Developing successful products is hard
In today’s increasingly competitive and turbulent environment, a company’s ability to develop and commercialise new product innovation is a key determinant of its success and survival (Sandvik and Sandvik, 2003). In some industries such as the pharmaceutical and electronics industries successful new product innovation is virtually synonymous with success. Successful innovations can enable companies to consolidate their position in existing markets, enter new markets, and explore new market opportunities, and even enable them to gain competitive advantage (Tellis et al., 2009).
However, according to a leading market research agency, as many as 95% of new products introduced each year fail. Other researchers suggest that over 80% of new product ideas never even get past the development stages and half of the new products launched miss their profit objectives. An article in the April 2011 issue of the Harvard Business Review reveals that “less than 3% of new consumer packaged goods exceed first-year sales of $50 million—considered the benchmark of a highly successful launch”. Studies examining the general success rates of new products have shown that, only I in 4 new products that enter development ever becomes a commercial success. Although some industries do far better than others, in general, failure rates can be considered high across the board.
Considering the investment that goes into developing and launching a new product, these figures are astounding. The ability to identify key indicators of failure early on in the product development process can be vital to a company’s survival. Assessing and planning for the mitigation of risk before the product is marketed, can save a company 100s of £millions, and help them steer clear of the incalculable costs of revealing their failure in the market.
Read the rest of the article here: Asking customers what they want is a waste of time and money