Article:
Top 10 Reasons for New Product Failure
by Copernicus Marketing Consulting and Research
This article presents reasons why only 10-20% of new products and services succeed.
Marketers know that they’ve got to keep a steady stream of new products and/or services flowing—if for no other reason than to keep up with the competition. As circumstances, needs, wants, and trends change, no one wants to get left behind. At the same time though, marketers also know that innovation these days is pretty risky business.
In Winning at New Products, author Robert Cooper estimates that about half of all resources allocated to “product development and commercialization” in the U.S. goes to products that a firm cancels or produce an inadequate financial return. In packaged goods, for instance, IRI calculated that less than a quarter of the new products introduced in 2008 broke the $7.5 million in sales mark their first year of availability and less than one-half of 1% earned more than $100 million in sales. Though estimates of new product and service failure rates vary widely by company, category, industry, and reporting agency, the best-case-scenario chances of introducing a successful new product or service don’t get much better than 50-50.
Through our own work with companies across different industries, we found about 10%-20% of new products and services succeed, which by our definition means they remain in the market generating profits for the company three years after introduction.
Why has success proven so elusive to so many?
Here’s our top 10 list of reasons new products and services fail:
- Marketers assess the marketing climate inadequately.
- The wrong group was targeted.
- A weak positioning strategy was used.
- A less-than-optimal "configuration" of attributes and benefits was selected.
- A questionable pricing strategy was implemented.
- The ad campaign generated an insufficient level of awareness.
- Cannibalization depressed corporate profits.
- Over-optimism about the marketing plan led to a unrealistic forecast.
- Poor implementation of the marketing plan in the real world.
- The new product was pronounced dead and buried too soon.
For more on what you can do to avoid these common pitfalls and make innovation a more profitable exercise, take a look at Innovation Needn't Be Such a Scary Proposition For Marketers.
-January 2010
This content was provided by Copernicus Marketing Consulting and Research. Visit their website at www.copernicusmarketing.com.
Other content shared by Copernicus Marketing Consulting and Research
Get More From Advertising Tracking Research
by Copernicus Marketing Consulting and Research
Advertising tracking research often returns results that don't help marketers: it can take months for tracking numbers to change significantly and even when they do, they provide little insight into why they went up or down. Here are three things you can do today to get more from advertising tracking research tomorrow. Read Article »
Psychographic Profile: What Your Position on the Legalization of Marijuana Might Say About You
by Copernicus Marketing Consulting and Research
Psychographics include variables related to attitudes, interests, personality characteristics, and values. This psychographic profile looks at a side-by-side comparison of the attitudes, behaviors and demographics of the opposite sides of a hotly debated topic: the legalization of marijuana. Read Article »
Good Versus Bad Market Segmentation
by Copernicus Marketing Consulting and Research
The qualities of good market segmentation include the results - does the research yield distinct, proprietary, highly profitable market segments? Copernicus Marketing Consulting and Research shares their 5 steps toward good market segmentation. Read Article »
Marketing Myth: Positioning Is No Longer Relevant
by Copernicus Marketing Consulting and Research
Marketers have lost control of certain aspects of brand communication - it is no longer enough to identify and communicate one brand position. Brands now target specific groups of consumers to ensure their message is relevant, compelling and motivating. One of the most important steps is using customer input, as described in this article. Read Article »
Innovation Needn't Be Such a Scary Proposition For Marketers
by Copernicus Marketing Consulting and Research
Marketers view innovation as key to combating hard economic times, yet less than half have expressed satisfaction with innovation efforts. Creating a new product includes finding the perfect price: market research helps pin down this element and in turn helps produce a market winner. Read Article »
The Real Mystery of Political Polls
by Copernicus Marketing Consulting and Research
Ahead of the 2008 U.S. presidential election, Copernicus Marketing Consulting and Research looked at the phenomenon of "polling failure" and response bias based on social desirability. Read Article »
Attitudinal and Behavioral Profile of People Who Are In Excellent Health
by Copernicus Marketing Consulting and Research
Do you start every conversation with litany of what ails you? A behavioral and attitudinal comparison of people who say they are NOT in excellent health vs. those who say they are. Read Article »
You Can Get Marketers To Eat Their Spinach
by Copernicus Marketing Consulting and Research
Marketers tend to distrust research and data, even though in principle they agree research is good for decision-making. This article shares tips for getting marketers to bring together principle and practice. Read Article »
Study Shows Emotional Connection Currently More Pipe (or Hype) Dream Than Reality
by Copernicus Marketing Consulting and Research
Brands strive to build an emotional connection with consumers, but how many consumers actually respond to these efforts? This article reveals findings from a study of U.S. consumers about emotional connection to brands. Read Article »
Marketing Decisions Still Made With More Guts Than Brains
by Copernicus Marketing Consulting and Research
This article shares findings from a survey of marketing executives and their decision-making approaches - intuitive judgment versus data and research-based. Read Article »
Interview: Adapting Marketing Research Tools for the Digital Age
by Copernicus Marketing Consulting and Research
Marketing Fray sat down with Copernicus' Eric Paquette, a senior vice president at the firm who's leading the digital charge, and posed three questions about how and what marketers can do to make good digital marketing decisions. Read Article »
3 Tools to Get a Read on Marketing Performance in 30 Days
by Copernicus Marketing Consulting and Research
Why Doesn't My Market Segmentation Work?
by Copernicus Marketing Consulting and Research
This article shares scenarios where you might run into problems with market segmentation. Read Article »
Psychographic Profile: East Coast vs. West Coast Stereotypes
by Copernicus Marketing Consulting & Research
Psychographics include variables related to attitudes, interests, personality characteristics, and values. This article shares insights on East Coast vs West Coast stereotypes. Read Article »
Rolling Out a New Product? Take 3 Steps to Nail Execution
by Copernicus Marketing Consulting and Research
While finding the right new product or service is a pretty high hurdle in and of itself, there’s also the marketing plan and the often overlooked execution plan to consider. Here are three steps you can take to keep all the parts of the marketing plan heading in the same direction as you roll it out into market. Read Article »
How to Identify the Most Profitable Targets
by Copernicus Marketing Consulting and Research
A top ten list of criteria used to identify financially-optimal targets. Read Article »
Simulated Test Marketing Gets Your New Products/Services Off on the Right Foot
by Copernicus Marketing Consulting and Research
Simulated test marketing research enables you to experiment and hone in on the best marketing plan. Learn more about this method and its application in this article. Read Article »
"Actionable Insights": Watchword or Buzzword?
by Copernicus Marketing Consulting and Research
This article discusses the measurement of the return on marketing research investments and what to with all the “insights” into customers and prospects. Read Article »
Customer Satisfaction in a Slump: Even the Net Promoters Agree
by Copernicus Marketing Consulting and Research
This article discusses the the latest statistics from the American Customer Satisfaction Index (ASCI). Read Article »
Interview With An Expert: Rolf Olsen on Social Media Listening
by Copernicus Marketing Consulting and Research
Social conversation may offer marketers a constant stream of real-time data on trends, unmet customer needs, and campaign and new product performance, but there’s a whole host of questions that marketers still have to answer when it comes to using and applying information gathered via social listening to marketing decisions. Read Article »
10 Need-to-Knows to Find Good Customer Targets in the Digital Age
by Copernicus Marketing Consulting and Research
In addition to revenue measures, there are other characteristics that make one customer more valuable than another because they’re easier to get and keep, as well as engage as co-marketers. Here are 10 need-to-knows about current and prospective customers that will clearly and definitively guide marketers to good customer targets in the digital age. Read Article »
5 Ways to Eliminate Advertising ROI Anxiety in 2012
by Copernicus Marketing Consulting and Research
Sticking with tried-and-true media vehicles that have performed reliably may be one way marketers can alleviate advertising ROI anxiety. We have five more solutions to knock it out all together in 2012. Read Article »
