Creating and launching new products successfully isn’t easy. In fact, the industry track record for new product success is dismal. Getting a net return on the investment made to bring a new product to market is often an accomplishment. While there are no golden paths to new or existing product success, there are a number of principles that greatly improve the odds. This is designed to outline some of the most important factors in marketing new and existing products successfully.
Step 1: Meet a genuine unmet need
Too many products are in search of a differentiated market. Stakeholder (patient, carer, prescriber, payer, etc.) insight research is critical. Products that meet a genuine unmet need have a basis for long-term stakeholder interest and investment. Sometimes those needs are latent and are created with an innovation in the market, such as with the invention of the drugs for ED (Erectile Dysfunction) and GERD (Gastro-Esophageal Reflux Disease). Do your homework. Talk to stakeholders. Make sure there is a genuine need to fulfill and that the market need is large enough to warrant the introduction.
Step 2: Make sure the product performance measures up
Products that don’t fulfill on their promise or fulfill the wrong need miss the mark and the market. Prototype the product concept in the lab and validate with external stakeholders to ensure that the product not only delivers on the need but that the stakeholder perceives it to deliver on the need. It is also critical that the product is in Step with the competitive market. If it performs well but another product is superior, product life may be short. Although there are several examples in the pharmaceutical industry where clinically inferior products have fared best in the market.
Step 3: Build a strong price-value proposition
Payers generally want to make the best buying decision possible for the money. If the product solves a need and performs well but the cost is too high, the customer will look elsewhere. The price of the product must be in proportion to the problem or need it meets. Market access research is critical here. Don’t forget the competitive assessment. Price/value is usually relative to the other alternative/ substitute choices payers have. Great value for the payer enhances prospects for market longevity.
Step 4: Positioning and differentiation
Many times there is a great product that performs well, but the message to the customer is wrong. In a voyage to mars, missing the target by just 2% would be disastrous for the mission. Likewise, precise positioning of the product to the patient or physician can make the difference between success and failure. Many companies are too consumed with where they will communicate before carefully determining it is that they want to say. All communications should be integrated and focused on a meaningful benefit to the stakeholder(s). It also needs to clearly help them understand and feel motivated to prescribe, use and pay for this product rather than any other one available on the market. When you are done, you want them to feel there is no better alternative than to buy your product.
Step 5: Focused targeting
Once the proper message is determined and to whom it should be communicated, sometimes the media used doesn’t communicate the message well, doesn’t reach the target market, or is too poorly targeted to reach the target economically. The message and the media need to be carefully planned. There also needs to be enough critical mass in media levels to get above the general noise in the market. Reach and frequency are both important. At any given time, prime prospects for your product may be at varying stages of readiness to buy. You must be ready with your message when they are ready to enter the marketplace. Some product selection choices are considered more carefully than others. Make sure you can inspire the appropriate level of confidence in your product and be at the right place at the right time with the right message for your stakeholders.
Step 6: Product economics
Some products with a 30% margin can be successful while others with a 75% margin fail. Considering the entire equation of the product’s economics is essential. What percent of sales will it require to reach and win patients? What is the lifetime value of a patient? What will it cost to deliver the product to the customer and then provide superior service to support patients, their carers or physicians? Don’t miss the hidden costs. Make sure the margins are appropriate for the product.
Step 7: Effective distribution
Finding the correct channels to get the product to the patients can be as important as the product itself. Many superb products fail because they don’t reach the end user. If a patient or physician loves the product but has difficulty getting hold of it, or the physician struggles to fulfill the patient monitoring requirements, success will be evasive.
Step 8: The right timing
Being early to market is valuable but not essential. Many successful products were established by being the first to market. However, it is equally important not to be too early before the market is developed. Being a later entrant to market works best if you can improve on what is available. There needs to be a reason for stakeholders to want to use your product over others that are available. It is hard to start the race late with a horse that won’t race as well as the leader. Likewise, it sometimes requires stamina to develop a new market. Patience may be the price of success.
Step 9: Organisational support
People create products, and they are needed to ensure their long-term success. The organisation becomes an extension of the product. Great products with an organisation that doesn’t service the customer well are very vulnerable. In addition, failure to see new threats or opportunities on the horizon such as new competitors, product innovation, major technology change, new governmental regulations, channel shifts or major changes in the economy shifting treatment paradigms, could make the product obsolete. A great organisation, like a good commanding officer, will be scanning the horizon and have good sources of intelligence. It will also provide great support for those in the trenches with their product.
New product development can be highly successful. Stack the odds in your favour by applying the nine steps to successful product development.