Despite a business’s best intentions and excessive preparation, there’s always a chance for product launches to fail:
- The new product doesn’t live up to its claim.
- The new product creates a new market category and needs a significant amount of customer education but can’t acquire it.
- It’s a ground-breaking product without a market.
- The business can’t support rapid growth rates.
These are just a few reasons why market research needs to be conducted before product development occurs. In fact, 75% of consumer packaged and retail products fail to earn even $7.5 million during their first year because of the transient nature of customer shopping behavior. And under 3% of new consumer packaged goods exceed $50 million in first-year sales (the hallmark of a successful launch).
NPD processes can fail because companies are using outdated research or gut instinct to move new products to the next stages of development instead of relying on fact-driven market research.
Companies also need to avoid tunnel vision about the product itself and incorporate the sales process into their knowledge base, so that product rollouts succeed. And finally, they need to test their functions with a proven product market research process.
