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5 Big Product Development Mistakes

Failure rates of new product launches vary by industry, but most stats hover at or just below the 50 percent mark. There are dozens of reasons for these failures, and our engagement leaders see them daily.

The categories where our clients innovate (functional foods, FMCG, prescription drugs, personal care), the markets they sell to, and the sales channels they use are not just targets, but dynamic landing zones. These landing zones are continuously shifting and easily missed, resulting in poor product development results. Adding to that complexity, in an industry like healthcare, the stakes are high and can be a matter of life and death.

We looked internally at our product launch portfolio, since we’ve helped dozens of R&D clients around the world, and found some of the most common missteps.

1. Ignoring E-commerce

This is a big one. Companies come to us, wanting to place their products in stores for 10 months, gathering data on who buys what in a test launch. This is an archaic model that typically costs hundreds of thousands of dollars and results in hollow metrics that merely quantify purchases instead of the full consumer experience.

E-commerce should be a playground for R&D analysts and marketing departments, as it can give companies quick data on consumer behavior. The same product test that took 10 months to achieve in stores can take 10 days online.

For example, companies are neglecting their Amazon presences, and it drives us nuts. Allowing Amazon to execute your listing keeps you removed from consumer behaviors and the day-to-day metrics of who is buying your product. If your product will have ANY sort of online presence, put it on a few e-commerce sites, manage it daily and see what happens. We like to make the smallest bets possible, and e-commerce is a great small bet with low costs and minimal risks, not to mention the best data a test launch can deliver, if executed properly.


2. Missing the Bigger Win

Companies should evaluate whether the innovation is a single need or if it’s a product that offers an overall solution. Can the product be placed with others already on the market to offer a complete answer to a common problem?

This is better explained using an example. Probiotic dietary supplements have exploded in popularity.  Too many companies are focused on finding better bacteria for their products, but few think of the ultimate end-point consumers are concerned with: better GI health.The supplement is a single product, but are there others? P&L owners should carefully consider what products can deliver a truly integrated solution, rather than continuously building better mouse-traps.

If this were us, we’d look at the scientific rationale behind a daily probiotic regimen, as opposed to a single dose of one supplement. Too often, businesses fail to see the opportunity in looking at innovations differently, rather than simply improving what’s already on the market.


3. Too Much Top-down Innovation

We hear it all the time. Companies tell us their innovations come from the bottom and work to the top, but it’s not true. We typically follow this conversation with a simple question, “When was the last time you launched a product that started at the local level?” The answer is almost always a nebulous, “I don’t know.”

Too many innovations come from the big wigs sitting in a board room somewhere in the world. (Is this you?) This top-down decision-making doesn’t give enough latitude to the local levels. In order to create a great innovation, the C-suite needs to involve and empower the employees closest to the consumers because they typically have insight that is often overlooked.


4. Creating the Wrong Size Innovation

R&D professionals constantly talk about the different types of innovation, but often chase the wrong category. There are different terms used in the industry so the verbiage here may vary, but most new products fit into one of these classifications:

  • Incremental Innovation: This an update to a product in order to keep up with the market.
  • Breakthrough Innovation: This is a meaningful change that gives new benefits to consumers and gives the innovator a competitive edge in the market.
  • Transformational Innovation: This type of innovation changes the way we live and work. It’s typically a new technology that renders a previously existing product obsolete.

In a world with always changing technology, it’s important to examine what type of innovation you have and whether it’s worth pursuing. We often find ourselves re-directing clients who operate in uber-dynamic spaces. These clients tend to spend too much time pursuing an incremental innovation when the market is clearly ready for something breakthrough or transformational.


 5. Engaging the Wrong Market

Companies fail to engage the market during R&D in two ways:

  • The Wrong Platform
  • The Wrong People

Companies frequently come to us and want to organize a focus group. Focus groups don’t work. They typically include a very small test pool, and similar to a jury, one strong personality can sway the verdict. Moreover, companies often use the wrong platform by relying on the internet when the innovation is intended for brick and mortar stores. This will result in skewed data.

Another common misstep occurs when recognizing who to survey. Most breakthrough innovations are accepted by early-adopters. Incremental innovations are typically adopted by the late-majority to laggard population. All too often companies don’t sub-categorize early-adopters from their laggard counterparts during market research. There’s a difference between someone telling you in a survey he/she would buy something and actually putting up the money. A laggard may tell you your product is wonderful, but in reality, it’s only the early-adopters who will pull the purchasing trigger.

When we’re helping clients assess new product reception from the best target consumers, we always ensure that we’re understanding the types of people that are giving high scores, not just the quantity of positive remarks.

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Written by Dan Brenner

Dan Brenner is the Chief Growth Officer at SPRIM and SPRIM Ventures. He leads client engagement with a focus on business strategy, new product development and consumer research. Dan has co-founded and led e-commerce companies, managed brands from start-up to acquisition, and worked with R&D executives at some of the largest consumer product companies in the world.