1. BEAT THE ODDS: HOW TO WIN THE NEW PRODUCT GAME A.J. RIEDEL
Sr. Partner Riedel Marketing Group
2. 95%Thats the percent of heavy bettors those who placed the
largest number of total wagers over a two year period -- who lost
money. Its also percent of new products that fail in any given
year. Source: How Often Do Gamblers Really Win?, Wall Street
Journal, Oct. 11, 2013
http://www.wsj.com/articles/SB10001424052702304626104579123383535635644
3. Think about it: The odds that your new products will be
successful are about the same as the odds that a heavy gambler will
win money in the long term.
4. Theres not much gamblers can do beat the odds. Even the
savviest most experienced gambler is going to lose far more money
than he wins in the long run. There is, however, a lot YOU can do
to beat the odds.
5. Why Do New Products Fail?
6. Knowing causes of new product failure can screen out
ill-fated ventures before too much time and money has been
invested.
7. Lets take a look at three of the biggest flops in
history.
8. THE LASERDISC 1980
9. THE LASERDISC 1980 The LaserDisc, introduced in 1980, had a
number of benefits over the home video formats of the day, VHS and
Beta. Most notably, it was superior in sound and picture quality.
The format never gained widespread use in North America outside of
videophile circles. By 1998, 18 years after Laserdiscs were first
introduced, only 2% of US households owned LaserDisc players. By
the early 2000s, the LaserDisc had been completely replaced by the
DVD in North America.
10. THE APPLE NEWTON MESSAGE PAD 1993
11. THE APPLE NEWTON MESSAGE PAD 1993 Under John Sculleys
leadership, Apple started work on the Newton in 1991. By todays
standards, the MessagePad was a pretty basic PDA. It could take
notes, store contacts, and manage calendars. You could use it to
send a fax. In 1993, the first product in the Newton Line, the
MessagePad, was introduced at the Boston Macworld Expo and took the
show by storm. But then word started getting out that the
handwriting recognition didnt work properly in the debut models.
Handwriting recognition was supposed to be Newtons killer feature,
but it was the feature that probably ultimately killed the product.
The Newton Line didnt sell in huge numbers. Whats more, Steve Jobs
hated it. He raged against the device for its poor performance (and
because it was Sculleys innovation). And so when Jobs at last
wrested back control of his company in 1997, he scuttled it.
12. THE SEGWAY 2001
13. THE SEGWAY 2001 The Segway, a two-wheeled, self-balancing
battery electric vehicle, was launched in 2001. Inventor Dean Kamen
pronounced that it was going to revolutionize transportation. He
said that it would be to the car what the car was to the horse and
buggy. Kamen predicted that he would sell 50,000 Segways in the
first year The $5,000 Segway failed to gain significant market
acceptance. By mid 2003, the company had only sold 6,000 units in
total. Unlike the Laserdisc and the Apple Newton, the Segway is
still around. You can take a Segway tour in almost every major city
in the US. You see it in use by security guards and law
enforcement. What you wont see is consumers zipping around on their
own personal Segways.
14. Why did these new products fail?
15. TOO EXPENSIVE Laserdiscs cost up to 5 times more than VHS
tapes and the players cost at least twice as much as a VCR. The
Newton cost about $700 for the first model with later models
costing up to $1000. The Segway retailed for $5,000. If you were
looking for an alternative to a car, you could buy a high-end
street safe scooter for less than half that amount.
16. PRODUCT DESIGNS THAT WERE NOT USER FRIENDLY If you were
watching a movie on a LaserDisc, you had to stop the disc and flip
it to it's other side. The MessagePad was roughly the slze of
videotape and weighed almost a pound, It was too large and heavy to
be considered pocket-size. The Segway was too small and too slow
for riders to feel comfortable on roadways yet, too bulky and fast
to be allowed on sidewalks in most cities.
17. PRODUCT THAT DIDNT MEET CONSUMER EXPECTATIONS You couldnt
record on a LaserDisc. The Apple MessagePad operated too slowly;
certain actions, such as scrolling through notes, took too long and
its handwriting recognition was fairly inaccurate. The Segway
weighed more than 80 pounds and could only go 11 miles before the
battery had to be recharged.
18. Why Do New Housewares Products Fail?
19. Manual Fruit & Vegetable Choppers
20. Manual Fruit & Vegetable Choppers Over the past couple
of years, kitchen tool and gadget companies have launched all sorts
of contraptions designed to chop, slice, and dice fruits and
vegetables. Very few of these multi-blade gadgets have really
caught fire with consumers.
21. Manual Fruit & Vegetable Choppers Over the past couple
of years, kitchen tool and gadget companies have launched all sorts
of contraptions designed to chop, slice, and dice fruits and
vegetables. Very few of these multi-blade gadgets have really
caught fire with consumers.
22. 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% LACK OF OR POOR
USE OF RESEARCH POOR EXECUTION POOR PLANNING POOR PRODUCT CONCEPT
According to senior housewares executives, there are four key
causes of new product failure. Source: Survey of Senior Housewares
Executives, Nov. 2014
23. 0% 10% 20% 30% 40% 50% 60% 70% Lack of
differentiation/"me-too" product Product does not meet consumer
need/has no reason for being A new product will fail if the concept
is fundamentally flawed. Source: Survey of Senior Housewares
Executives, Nov. 2014
24. 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Poorly managed
Inadequate investment/budget Wrong channel strategy Wrong timing
Poor planning can lead to new product failure. Source: Survey of
Senior Housewares Executives, Nov. 2014
25. 0% 5% 10% 15% 20% 25% 30% 35% Sales/sell-in issues Not
enough or wrong kind of marketing wrong price Poor design Product
performance/quality issues Ineffective packaging A new product will
fail when the plan is poorly executed. Source: Survey of Senior
Housewares Executives, Nov. 2014
26. 0% 10% 20% 30% 40% 50% 60% 70% Not enough market analysis
Not enough consumer research Poor use of research can lead to new
product failure. Source: Survey of Senior Housewares Executives,
Nov. 2014
27. With so many mistakes that can be made at the concept,
planning, and execution stages, you may be wondering how you can
possibly increase the likelihood that the new products you launch
will be successful.
28. Do you remember the 1991 film City Slickers? The movie was
about Mitch, played by Billy Crystal, an unhappy Manhattan yuppie
having a mid-life crisis, who is roped into joining his two friends
on a cattle drive in the southwest. In this scene, Curly, the
crusty irascible trail boss, is talking to Mitch about the meaning
of life.
29. What does this clip of the exchange between Curly &
Mitch have to do with new product failure?
30. Curly said that there is one secret to life. One thing,
just one thing. You stick to that and everything else dont mean
shit.
31. There is also one secret to new product success.
32. Your new product must meet a NEED or solve a PROBLEM for
the consumer.
33. If the Laserdisc, Apple MessagePad, and Segway had been
priced more reasonably and didnt have the product design problems
they did, would they have been winners? I doubt it. Because these
products did not meet needs or solve problems for the
consumer.
34. THE LASERDISC 1980
35. THE APPLE NEWTON MESSAGE PAD 1993
36. THE SEGWAY 2001
37. Why is it so important for a product to meet a NEED or
solve a PROBLEM for the consumer?
38. If consumers dont think the product will meet a NEED or
solve a PROBLEM for them, it is HIGHLY UNLIKELYthey will purchase
it.
39. There is an almost perfect correlation between perceived
NEED and PURCHASE INTEREST
40. 66% 73% 67% 80% 74% 80% 0% 10% 20% 30% 40% 50% 60% 70% 80%
90% Purchase Interest Buzz Worthiness Need Likeablity Uniqueness
Believability NEST NEST Learning Thermostat 67% of survey
respondents said that the Nest Learning Thermometer would meet a
need or solve a problem for them. 66% said they would be interested
in purchasing the Nest. I would love to have one. I am always
changing the temperature and forget to make it more
energy-efficient when I am not home. I love the idea of controlling
it with my phone. Sounds like a great idea, since I am always
getting in trouble by not adjusting the thermostat before I leave
or when I get home!
41. 66% 73% 67% 80% 74% 80% 0% 10% 20% 30% 40% 50% 60% 70% 80%
90% Purchase Interest Buzz Worthiness Need Likeablity Uniqueness
Believability NEST NEST Learning Thermostat 67% of survey
respondents said that the Nest Learning Thermometer would meet a
need or solve a problem for them. 66% said they would be interested
in purchasing the Nest. I would love to have one. I am always
changing the temperature and forget to make it more
energy-efficient when I am not home. I love the idea of controlling
it with my phone. Sounds like a great idea, since I am always
getting in trouble by not adjusting the thermostat before I leave
or when I get home!
42. IKETTLE 9% 19% 8% 14% 38% 64% 0% 10% 20% 30% 40% 50% 60%
70% Purchase Interest Buzz Worthiness Need Likeablity Uniqueness
Believability iKettle Wi-Fi enabled electric teakettle controlled
with a dedicated smartphone app 8% of respondents said that the
iKettle would meet a need or solve a problem for them. 9% said they
would be interested in purchasing it. I don't think this would meet
a need for me. My current coffee maker has a timer and it is
perfect. This is not something that I need. I do not need to
control my kettle from my phone.
43. IKETTLE 9% 19% 8% 14% 38% 64% 0% 10% 20% 30% 40% 50% 60%
70% Purchase Interest Buzz Worthiness Need Likeablity Uniqueness
Believability iKettle Wi-Fi enabled electric teakettle controlled
with a dedicated smartphone app 8% of respondents said that the
iKettle would meet a need or solve a problem for them. 9% said they
would be interested in purchasing it. I don't think this would meet
a need for me. My current coffee maker has a timer and it is
perfect. This is not something that I need. I do not need to
control my kettle from my phone.
44. THE ONE THING: Your new product must meet a NEED or solve a
PROBLEM for the consumer.. NEST got it right. IKettle did not.
45. How Do You Get That ONE THING Right?
46. How Do You Get That ONE THING Right? The best way to answer
that question is with case studies.
47. DOWNY SINGLE RINSE Source: Game-Changer by A.G. Lafley,
former Chairman and CEO of Procter &
48. DOWNY SINGLE RINSE Source: Game-Changer by A.G. Lafley,
former Chairman and CEO of Procter & In the early 2000s,
Mexican market share for Downy fabric softener was slow and
stagnant. P&G needed to develop products that were specific to
the needs of the lower income consumer. So P&G product managers
went out to live with poor Mexican families for a couple of
days.
49. DOWNY SINGLE RINSE Source: Game-Changer by A.G. Lafley,
former Chairman and CEO of Procter & In the early 2000s,
Mexican market share for Downy fabric softener was slow and
stagnant. P&G needed to develop products that were specific to
the needs of the lower income consumer. So P&G product managers
went out to live with poor Mexican families for a couple of days.
By living with their consumers, P&G product managers learned
that lower-income Mexican women liked to use softener, they had
high standards for performance, and doing laundry was arduous and
time consuming. A typical load of laundry went through a six-step
process: wash, rinse, rinse, add softener, rinse, rinse which
required plenty of water. Not so easy for rural women who had to
lug buckets back from wells or communal pumps. Not so easy for City
dwellers either because they typically only had running water for a
few hours a day.
50. DOWNY SINGLE RINSE Source: Game-Changer by A.G. Lafley,
former Chairman and CEO of Procter & In the early 2000s,
Mexican market share for Downy fabric softener was slow and
stagnant. P&G needed to develop products that were specific to
the needs of the lower income consumer. So P&G product managers
went out to live with poor Mexican families for a couple of days.
By living with their consumers, P&G product managers learned
that lower-income Mexican women liked to use softener, they had
high standards for performance, and doing laundry was arduous and
time consuming. A typical load of laundry went through a six-step
process: wash, rinse, rinse, add softener, rinse, rinse which
required plenty of water. Not so easy for rural women who had to
lug buckets back from wells or communal pumps. Not so easy for City
dwellers either because they typically only had running water for a
few hours a day. The big ah ha was discovering how valuable water
is to lower income Mexicans.
51. DOWNY SINGLE RINSE Source: Game-Changer by A.G. Lafley,
former Chairman and CEO of Procter & In the early 2000s,
Mexican market share for Downy fabric softener was slow and
stagnant. P&G needed to develop products that were specific to
the needs of the lower income consumer. So P&G product managers
went out to live with poor Mexican families for a couple of days.
By living with their consumers, P&G product managers learned
that lower-income Mexican women liked to use softener, they had
high standards for performance, and doing laundry was arduous and
time consuming. A typical load of laundry went through a six-step
process: wash, rinse, rinse, add softener, rinse, rinse which
required plenty of water. Not so easy for rural women who had to
lug buckets back from wells or communal pumps. Not so easy for City
dwellers either because they typically only had running water for a
few hours a day. The big ah ha was discovering how valuable water
is to lower income Mexicans. With that insight, P&G was able to
identify a problem to solve (making laundry easier and less water
intensive) and come up with Downy Single Rinse.
52. Scott came up with the idea for Savino the way most
entrepreneurs do he had a problem that was not being solved by
products on the market and he thought he could create one that
worked better. Before investing too much time and money, he
confirmed that Savino met an unsolved problem by talking with other
wine enthusiasts. He found out that other wine enthusiasts had the
same problem with wine preservation.
53. Once Scott and his team had a design they liked, they
wanted to find out if wine enthusiasts thought the product did a
good job of preserving wine. They did 20+ blind taste tests of wine
that had been stored in the Savino carafe for several days compared
to wine from a newly opened bottle. The blind taste tests confirmed
that yes, the carafe they had designed actually works Savino beat
the other wine preservers on the market and did the best job of
keeping the wine fresh for several days.
54. Scott knew from talking to wine enthusiasts that the
concept of a more effective wine preservation system was appealing
to them. But was the product design they had come up with appealing
to wine lovers? Scott showed a rendering of the product to 50
groups of wine-loving friends and acquaintances. The feedback was
positive; the overwhelming response was if this works the way you
say it does, I would be interested.
55. At this point, Scott and his team started showing a 3D
model of the product to manufacturers to make sure the product
could be manufactured at a reasonable price. Every time they hit an
obstacle that required them to modify the product design, they went
back to consumers to make sure that they still liked the product.
The type of research they did depended on whether the design change
affected the function or was cosmetic. If product functionality
changed, they sent prototypes out. If the change were cosmetic,
they would hold a focus group or send a survey via e-mail.
56. To confirm that Savino was intuitive and user- friendly,
Scott and his team conducted a set of focus groups once they had
finalized product design. Test participants were given prototypes
and a brief explanation of what the product does. Then they had to
figure out to use it on their own. Before investing in molds, Scott
and his team wanted to confirm that wine enthusiasts would actually
purchase Savino. They conducted a final set of focus groups to find
out if the product evoked a strong positive emotional response in
wine enthusiasts. They knew they had a product that would resonate
with wine drinkers when the test participants response was This is
fantastic. I want it. Where can I get it?
57. Consumers sometimes say that they will buy a product but
when it comes to actually spending their hard earned dollars, they
dont actually buy. Knowing that there can be a disconnect between
what consumers say and what they do, Scott and team mounted a
Kickstarter campaign to validate that people would actually buy the
product. Consumer response was so positive that they ended up
raising significantly more than their original pledge amount and
garnered the most backers of any wine related project in the
history of Kickstarter.
58. THE ONE THING: Your new product must meet a NEED or solve a
PROBLEM for the consumer.. P & G got it right. Scott got it
right.
59. FIVE STEP PROCESS
60. Step One: They got to know their consumer really well.
P&G management knew there was a gap between what its brands
were offering and what lower-income consumers wanted. They admitted
that they were pretty ignorant about their target consumers. They
had to get out of their offices and become immersed in the real
world and daily routines of lower income consumers. Scott did not
need to take such drastic measures to get to know his consumer.
Because hes a passionate food & wine guy and very active in the
food-and-wine scene in Sonoma County, he and his foodie friends are
the target consumer.
61. Step Two: They identified a problem to solve. P&G
gleaned insights from their in-home visits and used those ah has to
identify a problem to solve. Scott talked to wine enthusiasts about
wine preservation and tested competitive wine preservation
systems.
62. Step Three: They came with a new product that would solve
the problem. P&G came up with a product that reduced the
six-step laundry process to three stepswash, add softener, rinse
which would save consumers an enormous amount of time, effort and
water. Scott and his team designed a carafe that keeps wines fresh
days after opening.
63. Step Four: They tested the concept with their target
consumers to make sure that consumers thought the product solved a
problem. Scott and his team did more than 20 blind taste tests of
wine to make sure that the carafe they had designed actually
worked. Then they showed renderings of the product to 50 groups of
wine-loving friends and acquaintances. .
64. Step Five: They tested throughout the new product
development process to ensure that consumers liked the final
product as well as they liked the first product concept. Every time
Scott and his team hit an obstacle that required them to modify the
product design, they went back to consumers to make sure that they
still liked the product.
65. Will your new product meet a NEED or solve a PROBLEM for
the consumer?
66. Why is it so important for a product to meet a NEED or
solve a PROBLEM for the consumer?
67. If consumers dont think the product will meet a NEED or
solve a PROBLEM for them, it is HIGHLY UNLIKELYthey will purchase
it.
68. Can You Answer These Questions?
69. Can You Answer These Questions? What consumer problem does
your new product solve?
70. Can You Answer These Questions? Does your new product solve
that problem better than the products that are on the market
today?
71. If You CANT Answer The Questions I CAN HELP YOU GET THE
ANSWERS. CALL OR E-MAIL TODAY TO FIND OUT HOW.