Failure in New Product Launches

Whether it is 65% or 90%, new products are failing overwhelmingly more than they are succeeding. So, why are companies continuing to develop new products when they know they will most likely fail? As Ray Poynter pointed out in an article last December, product and brand managers are receiving initiatives from the C-Suite for growth. Ray asks a very important question: How many new product launches in absolute terms can be successful? New product launches have consistently increased over the past 30 years while successful new products have remained stagnant. When you think of new product launches in these terms, you realize that product failure is only going to increase into the future. Consumers only try a handful of new products every year, so it appears that the risk of launching a new product will always be there.

In a HBR article from 2011, Joan Schneider and Julie Hall address why most new product launches fail. They compiled multiple research reports to find some of the most common problems amongst new product failures. The biggest flaw they point out is a lack of preparation. The majority of companies are not doing enough market research early in the new product process to discover valuable consumer insights about their category and competition. I want to emphasize the word early, because it was the focus of the solutions that Dr. Schroiff presented in his article about new product launches earlier this month. You have to engage in planning and research early the in the new product development process for any of the insights to be actionable. 

Do Your Homework

New product launches need to be approached from an entrepreneurial mindset even inside of multi-national corporations. Research and Development has and will always be the most crucial team in the new product development process. The key to success in R&D is a consumer-focused, marketing approach. You can have the greatest product innovation since sliced bread, but if you didn't build it to be "remarkable," you fail. Organizations have to do a better job at connecting their insights teams, marketing teams, and R&D teams from the beginning of the new product development process. 

Spreading Ideas

R&D teams need to dig deeper into the early adopters and innovators in the product category. You have to create "remarkable" products, meaning that they are worth a remark. Seth Godin also alluded to the importance of design in this process. Unique designs in packaging, POP displays, ads, etc. that grab a consumer's attention are remarkable. Watch this legendary TED Talk by Seth Godin from 2003 about how to spread ideas in this century. (He had the vision and companies are finally catching up.)

How do we Understand Design?

Design is crucial in the success of a new product launch, and we know this from countless examples over the past 15 years. New product design is innovation, and you must understand how this new design impacts your consumers. Market research is the key to testing and evaluating new product design. Companies for years have used traditional research like focus groups to better understand what consumers think about new products. Unfortunately, focus groups have a high rate of group think and are out of context when evaluating new products.

Contextual, Consumer-Focused Design Research

Companies must continue to use focus groups, but after they have tested design in context with consumers. One of the best ways to test new packaging or product design is through bio-metric research in a retail environment. In an article from January of 2015, Pete Foley (Former Director of Consumer Science @ P&G) discusses the power of understanding attention. He goes on to emphasize the importance of visual attention in-depth. Visual attention is unique, because we have more "nonconscious" thoughts with our eyes than any of the other senses.

Eye Tracking: Grab Your Consumer's Attention

Tobii  2 Eye Tracking Glasses

Tobii  2 Eye Tracking Glasses

Package InSight is a great example of a consumer behavior research agency that uses eye tracking technology inside of retail stores to better understand visual attention. Eye tracking is a fascinating way to understand how consumers interact with your product, package, or display on a "nonconscious" level at the point of purchase. We have found over the past 15 years, that consumers are making impulse decisions with their "nonconscious" thoughts that they do not even recognize are going on. You can pair this kind of research with qualitative research like focus groups to understand the difference between what consumers are telling you and what they are actually doing.

Pulling the Emotional Triggers

Scott Young, a long time expert in consumer behavior research, mentioned in arecent article, eye tracking is revealing the emotional triggers at the point of purchase. Last year, Jim Kirk published a popular LinkedIn article about emotional experiences and their impact on consumers. I think he alludes to a lot of interesting ideas on building customer experience, specifically with products. He makes the point that products have to create an emotional experience for not only the consumer, but also the other consumers watching. New products have to feel "new" and they have to feel "remarkable."

Design teams have to work with their research and insights team to test and evaluate new package and product designs. They need to use biometric technologies like eye tracking to better measure and understand the emotional response to packaging and other displays at the point of purchase. Companies can expect to decrease their risk and product development cycle time by using contextual, consumer-focused research early in the design process.

Where do we go Next?

A quote from Pete Foley's article mentioned above, "Being seen is not enough. Turning noticeability into a sale requires customers to see, understand and want us." We have to continue to innovate our research methods to better understand the "nonconscious" thoughts of consumers. We have to conduct research like this on our package, our advertising, our POP displays, etc. to understand the entire buying picture of our new product. Even with all of this research, we cannot guarantee success, but we can decrease our risk down to the flip of a coin. Which in terms of new product launches, would be a success.

Feel free to comment and ask questions, I welcome a discussion on new product development and consumer research. 

About the Writer

Eric Dunn is the Chief Innovation Officer of Digerati Marketing. He has passions for entrepreneurship, marketing, research, and technology. He works with entrepreneurs across the state of South Carolina to analyze markets, formulate marketing strategies, and develop new products. Eric has a Bachelor of Science in Marketing from Clemson University and is currently working on his Master of Business Administration from Clemson University. 

Follow Eric on Twitter @The_Eric_Dunn

For more information on eye tracking research, go to www.packageinsight.com 

Package InSight uses research and technology to quantify shelf impact and consumer appeal; helping you make important packaging decisions. Our shelf impact studies reveal how well products and packaging stand out within a product category.

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