Presentation on theme: "HOW TO REDUCE YOUR RISK OF NEW PRODUCT FAILURE A.J. Riedel, Sr. Partner, Riedel Marketing Group."— Presentation transcript:
HOW TO REDUCE YOUR RISK OF NEW PRODUCT FAILURE A.J. Riedel, Sr. Partner, Riedel Marketing Group
HomeTrend Influentials Panel Trend-setting, trend-spreading consumers HomeTrend Influentials pick up on new home-related trends and embrace new home goods much sooner than the rest of the U.S. population. The bellwether for the mainstream population
The Story of the HIPsters and the Blender
Tens of thousands of new products are being shown here.
At least half of them will fail.
Most housewares companies are not willing to invest in learning what consumers want and what they will buy.
53% don’t do any concept testing.
47% do not conduct preliminary market assessments.
73% don’t do detailed market studies.
27% don’t do any research studies at all.
A new product failure rate of more than 50%.
What percent of the new products developed by your company in the last five years would you say were a success? Less than 25% Between 25 and 50% Between 50 and 75% More than 75%
Product Development & Management Association did research to discern which NPD practices are associated with higher degrees of success.
More than 75% of the products commercialized by the “best” were successful. Best versus the Rest: Success Rates The BestThe Rest Number of Firms96 (24%)303 (76%) Successes75.5%53.8% Successes-Profits72.4%47.9% Sales from New Products47.6%21.4% Profits from New Products49.1%21.2% Number of Ideas for One Success4.09.2
“The “best” firms do significantly more market research than the rest of the firms.” The “best” invested in market research.
What can housewares manufacturers learn from the PDMA study? Stop treating market research as if it is optional!
The product concept research provided by Riedel Marketing Group helped us make good decisions about which concepts to take to market, at what price points, and which concepts to cut from development efforts. As a result, we saved development time and expense that we would have spent on marginal products and invested that time and money in products with a higher likelihood of success. Doug Taeckens, President, Jokari
Integrating market research into the new product development process means that you get consumer feedback at certain points in the process 1.Consumer Needs Assessments 2.Initial Screening 3.Product Concept Test
How consumer research can be used to come up with winning new products
Goal: to be the market leader in countertop microwave ovens
Their microwave ovens have to be significantly better than what is already on the market in the eyes of the people who are going to buying microwave ovens They need to thoroughly understand microwave oven users.
Consumer Needs Assessment What problems are consumers are having with the products that are currently on the market? Where do current products fall short?
Consumer Needs Assessment
“I wish it was easier to clean.” “I wish it had a self clean feature.” “I wish it had a self cleaning feature...especially for The blow up foods on the sides and top of the oven.” “It is very difficult to clean.”
“I wish it had 2 timers on the microwave – one timer for microwave use and another timer for anything else” “having the kitchen timer seperate from the food timer. At times things are cooking in the oven w/ the timer set & I need to start the micro. I have to cancel my timer to start the food.” “Dual display of timers (e.g. timer and countdown for what is in microwave)”
“I wish it would give you an option not to have the inside turn. Sometimes larger items do not turn in a microwave because of the shape..” “Ability to turn off the rotating plate feature so that large rectangular dishes won't bump the side walls when they rotate..”
Four distinct segments of microwave oven users
Outcome of consumer needs assessment What functions and features to put into their microwave ovens What positioning strategy to use to differentiate them
Initial Screening Purpose: get feedback on new product concepts early in the new product development process before much time and money has been invested in product development.
Initial Screening 5-point bipolar scale questions –Likability –Purchase likelihood –Value –Uniqueness Open-ended “why” questions for diagnostics Concepts have to outscore the competitive products on likeability, purchase likelihood, value and uniqueness
Product Concept Test to confirm the consumer appeal of the microwave oven concepts
Product Concept Test Open-ended questions about what they like and don’t like What price they would expect to pay Purchase likelihood 5- point scale questions Open-ended questions about why they would or would not purchase Purchase likelihood scores had to meet or exceed benchmark
How do you reduce your risk of new product failure? How do you increase your chances of new product success?
Integrate market research into your new product development process Integrate market research into your new product development process
Maximizing New Product Success TOOLKIT A Housewares Executive’s Guide on How to Increase Sales and Maximize Profitability Maximizing New Product Success Whitepaper Case study Diagnostic assessment “How To Select A Market Research Professional” checklist Scoring worksheet Special offer TO GET YOUR COMPLIMENTARY COPY, GIVE ME YOUR BUSINESS CARD
A.J. Riedel Sr. Partner, Riedel Marketing Group (602)