Millions are spent every year developing new consumer packaged goods products. In Canada alone last year, 55,000 new items were launched, accounting for an impressive $3.7 billion in retail sales. Of course, we all know that most new products don’t last. An estimated 80 per cent exit the market quickly or soon become vulnerable to being delisted due to poor sales performance.
Flops are inevitable. But you can reduce the chances that your new product fails. How? First off, begin to look at ways of predicting a product’s long-term, in-market success. Don’t just take into account short-term sales. You should choose product initiatives that will accelerate growth. And you should be willing to cut losses early on if the item is performing badly.
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. These measures represent a fantastic summary of the new product’s sales potential. But don’t stop there. You can glean useful insights by looking at new product successes and failures. What has worked already? And what hasn’t?
That’s what we at Nielsen did recently. We examined 600 product launches. Based on these and the testing of 20,000 initiatives, we’ve identified 12 criteria in five different categories that every product must meet to be successful. Use our checklist (below) to rate your own new product launch.
Measuring a product against these 12 criteria can help quantify its likely success or failure. As you can see from our list, it is more than just product attributes that need to be taken into account when launching a new product. It’s about providing a future plan for success that covers all aspects of the launch. For example, no matter how good your product tastes, you still need to attract consumers in order for them to put it into their shopping cart.
That’s why you need to have a product launch plan and consistently score yourself against each of the criteria above. And don’t forget to make adjustments along the way. Remember, in a new product launch you are only as strong as your weakest link. Think of it like a triathlon in which you have to perform well in every event. You can’t breeze to victory in the swim portion, then get o your bike and push it up the hill in the next event.
New product success is a long race. It’s not about doing just one thing really well. It’s about doing everything well.