New Products – Success or Failure
New products continue to be introduced, some with greater success than others. Where do new products originate and what makes some introductions more successful than others?
Most New Products Originations are not New
It is estimated that only 10% of new products are major new innovations followed by minor modifications of existing products create about 20%. Therefore, the remaining 70% are modifications of existing and older products.
New Product Winners and Losers
There is never one and only one reason a product is successful and or fails but there are some commonalities that seem to always appear to lead to success or the failure.
Understanding the customer and what makes them purchase is one of the most influencing factors in the new product introduction process. So, let’s start by understanding the industry, followed by the strong identification of the target market and finally what is going to get the target market to consider purchasing the new product. In short, the new product must address all aspects of the marketplace while being able to supported by the resources of the company and finally meet the expectations of the ultimate purchaser.
So what are some of the common indicators for new product failures? Unlike the David Letterman top ten lists, the following list is not in an order of priority.
- Actions by the competitors
- Failure to define precisely the segments where product will have the greatest value to the users
- Failure to anticipate the demand which the product makes on the customer’s technical skills
- Faulty product performance
- Inadequate understanding of the buying process
- Lack of awareness of the extent of brand loyalty and other significant personal influences
- Not understanding the buying cycles of the customer
- Underestimation of the amount of marketing effort required to generate expected revenue and misdirected efforts
- Technological obsolescence
- Timing of the introduction
- Under capitalization
- Underestimation of the amount of investment required by the customer
So, when you’re thinking about introducing a new product, think of all aspects: the industry, the current and future markets and most of all, the ultimate buyer.
