Changing product launch plans
The push for product innovation has been a major focus and perhaps a pain point for leaders, whether they sit on the retail or manufacturer side of the desk. But is it possible that we are missing opportunities to maximize our investment in new products?
New products and shelf wars
Every year, marketers and retailers spend countless hours reviewing categories and looking for ways to make space for new products—often at the expense of the launch from the previous year. Companies invest in new product development, launch, and then move on to the next project because leaders are just too busy to look back or question the new product development process.
When we launch any new product and secure the listing, our work is just beginning. I have seen clients piggyback on their flagship products or brands thinking that if they put their new products on the same shelf as their star brands that somehow consumers will magically understand the new product offering and decide to purchase.
The reality is the average consumer is so busy that when they run to the store, they often grab what they need and leave. If we rely on consumers to spend time scanning shelves, then we could be putting too much emphasis on the packaging to sell our product. Is it realistic to put all of the pressure on the packaging? The advancements in technology make it possible to drive consumers to the category, and create integrated closed-loop promotions to ensure we are doing everything possible to increase trial of all new products.
How do we create closed loop promotions?
Strategies like the smart cart that Tesco deployed with the RFID system is not without operational and privacy challenges, but it shows the ability to be agile with promotions and deploying new ways to connect with busy prospective customers. Closed-loop promotional strategies require ongoing innovative approaches to keep people coming back to all new products, unless we are not totally certain that our products are worth the investment?
Are we betting on the right horse?
I have seen a variety of models for allocating Ad & Promo budgets to support new product launches, from betting only on the stars to spreading the budget so thin that the products fail due to lack of support. In some ways, product launches are like being at the races: we use previous stats to guide our budget and strategy. The reality is that there are so many other amazing horses in the race - is it realistic to keep investing only in the stars? How do the other horses get a chance to win if there isn’t an ongoing investment?
I am not saying that our products are horses, what I am saying is that we need to be much more creative with our budgets and the way we support all of the new products so they each have a chance to become stars. I have seen great products launched that were tested in focus groups, and on trend with the potential to become stars if they were supported, but they end up delisted. Isn’t that kind of like expecting a horse to run a race without food and water?
Are we listening to the customer?
Consumers will give us feedback that could be priceless if we listen. I have worked with brands that say they would like to hear from the customer and when they receive feedback, they choose to ignore it. We are in an age where it is possible to glean rich insights from prospective customers by asking the right questions and being ready to act on the feedback rather than trying to make it fit with our product launch plans or trying to predict the next behavior.
Thinking like the customer
The interesting part for those of us in the marketing profession is that we are consumers too. I don’t mean to say that we should fill a focus group with our subjective opinions, but when we put our consumer hat on we are thinking and acting differently, and realize that we are time constrained when we shop, and we have expectations of brands and retailers too.
The demise of new products
Perhaps the bigger question to ask ourselves is how many new products do we launch every year that we end up de-listing the following year because they didn’t meet the hurdle rates? How much money is it costing your company to launch new products and replacing them the following year with a new offering? It could be an interesting study to explore.
What we can change
It really starts with a shift in mindset, reviewing the new product launch process, and the strategy for supporting all new products. Thinking that the products will be stars in one year with minimal promotional support may not be the best strategy for your business. Some new products may require a longer-term plan with ongoing support, particularly product innovations that are ahead of the curve.
Four ideas to consider:
1. Think about all of the horses in the race & support them equally if possible
2. Look at developing plans to provide ongoing new product support
3. Investigate if you have the right tools for closed-loop promotions
4. Wear your consumer hat too
And, if it means a change in plans, change can be a great thing.