Product launch decision tree template
A product is ready. You can launch it nationally now, pilot it in one city first, or hold. The pilot costs less and tells you something about demand, but it delays the launch and costs money whatever it finds.
The tree
The decision in plain words
The options
Three options: launch nationally for the full marketing budget, pilot in one city for a fraction of it and then decide again, or don't launch and keep the money.
The uncertainties
Demand is the uncertainty. A national launch faces it blind. The pilot resolves it partly: if the pilot succeeds, strong national demand becomes much more likely; if it fails, much less.
The numbers
The payoffs are year-one contribution for strong and weak demand. Costs are the marketing spend on each path. Change them to your own figures; the recommendation and the switch point recompute as you type.
The result
Launch nationally, with an expected value of 42,000, 6,500 ahead of Pilot in one city first.
Where it flips. If the chance of weak demand under Launch nationally rises above 63.6% (it is 60% now), Pilot in one city first wins instead.
- Chance of a loss
- 60%
- Best case
- 150,000
- Worst case
- −30,000
Change these numbers first
- The chance of weak demand under Launch nationally: the answer flips at 63.6% (now 60%).
- The chance of strong demand under Launch nationally: the answer flips at 36.4% (now 40%).
- The payoff for strong demand (Launch nationally): the answer flips at 183,750 (now 200,000).
The closer a switch point is to your estimate, the more that estimate deserves a second look.
The tree as text
# Analytical: should we launch, pilot first, or hold?
Launch the new product?
Launch nationally (cost 50000) # full marketing budget
Strong demand (p 0.4): 200000
Weak demand (p 0.6): 20000
Pilot in one city first (cost 15000)
Pilot succeeds (p 0.5)
Roll out nationally (cost 45000)
Strong demand (p 0.7): 200000
Weak demand (p 0.3): 20000
Stop after pilot: 0
Pilot fails (p 0.5)
Roll out anyway (cost 45000)
Strong demand (p 0.1): 200000
Weak demand (p 0.9): 20000
Stop after pilot: 0
Don't launch: 0Related templates
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Go deeper
- Consultants and analysts — how people in this situation use DecisionBranch
- How to make a simple decision tree
- How to make a decision tree
- Expected value and decision trees
- Analysis calculator: paste this tree and see the working, step by step
Make this decision your own.
Open the template, change the options and numbers, and the best option updates as you type.