NEW PRODUCT SUCCESS/FAILURE (S/F) FACTORS

Product Factors

· Relative advantage for the consumer/discernible difference for the customer. A new product must have a competitive edge or discernible, meaningful (vs. gimmicky) difference along one or more key buying criteria.

· High quality. Consumer expectations must be met or exceeded every time. For instance, in food products the primary quality issue is taste.

· Consumer appeal. Consumers must accept the new product idea and execution. Many failures are simply misunderstood by consumers. Understanding consumer behavior is important. For instance, many food products have failed because, while they did solve problems, were distinctive, and provided uniform quality, some consumers perceived them to be “yucky” (e.g., McClean Deluxe, a seaweed burger, smokeless cigarettes, which reminded smokers of burning socks).

· Innovative. Unique and superior to the competition. The firstest with the mostest. If not physical uniqueness, perceived uniqueness. For instance, many line extensions are flops because they are merely different sizes, flavors, packaging, etc. How many varieties of microwave popcorn or salad dressing can make the cut on the supermarket shelf?

· Satisfies unsatisfied/undersatisfied needs and wants/solves customer problems. This is considered the single most important S/F factor. The product should be something on consumers’ wish lists, something providing important benefits, something to “plug a whole” in the market.

· Value. If the product doesn’t lower customer costs, at least the benefit/price ratio must be perceived as satisfactory, if not superior.

Corporate Factors

· Fits corporate mission. The product should be consistent with the firm’s current product mix, markets served (channels and customers), and technological capabilities.

· Adequate corporate resources. Internal strengths should be leveraged, including financial position, management skills sets, plant and equipment, technological know-how, manufacturing and marketing capabilities, and image/reputation.

· Top management support and involvement. Senior management should maintain a supportive culture by setting the strategic direction, treating the process as an investment rather than expense, allowing risk taking and the “freedom to fail” and allocating adequate resources (including human resources).

· Organization by dedicated teams. Members from key areas (R&D, design & engineering, manufacturing, marketing) are all involved throughout the new product development process.

· Use of a systematic new product development process. A series of testing and evaluation stages, each with a go/no go decision stagegate, is used.

Marketplace Factors

· Potential competition. The size, dominance, number, and quality of the competition is a very key consideration. The larger and more entrenched the market leaders, the more difficult it is to successfully enter a market, even with a product having significant meaningful differences. Markets with many competitors tend to be more saturated, making another successful entry more difficult.

· Growing or expandable market. This is an important criterion not just for manufacturers, but also for retail chains in deciding whether to take on a new product. In stagnant markets a new product should at least have the potential for expanding the market by getting new users or current users to use more.

· Timing. As in life in general, timing is critical: A product can’t be too early/ahead of its time (e.g., Danny on a Stick frozen yogurt in the 1970s) nor too late (slow to respond to competition, customers, or technological changes, e.g., Matilda Bay wine coolers, launched when wine coolers began fading and the 1980s Australian craze had peaked)

Marketing Program/Marketing Support.

· Use of valid, reliable marketing research (Often research is lacking I or inaccurate):

Concept test: confirms need.

Product use test: confirms that the product meets the need.

Market test: confirms that the marketing program is effective (pricing, distribution, and promotion).

· Targeting and Positioning. Target market involves the best and most lucrative prospects and competitive positioning clearly defines the product’s reason for being.

· Brand name. Communicates and differentiates.

· Packaging. This should be attractive and clearly communicate product features, benefits, imagery, etc.

· Price. Should be perceived as fair and competitive.

· Distribution. 70% + is a common food product distribution objective

· Promotion. Advertising should clearly and memorably communicate the product’s “reason for being,” and sales promotions should give an extra incentive for a trial or repurchase while not cheapening the brand’s image.