Launching a product in the Agrochemical Industry: a 5-stages process
Jun. 19, 2020
Author: Guillermo Sáez, a goal-oriented Product Manager, Business Intelligence, and data-driven professional with 8 years of multinational work-experience
Taking advantage of my time during this pandemic, and after finishing 2-years of studying here in the U.S., I have decided to start writing about things that I have learnt throughout my 10-years of professional career. Having said that, in this first chapter, I will show a glimpse about the process of launching products in the agrochemical industry and the complexity involved in it.
As many people may think, launching a product into the market involves a complex setup in order to achieve that goal. In that sense, this interconnected machinary must be oiled and streamlined so that each participant in it understands its crucial role to ensure the success of this process.
Now, before jumping to the core part of this article, we must focus on two soft skills before going further explaining the stages and departments involved when we are launching a product in an agrochemical industry. The first one is stakeholder management; this soft skill is crucial to ensure that each department works harmoniously avoiding delays and sharing timely information to each participant within the process. The second is effective communication of the process; this guarantees a common understanding of each participant's roles, ensures common knowledge about the risks involved if any mistake occurs during the process, and provides clarification about the potential impact at the end of the process if any mistakes occurs during it. Having that in mind, let's move on to the process itself that allows me to clarify several points and show the real complexity behind of this truly piece of art, which is Launching a Product.
Launching a product: a 5-stages process
Stage 1: Pipeline review
In this first stage, each company must review a set of alternatives available to address a market need. For instance, if we are talking about fungicides, we may consider the following: the crop, the disease, the number of competitors available in that segment, active ingredients, mode of action, mechanism of action, maximum residue level (MRL), safety label, patent status, the cost, production scalability, and so forth. Afterwards, in a multidisciplinary group that includes areas such as marketing, sales, research and development (R&D), and regulatory affairs, must select the best option available based on many of these factors. Now, what happen when we talk about a big R&D company, well in those companies, the likelihood of having a strong product pipeline with several options to address one or more market needs is remarkably high. On the other hand, a company specialized in generics, has limited options, and the number of possibilities will increase depending on the size of it (the bigger the better). In generic companies, the process to select a product will include a KPI focused on knowing when the patent protection of the active ingredient of a product will end and how many other generic companies are willing to attack that market segment. In consquence, many of those companies have a database that allow them to know to know exactly when the patent of a specific active ingredient will be lost and which companies are interested that molecule. One interesting fact is that R&D companies' pipeline include a highly number of off-patent active ingredients and a low number of patented active ingredients, often mixed so that can extend the life of off-patent molecules (process known as product life cycle managment or PLCM). Moreover, the proportion of generic products in those companies range from 90% to 98% of its products, you can check any R&D company's website to see its products and validate it.
Stage 2: Task and process alignment
In this stage, after carefully chosen a product, we need to focus on how we organize a multidisciplinary team to achieve the goal of launching a product. An important fact I have to mention is that the flowchart I show you above is a representation , in my opinion, about how the process should be done. However, this may change depending on the company’s size and resources. For instance, some generic companies do not have enough resources to have separated roles, and thus, they tend to merge two or three roles in one. For example, a company can have a marketing manager that includes R&D and sales responsibilities. On the other hand, a Big R&D company, which is highly likely to have more comprehensive structure of its roles, may be more aligned to the flowchart I draw above. Nevertheless, the concept is the same and apply to both types of companies. Now, let’s continue talking about the task alignment and explain why this important. Imagine that you have a 3-years span to launch a product into the market, but one of the process takes exactly 2.5-years to be completed, if this process requires a task that starts later, let say 6-months, it will create a bottle neck, risking the whole process and you might postpone the launch of this product and affecting the sales of the company - allowing competitors to take away that value from you. Just remember, something as simple as creating a product-code late in your system can affect forecast process, which will impact to supply the product on time into the market and, consequently, impacting the product launch. The reason behind this is because you did not send the signal to the main plants or suppliers to prepare themselves to generate or buy the product raw-material needed to elaborate the final product. Another relevant process occurs in regulatory affairs, here no company can be saved from waiting to obtain the approval from authority to commercialize the product. The problem here lies in that the period of registering a product vary depending of the country, ranging from 6-months (Dominican Republic) to approximately 10-years (Costa Rica and Europe). Therefore, planning here is crucial and your regulatory affairs team must present the dossier of your product without any errors in order to manage something that is beyond your control and can impact in your process dramatically. In consequence, after these examples you may consider creating a robust multidisciplinary team from day one in order to follow up the launching process to minimize unnecessary risks.
Stage 3: Technical Product positioning
This is stage is the most important of the process because if your sales team do not know the technical attributes of your product how you can be sure that they will not defend its value when it enters the market. Since this stage involves many technical concepts, I decided to simplify them just to allow readers to understand the big picture of it: First, you need to know how your product perform under low-disease pressure and high-disease pressure conditions because knowing this, it will help your sales team to recommend accurately the product to the grower. Something I did not mention before, but is important to mention it now is that in stages 1 and 2 your multidisciplinary team defined the product dose (or rate); this may vary depending of the extent or pressure of the disease, which it will depend on each country. Therefore, in stage 3, your regulatory affairs team already sent the dossier of the product to the regulatory authority of your country and changes of this documentation will delay the product launch for a few years. Thus, if you did not do well that part of the process, it won’t matter what you do in this stage because in the long-run your product won’t succeed in the market because it can harm the crop due to an either overdose or underdose of it. Second, you need to know when to apply your product, in consequence you need to know the crop stages (phenology) because remember that your job is to help growers to increase their crop's yield by protecting their crops. Third, mode and mechanism of action and product formulation of your product will help to tell you how and when to apply your product and the impact of it in the crop disease (remember that I’m using as an example of a new product a fungicide). For further information you can go to fungicide resistant committee website (https://www.frac.info/).
Then, after your commercial team (marketing and sales - mid to senior management) knows exactly how the product works, you must start defining the logo of the product (in big multinationals is almost always predefined), your brand communication campaign (it will be predefined as well, based upon the brand architecture policies the company may have, however often is adapted to the countries customs in order to increase its impact), channel strategy (which includes strategic locations, rebates programs, training, etcetera), and set the price of the product; where value-pricing technique has shown to be an effective tool to extract the maximum value of a product – "This is going to be part of my second chapter of these articles I’m writing on for next week". On the other hand, you need to start sending signals to your supply team that you may need raw materials for elaborate your product and then launching it. Thus, if your company uses an ERP, I think you are already familiarized with the concept of campaign event, which allows the company to start allocating resources to either acquire raw materials or produce them to elaborate the product. One important thing that I have to mention is that your supply and planning team are leaders of the S&OP process, which is the main instance to share this information - most of the agrochemical companies possess a Sales and Operation Plan process (S&OP). Finally, in this stage you need to know when start showing the product in your forecast, in order to do so, you will need your product code (launched in stage 2) to reflect that on your ERP system. What happen if you do not have the code, well it is highly likely that you should delay your product launch for a couple of weeks, months, or even a season (it will depend the campaign production scheduled of your supply plant, that's why is so crucial setting up everything for the very beginning). In my experience, there are companies that have this code done in their initial stages such as business case stage, but some others are far away from that, risking their main goal - Launching the product.
Stage 4: Troops' Alignment
Now we are getting closer to the final stage of the process, so we know that is crucial that all-players be on the same page about the product, your commercial team must have demo plots in place to show growers how good your new product is, and your sales team need to know exactly what to say and not to say about the product. That’s why I always recommend to set here, in this stage, a final meeting where your team can review each point of your check list of steps for launching a product (remember that this check list may vary among companies, but at the end, they convey at the same point). One extremely important thing I have to mention is that your sales team must be fully engaged with the product, hence, to acchieve that, your marketing team must elaborate, carefully, high-impact presentations to explain in-detail the benefit of this new product: The value proposition of your product. This one must consider technical aspects, brand reputation, pricing, distribution channels, brand communication, customer service, and explain briefly but, carefully, the key differentiators of your product and why is better to use it instead of other alternatives. In this part, companies have different brand model structures, but all of them are focused on the same, so the recommendation here is work on your check list and review it carefully because you are about to launch your product in a few months from now (ideally from 3 to 6 months), so now is the time for planning the launch product event working with all-players on the same page.
On the other hand, by now, we already have the product in our forecast system for at least 6-months ago, so we have to make a decision: Do I have to consider this product in my budget? The answer to this question is: "it depends". A rule of thumb in this in the industry is that if the product launch is going to be in the first 6-months of your fiscal year, the answer is "Yes," you must consider your product in your budget. Conversely, if your product launch is planned for the third or fourth quarter of your fiscal year, the answer change as closer you are at the end of your fiscal year. But why, well this is a risk and reward situation, so the closer to the end of your fiscal year, the riskier is that something out of your control happens. However, if the product is used only in one season of the year, which is in those quarters, you may reconsider that. That is why commercial team and finance team must be on the same page from the very beginning.
"As you can see everything is interconnected"
Stage 5: Product Launch
In this final stage you already have everything you need: Product pipeline reviewed, team task and process alignment, technical product positioning, and troop's alignment with the value proposition. At this point, you already organized your marketing team to work with your advertising agency to ensure an awesome product launch event, you invited the right people, you are connected with field experts (external advisers) within the industry, you spoke with your HR team about the resources needed whether you need extra people (sales promotors) to impulse your product sales even further, you launched your marketing campaign in the digital environment (inbound) and in your regular ones (outbound). In consequence, if you did your steps correctly in your previous stages, and your company received the registration approval of your product from the regulatory authorities, you are ready to go and enjoy the party. However, you cannot forget that feedback is always needed, so it is highly recommended to monitor this product launch, for at least, 3-years because that information is crucial to improve your process and the next ones. Additionally, In my opinion, you may need a customer relationship management tool (CRM) to help you out during this final stage, I know that this is something already happening in several companies within the industry; some of those started recently and others started 3 or 4 years ago. However, probably this tool is focused in other things rather than launching a product, which is from my perspective, where this can be extremely impactful.
In this final stage you already have everything you need: Product pipeline reviewed, team task and process alignment, technical product positioning, and troop's alignment with the value proposition. At this point, you already organized your marketing team to work with your advertising agency to ensure an awesome product launch event, you invited the right people, you are connected with field experts (external advisers) within the industry, you spoke with your HR team about the resources needed whether you need extra people (sales promotors) to impulse your product sales even further, you launched your marketing campaign in the digital environment (inbound) and in your regular ones (outbound). In consequence, if you did your steps correctly in your previous stages, and your company received the registration approval of your product from the regulatory authorities, you are ready to go and enjoy the party. However, you cannot forget that feedback is always needed, so it is highly recommended to monitor this product launch, for at least, 3-years because that information is crucial to improve your process and the next ones. In my opinion, you may need a customer relationship management tool (CRM) to help you out during this final stage, I know that this is something already happening in several companies; some of those is recently and others started 3 or 4 years ago. However, probably this tool is focused in other things rather than launching a product, which is, in my opinion I think is where this can be extremely impactful.
To wrap up, I want to tell you what I told you in this article I wrote: Remember, launching a product may look pretty easy on paper or power point, however is an extremely live and complex process that relies on many people within an organization. Therefore, the best advice I can provide you to ensure the success of this piece of art is by putting your soft skills such as stakeholder management, effective communication, and empathy in place because you may need to work in cross-functional teams where people priorities may change or the people who work in those processes have other priorities that are totally different than those of yours. Thereby, my final recommendation, in nutshell, is to follow the 5-stages and put your soft skills in your maximum to maximize the benefit of your company.
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