SUCCESSFUL STRATEGIES FOR PRODUCT RELIEVERS

Companies' financial strength and market position depend on successful new product introductions, which, in turn, depend on successful produ ct rollovers. Given the low success rate of product rollovers, compani es need a formal process to plan and coordinate product rollovers and to reduce risk. This article presents a framework to help companies ma nage product rollovers, choose the best rollover strategy, and improve product rollovers. Companies need to plan their rollovers early, when they are planning the new product's introduction. First, they choose a primary rollover strategy, based in par? on assessment of the uncert ainties associated with the product's manufacturing, delivery, and mar ket potential. Then they monitor product and market conditions. Finall y. as product and market conditions change, they adopt a contingency s trategy if necessary. Companies can consider two primary strategies fo r product rollovers. Solo-product roll, a high-risk, high-return strat egy, aims to have all the old products sold out worldwide at the plann ed new product introduction dale. The less risky dual-product roil pla ns to sell both old and new products simultaneously for a period of ti me and can be implemented in a variety of ways. If changed product and market conditions increase the product's risk, companies can choose f rom among four contingency strategies: making significant price markdo wns, postponing the new product's introduction, introducing the new pr oduct earlier than planned, or combining two or more dual-product-roil strategies. Finally, while contingency strategies enable companies to modify their primary strategies if appropriate, companies can improve their product rollovers significantly by exploiting opportunities to reduce the product and market risks of each new product in the first p lace.