Innovation and new product development research has many fascinating avenues. One area of such research is aimed at discovering and exploring those characteristics that make products “winners.” The goal is to develop guidelines that will help designers include elements known to enhance the chance of a product or service of succeeding against competitor offerings. Another aspect is to also describe what it is about some organizations that make them above average in producing new products that do well. A well known scholar in this area of research is Robert G. Cooper, author of Winning at New Products (Basic Books, 2017). Along with colleagues Elko Kleinschmidt and Scott Edgett, Dr. Cooper has produced in-depth analysis and descriptions of the new product development process, pioneering the stage-gate new product process.
Here is a brief overview of new product success and failure factors. (A more detailed review is available on the Resources page at simplecustomerservicerules.com.)
Success Factors
The product is a good match between product and market needs. A product or service developed without studying customers needs and wants is less likely to do well in the marketplace.
An adequate target market size is identified. Adequate size is relevant to your resources. Smaller competitors can be happy with very small market segments, but a larger firm may require one with a minimum size as a threshold for further interest. More information may be needed, including that from your own research and other from outside sources.
The product offers a clear and meaningful benefit. Understanding, and practicing, the marketing concept is key for this factor. Benefits delivered must exceed the cost to obtain obtain them (i.e., value is created).
The new product is distinguishable from substitute products. Products are more successful when they are not simply “me too” versions of an existing bundle of benefits. However, success can be attained by offering the same benefits, but at a lower price. The challenge is to do so and still be profitable, meaning a low cost structure must in place.
It offers a unique and superior value. This factor is highly correlated with the preceding pair.
The organization is committed to new product development. All members of an organization needs to know they are expected to be involved in generating ideas, working on developing those ideas, and helping to achieve success. Some of an employee’s performance goals should be tied to new product or service development activities appropriate for his or her role.
Failure Factors
The product does not match product and market needs. This factor is both an opposite of the first success factor and a failure of being market oriented (i.e., “customer centric”). The remaining factors associated with failed new products are also in that same theme, so we will discuss them as a set:
The market size was overestimated., the product had incorrect positioning, the product was inappropriately priced, had inadequate distribution, and was promoted poorly. Note that all of these reflect a poor job of executing the marketing concept (as with the first failure factor, the firm is not being market oriented). In fact, most of these are marketing mix failures (i.e., they are price, place, and promotion shortcomings).
Studying success and failure can improve new service/product planning. The goal is to assure that as many success factors as possible have been addressed, and likewise that any of the failure factors that might might have crept in are removed/improved. Testing pricing and promotion with potential customers would help in both areas. Ensuring that proper resources for distribution are in place can help avoid supply shortages that could disrupt or outright ruin a new product’s introduction.
Being aware of both success and failure factors can help your organization thrive in its generation of new and exciting services and products.