Will the fast-paced changes in the market drive companies to change their culture from a product approach to a market approach?
How many product launches fail?
Some experts say:
- 20 to 25% in the industrial sector
- Approximately 30% in the services sector
- 70 to 95% in high technology
More pessimistic opinions estimate that across all industries, approximately 60% to 90% of product launches fail.
The causes are simple:
- The product does not meet the targeted customers’ expectations and does not motivate to purchase.
- The value perceived by the customers does not match the price
- The Market characteristics are not well-known
Marketing research can offer some answers. Moreover, when marketing departments work alongside with R&D departments, product launches are considerably more successful.
The role of innovation is crucial for businesses; it enables customer loyalization and can become, for example, a powerful competitive tool able to generate market share gains. Although many companies are willing to spend important amounts on R&D, marketing research is allotted very little to no budget in the new product development and launch process. They simply do not see the benefits of performing this step and are eager to get their product on the market. At first glance this is totally legitimate, but looking closer reveals this to be counter productive. Thankfully, these days people are becoming more sensitive to the importance of marketing research. Considering the risks associated with new products and services, to maximize on investment, it is imperative to do things right, right from the start.
Not long ago, an company was about to launch its new product, P1, which was targeted to customers X. Based on the knowledge the company had of the industry, and through several informal chats with their sales force and product experts, they determined that product P1 would fulfil the customers’ needs in the market. Hundreds of thousands of dollars were budgeted for the imminent product launch.
In a discussion we had with that specific company, Exo learned about their product launch plan. It wasn’t long before we realized that their plan, as envisioned, was susceptible to failure.
- Targeting errors
- Heavy competition and new market entry barriers
- Slow adoption rates for new technology
No need to say that the launch plan was revised and readjusted! Following that, all objectives were well met.
Numerous research methods can be used. It is important to select the appropriate measurement tools, the right samples, and focus on identifying all potential issues that can (and most often will) arise. Once a product has been launched, businesses must continue listening to the voice of the market and adjust their strategies accordingly throughout the life of the product.
Have you or someone you know lived a new product launch success? We want to hear from you!