Editorial: A Horror-Scope for 2008 - Columns

Our December 2007 cover feature, “Hot New Products 2007” mentioned that Hotspex creates new products; the company actually delivers marketing research insights.

215725302

BNP_GUID_9-5-2006_A_10000000000000262553

43571995

Is February too late to make a prediction for 2008? I’m making one anyway, based on results of our 2008 New Product Development Survey (page 30), conducted by Clear Seas Research. Maybe I’ll be more upbeat and treat my prediction like a horoscope in that this is what I see for the coming year, but individuals have the power to control it: New products being launched in 2008 have a diminished chance of success. Rather bold, don’t you think? Considering that the new product failure rate in the CPG industry is 80 to 90 percent, my statement isn’t much of a stretch, but it’s grimmer than years past. Findings from our New Product Development Survey indicate that fewer companies are adhering to a new product development plan, or a product innovation charter (PIC), as Aaron Brody and John Lord refer to it in “Developing New Food Products for a Changing Marketplace, Second Edition” (CRC 2008). Fifty-eight percent of respondents to this year’s survey indicate they’ll follow an established product development plan, down from 67 percent in 2007. Nine percentage points is not a significant drop, but it’s alarming when just more than half the industry is adhering to a plan. “Succesfully innovative companies focus their new product efforts with a product innovation charter, a strategy statement that guides new product development by establishing the agenda and direction for the organization’s new product development activities,” according to “Developing New Products for a Changing Marketplace.” Heck, the book even provides the elements of a charter. These are not secrets to new product success, they are basic elements of it. Not having a plan sets the tone for the rest of the process. If the fluid process of NPD runs through a pipeline, then the pipeline is now leaking. The NPD Survey reveals more holes: 86 percent of product developers employ cross-functional teams, down from 92 percent last year. Fewer are following a game plan, and fewer are using the team approach. It seems that product developers are also making infrequent use of supplier relationships, which last time I checked, offer more services and expertise than can be included in a product catalog. What about post-launch evaluation? That seems to be one of the biggest holes, as it consistently ranks low in the hierarchy of importance of product development phases. Launch is where all the elements of new product development come together: The dramatically different product really delivers a benefit to the consumer and in such a way that any competitive product doesn’t stand a chance. But what if the consumer can’t find the product, or your message isn’t getting to your audience? How do you fix that? Processors admit there are numerous failures. But a lot of the failure, they believe, stems from “not meeting consumer expectations” or other deficient market research efforts. That’s a positive determination, but there are so many other holes that duct tape simply can’t mend. It’s important to remember how valuable new products are to a company. According to “Developing New Food Products for the Changing Marketplace,” “New products and new SKUs are still the best way to drive top-line growth,” and “innovative new products potentially reap more rewards” than line extensions. It’s true there are a lot of unknowns in new product development, including a universal definition of “success.” But with so many unknowns, why would you mess with what has been proven?

71983

Columns

193

71752

/Articles/Columns

Columns

true