What Is Commercialization?
Let me explain commercialization directly: it's the process of bringing new products or services to market. You should know that this broader act includes production, distribution, marketing, sales, customer support, and other key functions that are critical for the commercial success of that new product or service.
Typically, you see commercialization happening after a small business has grown and scaled its operations to a point where it can successfully target a larger market. For instance, if a small bakery has built a reputation for its cinnamon rolls and sold them successfully, it can commercialize by packaging those rolls and selling them to local grocery stores, allowing more people to buy them and multiplying the bakery's sales.
Key Takeaways
- Commercialization is the process of bringing new products or services to market.
- Commercialization requires a carefully developed three-tiered product rollout and marketing strategy that includes the ideation phase, the business process, and the stakeholder stage.
- The broader act of commercialization entails production, distribution, marketing, sales, customer support, and other key functions critical to achieving the commercial success of the new product or service.
Understanding Commercialization
You need to understand that commercialization demands a carefully developed three-tiered product rollout and marketing strategy. This encompasses the ideation phase, the business process stage, and the stakeholder stage.
The Commercialization Process
Many view the ideation stage as the mouth of a funnel, where numerous ideas enter but only a fraction proceed to implementation. In this phase, you generate new products and services to meet unanswered consumer demands, focusing on functional designs that align with your company's business model by offering high benefits at low cost.
The ideation stage incorporates the marketing philosophy known as the four Ps: product, price, place, and promotion. This is the marketing mix, where you determine the products to create, the price points for selling them, the target customer base, and the marketing campaigns to move the merchandise.
For a product to qualify for commercialization, your research and development efforts must indicate public value that could boost profitability. In the business process stage, you consider feasibility, costs, and how to roll out a commercialization strategy.
The stakeholder stage involves identifying target audiences and stakeholders for the product or service. For true success, you must satisfy both customer and stakeholder needs.
Selling New Products in the Marketplace
Before bringing a product to market, you must secure patents, trademark registrations, and other legal measures to protect its intellectual rights. Manufacturing can happen in-house or be subcontracted to third-party factories. Once the product line is ready, promotional efforts raise awareness in the target market, accessed through distribution channels and retailer partnerships.
Businesses that handle production, marketing, and distribution in-house often see higher profits since they avoid sharing with intermediaries, but they also bear greater liability for production cost overages.
When Does Commercialization Occur?
Commercialization usually takes place after a small business has grown and scaled its operations to levels that enable it to reach a larger market successfully.
What Are the 3 Tiers of Commercialization?
Commercialization requires a carefully developed three-tiered product rollout and marketing strategy: the ideation phase, the business process, and the stakeholder stage.
What Is the Legal Process in Commercialization?
Before a new product can enter the market, you need to undertake patents, trademark registrations, and other legal measures to protect the product's intellectual rights.
The Bottom Line
In summary, commercialization is the process of bringing new products or services to market. On a broader scale, it involves production, distribution, marketing, sales, customer support, and other key functions critical to achieving the commercial success of the new product or service.
Other articles for you
Net volume is a technical indicator that measures market sentiment by subtracting downtick from uptick volume to identify bullish or bearish trends.
Utilitarianism is a moral theory that promotes actions maximizing happiness for the greatest number of people.
Step-up in basis is a tax rule that resets the cost basis of inherited assets to their market value at the time of the owner's death, minimizing capital gains taxes for heirs.
A follow-on offering is a company's issuance of additional stock shares after its initial public offering to raise capital or allow shareholders to sell holdings.
A greenback is a slang term for U.S
A viatical settlement allows terminally ill individuals to sell their life insurance policies for immediate cash, transferring benefits to investors who assume premium payments and collect upon death.
Form 8283 is an IRS tax form used to report and deduct non-cash charitable contributions exceeding $500.
The Jones Act is a 1920 U.S
Day-count conventions standardize how days are counted for calculating interest on financial instruments like bonds and swaps.
Notional value represents the total value of the underlying asset in a derivatives contract, used to calculate payments and assess risks.