Nielsen, the research company, just announced a new "product innovation approach" that it claims can help companies improve the success rate of new product launches from what it says is typical (10%) to as high as 75%.
Unveiled during Nielsen's Consumer 360 conference this week in Orlando, Florida, USA, the new approach, which curiously doesn't seem to have a formal name, comprises 12 success factors or steps to innovation. Vicki Gardner, Nielsen's senior VP for product innovation North America, explains that these criteria can help marketers know where to focus their efforts in terms of developing a new product and making it succeed once it's on the market, leading to better investment of new product marketing money. Nielsen says this money averages $US15 million among US companies, reaching up to US$60 million annually for some.
To develop this new approach, Nielsen says it tracked 600 new product launches and tested 20,000 initiatives (not defined). Here's what it came up with:
1. Distinct proposition
3. Message connection
4. Clear and concise message
5. Substantial need or desire
6. Product's advantage
8. Acceptable downsides
Point of purchase
10. Acceptable costs
11. Product delivery
12. Product loyalty
All of these seem pretty commonsense and, well, no brainers. Of course, the important thing is the detail behind the steps and how you put them into action -- and I'm sure Nielsen won't share any of that information unless you pay for it!
Innovation and new product development are vitally important to business success, especially for consumer packaged goods such as petfood. The continued growth of the global petfood market can be at least partially attributed to steady and vigorous new product development for at least a decade now, even during the recession. Packaged Facts reported that though the number of new petfood SKUs in the US stayed about the same from 2009 to 2010 (1% growth), the number of new product reports jumped 9% in 2010 -- a healthy rebound from 2009, when both SKUs and reports declined.
So, I'm all for new ways to innovate, but is Nielsen really offering anything new? Do you think the measly 10% success rate for new product launches applies to petfood? Do petfood marketers really need this sort of expertise to help with innovation?
Please share your thoughts and experiences in the comments section below!