Are Your New Products Worth Their Weight In…Anything?
by Felicia Rogers
How do you know if a new product will be successful? Will people like it? Will they buy it? Will they tell others about it? Will they give positive ratings and reviews? Will they buy it a second time? And a third? Will we make a profit on it? How quickly?
These are the types of questions new product developers ask themselves, often because they have to answer to others who are asking (hounding) them with the same ones. So how do we tackle the critical questions that must be answered in the new product development process? There are a number of ways to go about this. Some of the more fashionable ones focus on volume (large number of ideas) and speed (generate and undertake ideas quickly). These “fail fast” approaches can sometimes result in big wins at relatively low costs. But at other times, they just result in failure. So what do we do to help ensure new products are truly worth their weight in gold?
Historically, several stages have been involved in the new product development (or “NPD”) process, each with an important role to play, each with a critical outcome to consider. To the extent possible, these tried-and-true steps should be included in virtually every company’s NPD process. They can each be tweaked, modernized, or customized to fit the product or service category and the target audience, but each step has a vital role in the success of new products. Let’s break the process down into its typical components.
Ideas must come from somewhere, and they can range from copycat or me-too product ideas to revolutionary innovations that disrupt the market and send competitors scrambling to hold onto their businesses as they’ve known them. Often companies develop ideas by gathering an internal group of executives or managers, talking about what’s going on in the market, and ideating around opportunity areas they’ve identified. This process is productive up to a point. The team is very familiar with the industry, has data to inform them on what has been selling or, perhaps, on what customers wish they had, and maybe on new technologies that are on the horizon. However, the same knowledge can cause the internal process to fall short. The participants know too much. As a result, there can sometimes be a “we’ve tried that before” or a “that won’t work” attitude. Not because anyone is trying to destroy the creative process, but because the collective knowledge and experience can inadvertently set up barriers to outside-the-box thinking.
Another often-attempted method is to use consumer focus groups to explore opportunities for new products to reach untapped markets. Focus groups are great exploratory tools for understanding attitudes and motivations. But the typical focus group participant is not inherently creative. She can talk about where she shops, what she buys, the products she uses, the brands she prefers, and so on. But when asked to come up with new ideas, rarely are they revolutionary. Idea-centric creativity is simply not in the skillset of the average person.
A more productive way to develop truly breakthrough new product ideas is to involve outside consultants or, even better, “everyday consumers” who have a unique ability to think creatively and to develop lots of innovative ideas. A group like Decision Analyst’s Imaginators® community of highly innovative consumers is very productive in this ideation process. They work collaboratively with one another and typically produce hundreds of idea fragments or starter ideas that can be developed into full-fledged product concepts. Led through a series of creativity exercises by professional workshop moderators, Imaginators® work well on their own, in groups (in person or online), and alongside core customers or cross-functional teams from a company’s own staff. These very imaginative consumers bring an outside perspective to the table. They’re easily able to think outside the box since they’re not bound by any past experiences, internal politics, or production limitations. They are free to dream about what could be.
Concept Development & Refinement
Once the core ideas have been identified, they must be fashioned into testable concepts. At Decision Analyst we like to present concepts in the form of a basic print ad. Each should include a working product name and a brief description including form, size, function, and key benefits. If it makes sense, a sketch of the package and pricing can be included. The format of your company’s test concepts is important, but the key to success is consistency. From one concept to the next, and from one test to the next, the same elements should be presented in the same way, at the same level of finish. Uniformity allows you to establish norms or action standards, and it enables you to compare results over time to help gauge the market potential of each concept.
At this stage qualitative research (focus groups or one-on-one depth interviews) is often used to get very early reactions to a large number of concepts. More importantly, though, the language used should be investigated to ensure that the concepts effectively communicate the ideas and that the ideas themselves can be explored and refined following this early research.
Concept Evaluation & Forecasting
Here is where we enter into the consumer testing phase. In some cases, a large set of early-stage concepts is assessed at a high level and sorted into two main categories: the more promising and the less promising ones. Decision Analyst’s ConceptScreen® system can be used to gather key predictive metrics on several ideas to help identify the more promising concepts. Those with greater potential are further fleshed out and put into a final-stage, concept-evaluation system like our Conceptor® tool, where Year-One forecasts can be developed. Here, a more in-depth evaluation is conducted on a handful of final concepts to further solidify the predictive metrics (e.g., purchase intent and uniqueness), and to get into diagnostics for final improvements, as well as volumetric forecasting of the early-market potential for the product.
Prototyping & Assessment
Industrial designers then go to work building prototypes for further assessment. Depending on the product category, prototypes can be tried and evaluated through central-location tests or in-home testing. Consumables and even large durable goods can be tested in homes, providing the most natural reactions to the product when potential buyers use it where and how they normally would.
Test Marketing & Performance Measurement
Now that the prototype has been tested and refined, the product is ready for limited production and distribution. During this time, marketing support should be substantial to establish awareness and encourage trial. Sales data will tell part of the story—how well is the product selling? Monitoring of social media and other digital media (reviews and ratings) is also helpful. Test market tracking can also be utilized to help gauge awareness and consumer reactions. Often this is done in at least two waves: a “prewave” prior to test market launch and then a “post” measurement once enough time has passed to establish expected awareness and trial levels. This type of survey-based, test-market tracking is important to help round out the story of why the product is or is not succeeding. Data gathered at this stage will help the company tweak the key marketing elements: the product itself, the positioning and messaging, distribution, and pricing strategy.
You’re finally ready for a broad roll-out of the new product. A fair amount of time has passed throughout this process. You’ve done your homework, and you know this product has a very good chance of being successful. The idea was born out or relevant consumer experience and a real need identified in the market. You did your due diligence in the concept development and refinement processes, and the final concept tested very well. The forecast says year-one sales will be sufficient to generate the revenue management desires. Early results from the test market are positive.
The good news is all this data can be used by your sales force to gain entry into large national retailers; they love data, even demand it. So build relationships with the key buyers who can help you get shelf space. Forge ahead. Your new product is sure to be worth its weight in gold.
In closing, I’ll admit what you’re thinking. This all sounds time-consuming and expensive. And it can be. Not every company can or will move systematically through every single step, and that’s okay. The key is to ensure there is a method to the madness: order, checks, and balances, and a process. Sticking to a process will pay off.
About the Author
Felicia Rogers (firstname.lastname@example.org) is an Executive Vice President of Decision Analyst. She may be reached at 1-800-262-5974 or 1-817-640-6166.
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