Four Critical Elements for a Product LaunchWith more than 20,000 new products launched annually and barely 10 percent succeeding, there are four key priorities every brand manager and marketing executive should attend to when considering the development of a new product idea.
1. Evaluate the trial potential of the idea. How likely is it that the intended target will try the product? By quantitatively testing early in the development process, marketers should answer these questions prior to launch: Does the idea have a compelling benefit? Does it offer consumers something they cannot get anywhere else? Does it provide them with the proof that will give them the confidence the product will perform? Is it priced right? Are there any other insights that can best ensure the success of the initiative?
2. Determine which elements are central to driving trial potential. Use proven, industry-standard techniques like Thurston V Analytical or derived importance measures to understand the relative impact of claims, benefits or other features in the new idea to focus your initiatives on the specific items that matter when motivating a moving target.
Rather than focusing communication in areas that are not deemed important, marketers should strive to unearth key consumer behavior drivers by using a combination of qualitative and quantitative hybrid techniques to uncover consumer motivations. Understanding what is most important to consumers will make marketing communications more efficient and, in the end, more productive and rewarding.
3. Understand the cannibalization impact of every product launch. While an idea might appear to have strong potential to build the brand from an emotional and equity standpoint, examining the potential of an idea in a vacuum can be deceiving. In many cases, marketers have little sense of the impact a line extension will have on the performance of their entire brand -- until it's too late.
The problem with looking at trial potential only in the absolute, without an understanding of cannibalization, is that new product launches can wither away the strength of existing SKUs. With SKU proliferation at an all-time high, and marketers scrambling to bring the latest and greatest to market, don't make the mistake of watering down your brand or increasing sales at the expense of the overall success of the company.
Retailers closely examine the velocity of individual SKUs when effectively managing their categories. Launching a product that does nothing more than capture most of its trial volume from its own "sister" SKUs will only thin out volume and put the overall brand distribution at risk.
Also, increases in warehousing and distribution of the additional SKUs with the compliance mandates imposed by big box stores mean that the new product could actually cost the company significant amounts of money over and above the mere cost of a failed product.
Knowing how a new product idea will affect brand performance early in the development process must be central to all new idea evaluations.
4. Determine whether the idea will build brand equity. Finally, the most neglected issue of all is simply whether this idea will do anything to build the equity profile of the brand. Too many companies today launch products without understanding whether they will enhance the overall standing of the brand or simply borrow from its goodwill. Assessing the equity supporting or building potential of an idea will help sort out the real winners from the short-term gainers.
For example, the recently launched Cinnamon Roll cereal from the Quaker Oatmeal brand might have tested positively among consumers, yet its launch raises big questions relative to its ultimate impact on the equity of the brand.
The ad tested showed a picture of a sticky sweet cinnamon roll. Cinnamon rolls by their very nature aren't considered healthy -- which is just the opposite of the equity of the Quaker Oatmeal brand. While in the short term this idea may help win share in the cereal segment, in the long term it will do little to help the communication or support of the brand position.
The bottom line for marketing executives is that early stage testing and paying attention to the details can save your new product from dying a slow, painful death. Look beyond the easy things like trial, and dig deeper to understand how to best communicate, build your franchise volume and fulfill the brand mission of offering a compellingly differentiated message to consumers.