondary data, etc.) and, to prepare a deployment of specific products.
Did you know that according to the degree of a new product, for every dollar invested in R&D, 5$ must be invested in marketing? That much you ask? Oh yes! In fact, the main challenge facing your new product/service will be of a commercial nature, not a technical one.
The employee methodology
147 SMEs in the ITC sector participated in web and telephone surveys. A confidence level of 95% was used for an error margin of 8%.
Want to know more? Download the complete study now (French only, for now!).