Amazon Ads releases thought-paper on key strategies for new product launches

Amazon Ads has unveiled a comprehensive thought-paper on new product development strategies, aimed at guiding brands to success in product launches. Kapil Sharma, Director - Growth Business at Amazon Ads, presented this framework at the exchange4media D2C brand summit, drawing on Amazon’s extensive experience working with thousands of brands.

Sharma emphasized the importance of new product launches in driving business growth, stating, “New product launches contribute to 50% of the annual revenue of most brands across industries.” He noted that brands may have various reasons for launching new products, such as filling market gaps, expanding customer bases, or phasing out older products.

The thought-paper proposes a framework based on two key dimensions: category focus and business objective. Sharma explained, "Based on these two dimensions, we identified four effective strategies for new product launches: Refresh, Extend, Innovate, and Expand."

The Refresh strategy involves adding new features to existing products or re-launching them entirely. “This approach is often seen in industries with dynamically changing consumer preferences, such as apparels or smartphones,” Sharma elaborated.

In the Extend strategy, brands introduce new variants of an existing product. Sharma offered an example: “A smartphone company might extend its product line by launching a wearable device, such as a smart ring.” He cautioned that marketers must carefully craft their communication strategy to avoid diluting the brand identity.

The Innovate strategy encompasses both breakthrough and disruptive innovations. “In breakthrough innovations, brands can capitalize on their market leadership and first-mover advantage. Disruptive innovation, on the other hand, is about reaching as many customers as possible by offering cost-effective solutions,” Sharma explained.

Finally, the Expand strategy is for brands looking to enter a completely new product line. “Expand is a long-term strategic bet, and it requires a well-thought-out approach to ensure success in a new category,” Sharma advised.

Timing and frequency are crucial in product launches. Sharma noted that launch frequency should align with brand goals and market conditions, varying from quarterly for Refresh strategies to every few years for Expand strategies.

The product launch process is divided into three critical stages: pre-launch, launch, and post-launch. During pre-launch, Sharma emphasized, “It is helpful if brands communicate how a new product will meet customer needs and why it is beneficial in the long term.” The launch phase focuses on driving trial and awareness, while the post-launch phase determines long-term success. “Brands must gather customer feedback from the launch phase and use it to refine the product and customer experience. Post-launch strategies should shift towards a combination of awareness and performance marketing to ensure long-term business sustainability,” Sharma added.

Amazon Ads provides solutions for each phase of the product launch. Pre-launch solutions include immersive content and custom landing pages. Launch solutions involve Amazon DSP and on-package advertising. “With solutions like Amazon Live and sponsored brands, marketers can effectively communicate their product's unique value proposition to target audiences,” Sharma noted. Post-launch solutions feature tools like sponsored display ads and retargeting capabilities.

Sharma concluded, “While this presentation offers a brief overview, the thought-paper contains more in-depth insights and examples to guide marketers and brand owners in their product launch efforts.” This comprehensive framework offers brands a roadmap to successfully navigate the complexities of product launches, leveraging the right strategy and Amazon Ads' solutions to engage relevant audiences effectively at every stage of the launch process.