It's Time To Revolutionize Product Innovation

Millions are spent on developing and launching new consumer packaged goods (CPG) products each year. In fact, companies spend, on average, $ 15 million on marketing for a new product launch.

But the vast majority of those new products fail.

In general, new products have a 10 percent chance of succeeding. That's not a great investment of marketing dollars.

As retailers continue to look for new items to add to their store brand portfolios, there are learnings they could glean from new product successes and failures to maximize the potential for a successful launch.

When deciding which new products to pursue, many CPG companies rely on the same core measures from the “pencil and paper” days of research. These traditional measures look at things such as purchase intent, units per purchase and frequency of purchase, among others. And these measures still represent a fantastic summary of the new product's sales potential.

But to predict in-market success, not just sales; to choose the right product initiatives to accelerate and the initiatives to cut your losses on early; and to optimize each initiative and its execution to the fullest potential, there's more that matters.

Based on an examination of 600 product launches and testing of 20,000 initiatives, Nielsen identified 12 criteria in five different categories that every product must meet to be successful:

Salience

Distinct Proposition. Does the product offer a true innovation?

Attention-Catching. Will the product be noticed?

Communication

Message Connection. Is your message conveyed simple, persuasive way

Clear and Concise Message. Is your message conveyed without clutter?

Attraction

Need/Desire. Does your product solve a problem or meet consumers' needs?

Advantage. Is the product better than others currently in the marketplace?

Credibility. Are your product claims believable?

Acceptable Downsides. (Typically related to side effects for over-the-counter products)

Point of purchase

Findability. Is the product where consumers expect it to be? Can shoppers find it easily among the competition?

Acceptable Costs. What are the cost/ benefit trade-offs at the shelf? These could be related to price, calorie content usage instructions and/or other factors.

‘When it comes to new product innovation, it's important to remember that you are only as strong as your weakest link.’

Endurance

Product Delivery. Did you meet or exceed consumers' expectations? Are you delivering on your product's promise?

Product Loyalty. Will consumers continue to purchase your product in the future?

These 12 consumer benchmarks can help marketers quantify the likely success or failure of a new product launch and provide improved precision around new product success.

It's also important to know how well you need to do on each measure. For instance, your new product needs to be credible. But it may not need to be extremely credible. On the other hand, product delivery is an area where a new product initiative really does need to perform extremely well.

When it comes to new product innovation, it's important to remember that you are only as strong as your weakest link. Take a triathlon, for example. You don't need to be the fastest swimmer, biker or runner, but to win you need to do well in each event. You can't win in the swim but get off the bike and push it up the hill. New product success is not about doing one thing really, really well; it's about doing everything you need to do well. PGSB

Straight Talk delivers monthly store brand insights from Nielsen, New York. Todd Hale is Nielsen's senior vice president, consumer & shopper insights.