Over the last two decades new product launches have grown at a significant rate, yet the success rate of NPD remains shockingly low. In a demanding market landscape with increased competition, how can brands ensure that new product introductions do not fail and actually achieve a high ROI?
As a Qualitative researcher, working in a behavioral research consultancy that focuses on NPD, Shopper and Packaging, I’ve seen hundreds of product introductions. I’ve seen what works and what doesn’t. Below is a list of the best practices and a checklist to consider the next time you are asked to develop a new product.
We have all seen various Nielsen data in the previous years showing 65% to 85% of launches fail. Some clients told me this rate reaches 90% on their side which is, indeed, a frustrating statistic. The reasons vary – from being too niche to poor communication at the FMOT (First Moment of Truth), from entering the market too early (trying to meet an emerging trend) to an irrelevant positioning of the product. All of these failures were avoidable and could have been identified or fixed earlier in the process.
Is there a miracle solution to avoid failure and significantly increase the chances of success?
Being in research for more than 20 years I am inclined to say that holistic, in-context and behavioral qualitative research can be a game changer.
The post-pandemic research environment has changed a great deal - all to the benefit of qualitative solutions. Specifically, higher digitization of tools and familiarization with it among potential research participants opens doors to numerous research options. Today, we can observe habit loops in real time, document behaviors without bias of alien observers, do a deep dive in the consumption and perceptions context without asking respondents to leave their home, include distant geographies and speak to substantial samples in parallel without affecting timelines.
Done correctly, qualitative tools along your JTBD (jobs to be done) discovery efforts will lower risks and shape the product proposition to better answer consumers’ needs. And “Qual” is only getting better. Today, with the adaptivity, flexibility and digitization of qualitative services we can use them at any stage of development at relatively low costs. And, most importantly, it brings holistic learning opportunities to typically a linear development process.
Why is linear development a barrier for successful NPD?
Although it allows for better planning and is well-suited for big organizations structures, it limits full marketing mix potential understanding in early-stage development and may, in some cases, lead to misguided decisions. In linear development, often every element of the marketing mix is treated in isolation via concept development or product tests or only a few elements are explored together. However, when qualitative is deployed robustly – with marketing mix elements exposed earlier in the development process - we see considerable improvement of action standards at the validation stage.
One objection we often hear is that it is nearly impossible to explore the 7Ps [Product, Price, Promotion, Place, People, Physical (evidence), and Process] in the early stages of NPD. True, but for qualitative exploration we don’t need to present the full 7Ps mix in perfect execution. Rather, we bring together the marketing mix puzzle via the exploration of alternative elements – concepts, products, placements, prices, packaging across different targets. Such an approach, even when using raw ideas or draft executions, enriches the entire process with unforeseen insights and empowers learning synergy across the teams.
What is the best qualitative service to consider for such an ambitious task?
There are plenty of methods to use for early-stage developments - from ethnographic observations, self-documentaries, semiotics, in-home product testing, creative groups with sketch artists to bring ideas to life, kid-parent interviews, friendship pairs, in-store intercepts, and indeed focus groups with category shelf replication to immerse shoppers in context. Thanks to the flexibility of qualitative services, they all can be fine-tuned and adapted based on how far along the NPD has advanced in its development process.
There are, however, certain best practices to consider regardless of the method:
- Understand current consumer habit loops in the category where you want to play – to adapt the launch strategy depending on whether you need to reinforce or break the existing habits.
- Test the product in the appropriate context – be it the shelf (actual or online), the merchandising scenario or even at consumption
- Always seek spontaneous and unbiased feedback. While it is the hardest to crack, it has the potential to unlock better insights
- Expose potential consumers to most of the marketing mix elements alternating the various consumer entry points.
- Involve consumer feedback as early as possible in the development – even brief exploration of the raw ideas among ten participants can save you time and budget at later stages.
- Be careful not to overwhelm your research participants with too many stimuli. For instance, for product tests, limit it to three variants maximum if conducted within a set time frame (like focus groups), though you can bring more stimuli in online communities.
- Consider the full process as correlated dots to connect and build on previous learnings rather than independent stages with check boxes – integrating different qualitative and quantitative modules in parallel when relevant.
One of the best qualitative options for NPD is online communities:
- Online communities are prolonged in time and can last up to several weeks – allowing vast quantities of topics / materials to be covered – which makes it specifically relevant for several marketing mix elements exploration in one go.
- Participation is intuitive and familiar, often gamified to maintain engagement and can be fine-tuned as a story relevant for any category
- Online communities are ideal for product testing as they allow natural setting and consumption context versus a CLT (Central Location Testing) approach. It brings research closer to reality versus other methods and, when relevant, can involve other family members in the discussion (e.g., shared consumption categories or kids NPD).
- Online communication with the moderator and/or other respondents can be varied from task to task – allowing unbiased individual feedback when necessary alternated with open discussions on certain topics to build ideas on the dynamic exchange of opinions. Not to mention the opportunity for clients to observe discussions directly at any time.
- Online communities are also budget and time efficient for different marketing mix elements exposure, whether it’s a new product placement on a digital shelf or an e-com landing page with hero images - to gauge stand out and engagement potential or even test merchandising scenarios in a virtual store or digital promo banners in the context of search engines.
- With online communities you can also extend your target audience or seek bigger samples, which is not possible in classical qualitative research. Therefore, you can not only focus on potential targets but also learn from lapsed users or rejectors to understand behavioral barriers in the category or test new positioning trade-in potential.
- And online communities permit quantitative scales thanks to bigger samples and digitization to obtain attributes (look, smell, feel, touch, taste, after-taste, etc.) evaluation on a per product basis.
My personal favorite attribute of using online communities is the ability to go from insight generation to first draft of marketing mix elements at a speed previously never thought of. Here is a recent example of a new product that was launched in the EU:
- Week One: we started with digital ethnographies to understand consumers habit loops to generate insights based on unmet needs. Working with our client’s marketing group, four potential positioning concepts were developed in the workshop with twenty-eight draft packaging ideas fitting dominant and emerging category codes (applying semiotic analysis).
- Week Two: draft marketing mix elements were exposed with rotation to the same participants, identifying the most promising positioning concept / product / design directions. While in parallel two product prototypes were tested in-home (sent in advance to participants).
- Week Three: respondents evaluated a fine-tuned lead positioning concept, eight packaging designs “fit” and provided optimization recommendation on the product prototypes.
In the above case study, quantitative validation followed and met all the action standards.
It’s critical to note that to achieve the kind of speed and quality described above, the client team – and their agencies - had to work hard during the online communities’ stage to make decisions quickly and to develop stimuli over several days. But, today, I can buy this product in stores, confirming the speed in which online communities can be deployed to significantly decrease time and costs AND elevate success.
The next time you’re beginning the NPD process, I recommend using online communities. However, I strongly urge you to work with a research consultancy that: 1) has significant experience with them; 2) has a strong foundation and sensitivity for behavioral science to avoid the pitfalls that can lead to misguided insights.
If you would like to learn more about our NPD Playground™ and qualitative solutions, please feel free to reach out to me for a no pressure conversation. I will be delighted to speak in detail how we deploy in-context, holistic and behavior-first NPD exploration and testing.
