The quest to develop successful new products is relentless – there are around 9,000 new launches each year in the food sector alone. The logic is straightforward – by addressing increasingly individualised consumer needs, marketeers can maximise profit and enhance brand value.
Battling against this is the fear of failure, especially given recession-fuelled cost consciousness. It’s thought that as many as 9 out of 10 new products are no longer around within two years of launch. With hindsight, some are doomed to failure (Harley Davidson perfume and Bic underwear now appear very strange ventures) but other disappointments are less easy to foresee (Radion and packaged ready-to-drink Nescafé seemed to be good ideas at the time). It is easy to see why launching new products can be seen as a dangerous trip into the unknown, with caution and nervousness amongst brand custodians entirely understandable.
Providing the necessary reassurance is not easy – research is often characterised as a woefully inadequate predictor and dismissed all too frequently as providing a green light to brand initiatives which then flop in terms of real-world sales. In attempting to find ways to improve the credibility and utility of new product development (NPD) research, we are able to draw on a wealth of experience for clients such as Virgin, Sky and British Airways. And recently, we embarked on our own project, interviewing over 1,000 consumers online and in depth focussing on how they respond to new product ideas, both attitudinally and behaviourally.
The first thing we found was that 19% are new product junkies. We call them Enthusers, with this group being characterised as younger, open-minded and promiscuous in their brand choices. Not only are they attitudinally disposed towards new launches, they also put their money where their mouths are, being more likely to trial new products. That said, the downside with Enthusers is that they can be transient – potentially abandoning a recently discovered product for the next ’new kid in town’.
Elsewhere, we encountered measured and pragmatic benefit-driven Evaluators (55%) and highly cautious Evaders (26%), with this latter group sticking to tried and trusted favourites and, thus, likely to give new products a wide berth until they are well and truly established.
In our survey, we explored uptake of a range of recent FMCG launches. Around one in three had tried the new products – mainly Enthusers and some won-over Evaluators. This shows that marketers planning a new product shouldn’t be seduced by notions of achieving huge penetration levels instantly. The findings call for realism and caution, especially if you then look at how many of those trialists go on to purchase the product for a second or third time (around one in 6 from our study); let alone becoming a regular, loyal purchaser.
Identifying a killer benefit is crucial for achieving consumer buy-in. For example, we noted considerable appeal for products such as McCain’s Simply Gorgeous (premium potato products for special occasions) and Birds Eye Simply (fish cooked in its own patented foil pouch).
But other factors were also important – did the concept create newsworthiness, a buzz, (think Apple iPhone) and was it supported by strong brand credentials? Although this isn’t mandatory for consumers (Ubuntu and Gü are examples of market entrants that became successful in absence of oodles of brand heritage), it typically and not surprisingly helps in the quest to generate interest around a product idea.
In the research we also sought reactions to a spectrum of hypothetical NPD ideas. This neatly demonstrates the importance of developing meaningful and compelling brand values – concepts like Dove Toothpaste, Guinness Chocolate, Virgin Car Rental and L’Oreal Clothing all appealed to some extent, highlighting the potential for strong brands to go beyond their comfort zone.
So, a combination of a novel, genuinely differentiating benefits forged around a well regarded brand is a potent cocktail. But our evidence also emphasises that marketers need to have realistic ambitions in terms of defining what constitutes success and, of course, to make sure their carefully cultivated NPD concepts aren’t just targeted at those fickle NPD Enthusers.