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How to enhance New Product Development

Take a look at the number of product launches over the past 10 years and you’ll meet a sobering truth; the landscape is littered with innovative products that failed in the marketplace (as many as 4 out of 5 new products fail). Yet companies seem to accept the statistic and don’t invest in techniques and methods that will improve their chance of success. How can this be?

The primary reason for product failure is simple enough; new products fail because they fall short of fulfilling customer needs. Whilst most marketers are well versed in the need to meet this basic requirement, all too often ill-conceived or poorly defined products are launched as a result of a decision making process that is disconnected from strategy or, worse still, the customer.

Ill-considered or poorly defined products not only vastly complicate the life of a marketer; creating programmes and campaigns for essentially unmarketable products, but they can sap the energy of the entire organisation and divert valuable resources.

The bottom line is this; if your product benefits fail to deliver economic value to the customer, why will they buy it? Answering these questions demands that you conduct a kind of research that fundamentally changes the way that you talk to customers … more

Although each firm’s development process is unique, most involve a series of tests to ensure that bad ideas are rejected early in the process. There are many techniques for generating the ideas in the first place, but how do you assess their economic value? Here are some of the things you should consider:

1. Really get to know your customer. There are a number of techniques to gain customer insight; first hand observations, focus groups, consumer labs etc (contact 2Europe if you’d like to know more). Do the features of your product match their needs? How can they be refined? Test different options, use prototypes and mock-ups and benchmark against existing or competitive products.
   
   
2. Develop a rigorous business case.  If you’re going to convince your leadership team to invest in your product, you’ll need explicit financial analysis and predictions backed-up with competitive benchmarking, hypothesis generation and a rigorous process to ensure that product costs don’t exceed target. Your analysis should also consider the ‘business case’ from the perspective of your customer. If B2B, how will your product reduce their costs, or increase their revenue? If it’s not possible to identify at least one way that the product will deliver value, then it’s not likely to be successful from launch. Concepts that pass this economic value estimation can be screened by order of magnitude and determine which products go to the next stage.
   
   
3. Transform mindsets. Product development nearly always has to reconcile the differing needs of functions within your organisation. Sales want low price, marketing want features! Treat the process of product development as any significant business project; with owners and cross-functional teams to ensure buy in at all stages. Involve your customers in the process and you’re on the road to delivering successful, profitable products.
   
   

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