Solutions by Industry

New Product Introductions: A Case Study

A diversified manufacturer sought to optimize a new product launch.

  • The client used APT's Test & Learn for Stores™ to better understand how introducing a new product into the marketplace would affect the sales of its existing product line.
  • APT solutions enabled the consumer products company to quantify the full impact of the new product introduction, accounting for cannibalization effects, and subsequently, to value engineer promotion strategies in order to maximize sales.
  • The resulting highly tailored rollout strategy drove $1MM+ in incremental sales.

The Company

An international category leader with $2+ billion in annual retail sales

The Challenge

The diversified manufacturer was preparing to launch a new product and needed to understand not only how the new product performed, but also how introducing the new item into the marketplace would affect the sales of its existing product line. The client sought detailed insight into which marketing methods, across all in-store promotion and multi-media options, would deliver the greatest gross margin performance across the portfolio.

The Solution

After rolling out the new product in a first wave of locations, the client used APT’s Test & Learn™ software to measure the rollout’s impact on key business metrics.  Using Test & Learn™, the client was able to calculate the total economic impact of a full rollout of the new product, taking into account both the cannibalization and halo effects of existing products.

The client then used APT’s software to value engineer promotion strategies and identified several key ways to optimize sales performance. For example, the client discovered that endcap placements were significantly more profitable at smaller-footprint stores and that different media types were more effective in different markets in supporting sales of the new product.

The Results

The company’s management used these results to develop a highly tailored rollout strategy that optimized both in-store promotion decisions and multi-channel marketing techniques. These improvements to the rollout plan resulted in $1MM+ in incremental sales for the client.