Page 336 - Foundations of Marketing

Developing and Managing Goods and Services | Chapter 11 303

the new product. Another low-cost promotional tool is product reviews in newspapers and
magazines, which can be especially helpful when they are positive and target the same cus-
tomers.
Products are not usually launched nationwide overnight but are introduced through a
process called a rollout. Through a rollout, a product is introduced in stages, starting in one
geographic area and gradually expanding into adjacent areas. It may take several years to
market the product nationally. Sometimes, the test cities are used as initial marketing areas,
and introduction of the product becomes a natural extension of test marketing. A product
test-marketed in Sacramento, California; Fort Collins, Colorado; Abilene, Texas; Springfield,
Illinois; and Jacksonville, Florida, could be introduced first in those cities. After the stage 1
introduction is complete, stage 2 could include market coverage of the states where the test
cities are located. In stage 3, marketing efforts might be extended into adjacent states. All
remaining states then would be covered in stage 4. Figure 11.2 demonstrates these four stages
of commercialization.
Gradual product introductions do not always occur state by state; other geographic com-
binations, such as groups of counties that cross state borders, are sometimes used. Products
destined for multinational markets also may be rolled out one country or region at a time.
For instance, Sky Zone (a company marketing locations fi lled with giant trampolines on
which people can pay to play dodge ball, take fi tness classes, or simply jump around for
$ 13 per hour) fi rst opened in Las Vegas, Nevada. After realizing success there, the com-
pany tested in St. Louis and Sacramento. It now has arenas scattered across the United
17
States and one in Ontario, Canada. Gradual product introduction is desirable for several
reasons. It reduces the risks of introducing a new product. If the product fails, the fi rm
will experience smaller losses if it introduced the item in only a few geographic areas than
if it marketed the product nationally. Furthermore, a company cannot introduce a product
nationwide overnight because a system of wholesalers and retailers necessary to distribute
the product cannot be established so quickly. The development of a distribution network
may take considerable time. Also, the number of units needed to satisfy national demand

Figure 11.2 Stages of Expansion into a National Market During Commercialization

NH
ME
WA VT
MT ND
MN MA
WI NY
OR SD MI RI
ID CT
WY PA
IA NJ
NE OH
IL IN DE
NV WV MD
UT
CO KS VA
CA MO KY DC
TN NC
OK
AZ NM AR SC
MS AL GA
TX
LA
FL
HI
Test cities and Stage 1
AK
Stage 2 Stage 3 Stage 4

From Pride/ Ferrell , Marketing 2014, 17E. 2014 Cengage Learning.

Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.