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The ability to develop products and services that offer fresh ideas and are relevant to customers is no easy task, especially in a world where products are quickly commoditized. As a result, few businesses get it right, and new products suffer a high mortality rate (failure rates vary from 33% according Booz, Allen & Hamilton, Inc. to 60% according to Silk and Urban).Yet, for many companies long-term success is linked to innovation and adoption.

When a company is market-centric, Marketing plays a key role in the product development process. Marketing is responsible for providing four cornerstone pieces:

  1. A clear understanding of the target and the target market’s needs/wants
  2. The link between the concept and the requirements
  3. Competitive analysis
  4. Positioning

Understanding the wants and needs of the target customers is the first and probably most important step. Your customers’ wants and needs create the relevant link between your solution and the customer. The more you understand your customers’  core values as they relate to your solution the tighter you can make the connection between how the product will fit into the customer’s process and/or life.

The customer’s value structure provide critical information for positioning.When researching the wants and needs you will want to understand the “why” as much as the “what”. When you can answer “Why do they want what they say they want?” your focus is on your customers’ unfulfilled needs, problems/failures with current solutions, modifications and benefits.  Answers to this question provide insight into benefit-oriented root wants and needs of an ideal product.

Keen insight into the competitive landscape is also essential to new product success. You must know the category the new product will play in so you can properly identify the competitive set. Identify both obvious direct competitors and any product/process that can serve as a substitute for the solution you are creating.

You’ve determine there is a need, that you have a solution of value, and that you can compete. Now you  need to create a believable and ownable position in the market.

Marketing is responsible for these four critical steps, half of the steps associated with the new product development process.

8 Key Components to the New Product Development Process

Bringing new products to market is a critical aspect for generating value. Shareholders equate value with not how good a company was in the past but with what you are doing today and tomorrow to continue to sustain and grow value. This means that the value of your company is centered on its ability to think long-term about the future.

Part of thinking about the future involves developing and launching new products. It is estimated that 46% of the resources that companies devote to the conception, development and launch of new products go to ventures that don’t succeed – they fail in the marketplace or never even make it to market. So having an effective process for new product development is very important. Many companies use a Stage-Gate, a term coined by Robert Cooper in the 1980s to help with the development and evaluation of new products. According to a Product Development & Management Association (PDMA) best-practices study, 68% of leading U.S. product developers now use some type of Stage-Gate process. A Stage-Gate process is a conceptual and operational road map for moving a new-product project from idea to launch.

new product launch plan

8 Components for Your Product Launch Success

Consider employing these 8 key components for your New Product Development Process (NPD)  to ensure overall marketability of your new product:

Step 1: Ideation.

Innovation takes inspiration.  Two common analysis techniques employed in the ideation process are STEP and SWOT.

STEP stands for Social, Technological, Economic, and Political (this is also sometimes called PEST). It is a framework for the analysis of these macro-environmental factors. The social factors often reviewed are the demographic and culture aspects. Technological factors are ones that can impact an organization’s ability to create barriers to entry, reduce minimum efficiency production levels and influence outsourcing decisions include R&S activity, rate of technological change, and automation. The purchasing power of potential customers, the cost of capital, economic growth, exchange rates, inflation rates, and interest rates are often taken into account when analyzing economic factors. Political factors include government regulations and legal issues. By combining all of these factors, an organization can create a view of the big picture. For more about STEP, check out Peter Drucker’s book, Managing in the Next Society.

A SWOT analysis, which stands for strengths, weaknesses, opportunities and threats, provides insight into how to match an organization’s resources and capabilities within the context of the competitive environment. It is instrumental in strategy formulation and selection. Environmental factors internal to the organization are evaluated as either strengths or weaknesses and those external to it as opportunities or threats. Strengths are represented as resources and capabilities that can be used to develop and/or enhance an organization’s competitive advantage (these include patents, brands, reputation, cost advantages, access to resources, distribution channels, etc). The absence of these strengths is viewed as weaknesses. The external environment analysis may reveal new opportunities to take advantage of unfulfilled customer needs, new technologies, changes in regulations or trade barriers, as well as threats such as new regulations, the emergence of substitute products, and shifts in customer trends. Once the information is gathered, a matrix is constructed. By using the matrix, organizations attempt to develop strategies that will allow them to pursue opportunities that will leverage their strengths and overcome their weaknesses and identify ways to use its strengths to overcome vulnerabilities to external threats and establish a defensive plan to prevent the organization’s weaknesses from making it susceptible to external threats. For more on this topic, check out Robert Bradford and Peter Duncan, and Brian Tracey’s book, Simplified Strategic Planning: A Guide for Busy People who want Results Fast!

Step 2: Screening.

Not every idea is a good idea. It’s important to establish specific criteria to help quickly determine whether to continue or drop a potential new product or service. Using agreed upon criteria help eliminate poor projects from the idea-hopper quickly. Even if an idea doesn’t turn into product, keep it in the hopper because it can prove to be a valuable asset for future products and a basis for learning and growth.

Step 3: Concept testing.

As Gaurav Akrani has said, “Concept testing is done after idea screening.” And it is important to note, it is different from market testing. In addition to checking patents and other legal issues, and conducting design due diligence, now is the time to start developing the value proposition, positioning and messaging framework so you can begin test the concept with existing and prospective customers.  The key question to answer at this step is “Does the potential customer understand, need, or want the product/service?” A product whose value proposition doesn’t resonate in the market will not go far.

Step 4: Metrics for Success

The New Product Development process is an ideal time to establish metrics that will be used to monitor and measure progress as well as success. Include activity metrics, such as average time in each stage, as well as output and outcome metrics that measure the value of launched products, rate of product adoption, and percentage of sales from the new product.

Step 5: Market Test

No product should come to the market before it is primed. Market tests are critical. Testing panels, focus groups, alpha and beta testing all provide valuable information allowing product improvements. Not to mention helping to generate a small amount of buzz.

Step 6: Launch Plan

You’ve perfected the technical aspects of the product.  You’ve honed the value proposition.  You have the product processes in play and all the accessories to support the product, such as landing pages, white papers, technical literature, demonstrations, sales materials and presentations, and so on.  Now it’s time to create the launch plan.

Remember that your plan needs to include elements to support these stages in the consideration process:  inform/educate, persuade and motivate.

The informative stage seeks to convert an existing need into a want or to stimulate interest in a new product. We’d recommend you build your strategy around informative programs because they are important for promoting complex and technical products. The purpose of these initiatives should be to increase awareness, explain how the product works, suggest uses for the product, and build company image.

Once the product enters the growth stage of its life cycle then persuasive initiatives will be needed to stimulate consideration. These programs typically focus on encouraging brand switching, changing perception, etc.

Advertising and public relations can be very effective for gaining attention and developing interest and desire. These tend to be less effective at producing action. Sales promotions tend to be more effective at the desire and action stages of the purchasing decision process. Personal selling techniques have the greatest impact at the interest and desire stages.

Use this product launch checklist to help with your planning.

Step 7: Market Momentum

Your new product is ready for prime time. The product has been validated and you are experiencing market traction. Customers are purchasing your good or service – perhaps these are early adopters. This is a good time to check back in with the market to understand what is required for the early and late majority and even the laggards to consider your offer. This may require you to make market strategy refinements and build out additional customer journey maps to support your demand generation, customer acquisition, and market share targets.

Step 8: Post Launch Review and Continuous Improvement

A product launch serves as an opportunity to review your NPD process efficiency and look for continues improvements. Most new products are introduced with introductory pricing. Continue to explore way to continuously differentiate customer needs as your product ages.

New product development hinges on your ability to synthesize customer insights and market intelligence, to create an innovative product to meet customers’ needs.  It is the responsibility of Marketing to help identify product innovation opportunities, gather market requirements, segment the market, select the right target markets, define the value proposition and communicate the value of new products to the target markets.

Contact us if you would like help spotting innovation opportunities, capturing, analyzing, and quantifying the data about what customers want to buy, validating and commercializing your new products, and creating a go-to-market strategy designed to impact market traction and penetration.

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