According to Fast Company [inlinetweet prefix=”” tweeter=”” suffix=””]the number one reason for failure a new product has no clear or compelling relevance to people’s lives[/inlinetweet]. Companies often refuse to acknowledge a new product or service idea serves no strongly identified customer need, and they try to retrofit their marketing to compensate. I would also argue that the number 1 reason is that[inlinetweet prefix=”” tweeter=”” suffix=””] marketers rely too much on market research and that too many people within the organization are afraid to say “this is a dumb idea”.[/inlinetweet]
[inlinetweet prefix=”” tweeter=”” suffix=””]The statistics are quite alarming when it comes to new products; 4 out of 5 will fail[/inlinetweet]. That’s a lot of wasted money in product development as well as precious marketing dollars. Yet the pressure to introduce new products that are going to fail can be very high in organizations that focus on politics rather than the customer.
There is a reason that Steve Jobs did not use focus groups and other market research. He felt that they were not a reliable source of new product innovation and as thus he took more of a risk to develop and market new products that he felt consumers would want. While that kind of power is very rare today in any CPG company, the key lesson here is that[inlinetweet prefix=”” tweeter=”” suffix=””] marketers need to rely less on market research and ask a basic question “what problem does our product solve for consumers?[/inlinetweet]” Or “does our new product make consumers feel good about themselves?”.
For a great example on new product failures look no further than the rebranded Diet Coke flavors. The reviews have been critical from Millennial’s who were the target of the new Diet Coke products,but Diet Coke seems to have neglected the fact that Milennials are not drinking soda anymore because it’s unhealthy. Is there any doubt this strategy will fail?
Now, I’m the first one to raise my hand when it comes to conducting more market research, but I also trust my gut and use common sense when working for clients on new products. Not too long ago a client, who made high cocoa, chocolate cars, wanted to add some with caramel fillings. His products were actually positioned as a healthy snack because of the high cocoa content and the research that showed that high cocoa content was beneficial to consumers. Why add caramel I asked “wouldn’t it just increase the sugar content without any benefit for our customers? Sure enough the research confirmed this with our current customers.
[inlinetweet prefix=”” tweeter=”” suffix=””]According to a leading market research firm, about 75% of consumer packaged goods and retail products fail to earn even $7.5 million during their first year.[/inlinetweet] This is, obviously, not a good track record. Marketers would be wise to approach new products from a consumer’s point of view and ask “what’s in it for me?” rather than rely on market research too much.