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City, University of London Institutional Repository City Research Online City, University of London Institutional Repository Citation: Mustafa, N. (2008). The Role of Product Launch Strategy in the Creation of Sales Momentum : The Case of the Fragrance Industry. (Unpublished Doctoral thesis, City University London) This is the accepted version of the paper. This version of the publication may differ from the final published version. Permanent repository link: https://openaccess.city.ac.uk/id/eprint/8600/ Link to published version: Copyright: City Research Online aims to make research outputs of City, University of London available to a wider audience. Copyright and Moral Rights remain with the author(s) and/or copyright holders. URLs from City Research Online may be freely distributed and linked to. Reuse: Copies of full items can be used for personal research or study, educational, or not-for-profit purposes without prior permission or charge. Provided that the authors, title and full bibliographic details are credited, a hyperlink and/or URL is given for the original metadata page and the content is not changed in any way. City Research Online: http://openaccess.city.ac.uk/ [email protected] AUTHOR: NERMEEN MUSTAFA Department of Management Cass Business School City University London Thesis for a PhD Degree In management Under the supervision ofProfessor Joseph Lampel Entitled: The Role OfProduct Launch Strategy in the Creation Of Sales Momentum: The Case ofthe Fragrance Industry SUBMITTED ON: 23/10/2008 1/282 2L1...., In The name of God the merciful, the compassionate 2/282 3/282 Table of Contents: ACKNOWLEDGEMENT 6 ABSTRACT..................................................................... 8 1. INTRODUCTION 9 1.1 MOTIVATION AND AIM OF STUDY 9 1.2 CONTRIBUTION OF THE STUDy 12 1.3 DEFINITIONS OF KEY CONCEPTS 16 1.4 STUDY OUTLINE 17 1.5 CONCLUSION 19 2. LITERATURE REVIEW 23 2.1 INTRODUCTION 23 2.2 DEFINITION OF LAUNCH 24 2.3 CONTEXT OF PRODUCT LAUNCH 25 2.4 PRODUCT LAUNCH 27 2.5 DRAMATURGICAL PERSPECTIVES AND PRODUCT LAUNCH 28 2.6 PRODUCT LAUNCH PRE-ANNOUNCEMENT 33 2.7 EXTERNAL REpUTATIONAL RESOURCES 38 2.8 AFFECTIVE ADVERTISEMENT 45 2.9 PRODUCT PRICING 47 2.10 CONCLUSION 49 3. INDUSTRY BACKGROUND 51 3.1 EVOLUTION OF THE MODERN FRAGRANCE INDUSTRy 51 3.2 THE FRAGRANCE VALUE CHAIN 56 3.2.1 The Fragrance Brief 58 3.2.2 The Development Process 59 3.3 FRAGRANCE MARKET SEGMENTS 62 3.3.1 Quality and Creativity 64 3.3.2 Product Variety: Life cycles and firm types 65 3.3.3 Pricing and Distribution 66 3.4 CONCLUSION 71 4. A Model of Fragrance Launch Effectiveness 76 4.1 INTRODUCTION 76 4.1.1 Context Specific Product launch 80 4.2 THE MODEL 82 4.2.1 Strategic launch decisions 83 4.2.2 Fragrance Launch Signalling tactics 84 4.3 HYPOTHESES 90 4.4 DATA AND RESEARCH METHOD 97 4.4.1 Data 97 4.4.2 Dependent Variables 98 4.4.3 Independent Variables ·.. 100 4.4.4 Control Variables 103 1:~' 5RE:~~~~~~ ::..:.:'.::::::::::::::::::::::::::.::'.::::'.:'. :'.: .:::'.:::: :: .. .i.:':': ~~; 4.6 DISCUSSION 110 4.7 CONCLUSION 119 5. Product Launch: a field study 123 5.1 INTRODUCTION ····.···························.. ··· ..·..·.. 123 5.2 LITERARY FRAMEWORK 125 4/282 5.2.1 Reputation Management Theory 126 5.2.2 The Dramaturgical Perspective 127 5.2.3 The experiential Capital perspective 131 5.3 LAUNCH EVENT DYNAMICS IN THE FINE FRAGRANCE INDUSTRy 138 5.4 METHODOLOGy 141 5.5 PRODUCT LAUNCH EVENT OBSERVATIONS 145 5.6 ANALySIS 161 5.7 CONCLUSION 167 6. Product Narratives and Organisational Strategy 170 6.1 INTRODUCTION 170 6.2 LITERATURE REVIEw 175 6.3 THE ROLE OF NARRATIVES IN THE FRAGRANCE INDUSTRy 180 6.4 HYPOTHESES AND RESEARCH DESIGN 184 6.4.1 Hypotheses 184 6.4.2 Data and Methodology 185 6.4.3 Interview Methodology 186 6.4.4 The Participants 187 6.5 DATA ANALYSIS 189 6.5.1 Fragrance narratives analysis 189 6.5.1.1 Analysis Framework 195 6.5.1.2 Control Variables 198 6.5.2 Results 199 6.5.2.1 Fragrance Narratives 199 6.5.2.2 Interview Data 205 6.6. DISCUSSION 208 6.7. CONCLUSION 212 7. Conclusion 215 8. References 223 9. Appendices 235 ApPENDIX 1: DESCRIPTIVE INDUSTRY DATA 235 ApPENDIX 2: ANOVA RESULTS FOR CHAPTER 4 TESTS 246 ApPENDIX 3: CHAPTER 5 TED BAKER FRAGRANCE LAUNCH ATTENDEES 262 ApPENDIX 4: CHAPTER 6 FRAGRANCE NARRATIVES ANALYSIS AND NARRATIVE EXAMPLES 264 ApPENDIX 5: CHAPTER 6 NARRATIVE ANALYSIS TABLE 270 ApPENDIX 6: INDUSTRY CONTACTS AND INTERVIEW PARTICIPANTS PROFILES 278 ApPENDIX 7: CHAPTER 6 SENIOR MANAGEMENT INTERVIEW QUESTIONS: 281 list of figures FIGURE 3-1: NUMBER OF NEW PRODUCTS, BY DATE PUBLISHED (MONTHS) 54 FIGURE 3-2: SEGMENTATION OF THE FRAGRANCE MARKET 68 FIGURE 3-3: FRAGRANCE DISTRIBUTION 69 FIGURE 3-4: NUMBER OF NEW PRODUCTS BY LAUNCH rvrs 70 5/282 ACKNOWLEDGEMENT The completion of this doctoral research has been one of the major achievements in my life to date. I have truly enjoyed every minute of the process, particularly the travel and all the challenges that came with organising interviews and dealing with senior managers at some of the worlds highly regarded organisations. I am truly grateful to my parents, and my family for their unfaltering support, care and motivation throughout the years ofmy PhD study. This thesis would not have been possible without the supervision, inspiration and encouragement of Professor Joseph Lampel, to whom I am very thankful. I feel fortunate for having the opportunity to work closely with one ofthe top tier academics in the field of strategy. I also wish to thank all company directors and brand managers who participated in this study. Their input enriched the quality of this thesis and provided me with valuable data on which a considerable portion of this study is based. Many thanks to my dear friends whose presence made my study years at Cass business school most pleasant and joyful. I would particularly like to thank Dr Hadi Hallouche for his networking advice. 6/282 DECLARATION I grant powers of discretion to the University Librarian to allow this thesis to be copied in whole or in part without further reference to me. This permission covers only single copies made for study purposes, subject to normal conditions ofacknowledgement. 7/282 ABSTRACT This thesis examines the strategic processes which can be employed to overcome the challenges of launching creative products that possess little or no tangible selling points. Launch decisions and their subsequent impact on the creation ofsales momentum in the fragrance industry are analysed. A context specific model for product launch effectiveness is an initial contribution. Secondly, this study examines product launch activities through the dramaturgical lens. Primary qualitative data collected through a mixed method approach is a further contribution to the current body of knowledge on product launch. 'Elite interviews' with senior management are employed to gain an in-depth perspective into the dynamics of launch processes. Fourthly, the dynamics of organisational self expression, particularly during product launch are distilled through the analysis of organisational narratives. Finally, focussed encounters whereby organisations attempt to shape product evaluation are examined through participant observation. 8/282 1. INTRODUCTION 1.1 Motivation and aim ofstudy The product launch stage is perhaps the most critical stage in the product's life cycle, as activities which constitute the launch plan can lead to the success or failure of the product. The importance of launch strategy is widely acknowledged in the literature (Kohli 1999; Hultink et al 1997; Hultink and Robben, 1999; Hultink et al, 2000; Tholke et al 2001; Benedetto, 1999; Guiltinan, 1999; Langerak et al, 2004). This study aims to address the decision making issues which managers face prior to launching a major product, particularly those in industries which manufacture and sell products with little functional or tangible values. In such markets, firms face new challenges and new choices when launching new products as the concept of value creation in the current economy is shifting and changing. Furthermore, the difficulties which such firms face is twofold: on one hand managers must overcome existing information barriers and create a visible market launch in order to gain sufficient attention and subsequently the resources which can support a sales momentum cycle; and on the other hand, the non functional nature of such products poses an additional difficulty in differentiating and creating value. 9/282 Inthe context ofsaturated and crowded consumer markets firms find it difficult to achieve both tasks successfully, hence the large percentage of product launch failure in various consumer markets (Kotler, 2003; Hultink et al 1997; Guiltinan, 1999; Langerak et al, 2004). The challenges which firms in such contexts face in launching major products, the strategic decisions made prior to the product launch in order to overcome such challenges, and their subsequent impact on product launch will be examined in this study. The choice of topic for this dissertation is motivated by the current evolution witnessed by today's economy. Increasingly, products and services' competition is shifting from one which is utilitarian based to one which is based on hedonic benefits such as providing opportunities for self expression, status signals, entertainment, exploration and so forth. As Rifkin (2000) contends, objects are being replaced by the production of lifestyles, cultural experiences, constructed heritages, fantasies, images meanings and emotions. The factors driving this evolution are due to the increasing intensity of competition which is driving the continuous search for product differentiation. As Pine and Gilmore (1999) state, this evolution is driven by: "[The] increasing competitive intensity, which drives the ongoing search for differentiation. But the most encompassing answer resides in the nature of economic value and its natural progression- like that of coffee bean- from commodities to goods to services then to experiences." (Pine and Gilmore, 1999; p.5) 10/282 Car manufacturers excel at enhancing their in-vehicle experience by spending considerable time and money on developing in-car entertainment, perfecting the sound of closing doors, providing luxurious seat material and so forth.
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