Last time we touched on New Products and the Product Development Process. We also addressed a couple of reasons new products fail. This article will present a few other viewpoints and obstacles to keep in mind.
A Quick Review:
Most of my experience with this topic comes from my work at Keson, from personal experience, and from the University of Chicago management seminar series. It is best for a company to establish a process for product development. This is important because, with a process, you can repeat what you have done in the past, and you have a standard from which you can make modifications and improvements. The goal of the process is to increase a product’s likelihood of success. Success is best defined by the company as part of the process (or prior to it) so that along the development journey, we can check in to see if we are still heading toward the goals we’ve defined. If we deviate too far from the goals we’ve defined, we need the discipline to correct, change or stop.
There is a cost to product development, and if a product does not have the potential to recoup this cost from its profits, it is not likely the best use of resources (time and money). Products often “fail” for a number of reasons.
The market is too small.
If there are not enough people willing to pay for the item you have for sale, or if the group of people who would benefit from it is too small, the product will fail. The example was a demo tool for our sales force to demo the Focus Vial.
The product is a poor match for the company.
If the product does not align with company objectives, it is not likely to get the attention or generate the interest needed to produce significant successful results. Ask yourself if your product checks the boxes in your CORE: What are you passionate about? What drives your economic engine? What can you be the best in the world at? The example was Keson getting into the utility knife market.
Deciding On What To Pursue.
Not all new products have to change the world – most won’t. Oftentimes it is perfectly reasonable and profitable to bring a product to market that is a response to what is already in the market or to something that a competitor offers. These are typically called “Me Too!” products. The vast majority of products in any given category are these types of products.
For example, Keson has 70+ options for short tape measures (tape measures under 40 feet). We do not have 70+ options because we think this is exactly the number the market needs. We have so many because at various times we needed to respond to the offerings that our competitors have brought to the market.
How is it possible to have so many options? It is very logical to keep adding to offer all the options (Price Points x Length x Unit of Measure x Housing/Brake/Blade Style), but doing so raises some business questions: Will they all sell? Can we keep them all in stock? Can we logically sell them against each other and our competition?
|4 price points x||9 lengths = 36 options||x 10 units of measure = 360||x 5 styles = 1,800 options|
|Price: e.g., 4||Length: e.g., 9||Units of Measure: e.g., 10||Style: e.g., 5|
|Opening Price Point|
Medium Price Point
High Price Point
(Premium Price Point)
|6, 10, 12, 16, 25, 30, 33, 35, 40 feet||3 very common scales (feet and inches, feet and 10ths and metric); tape blades that have more than one scale on them (for example ft. & in. AND metric on the same blade); specialty options e.g., Brick Layers scale||Rubber grip, No grip, Wide blade, Ultra-Bright blade, Auto-locking, etc.|
For each style, we also have to create catalog information, photography, competitive cross-over data, and other resources, like sell-sheets and videos. This is a cost we consider when bringing any product to market.
Additionally, the market is changing constantly. We will never match up exactly with all our competitors. It would be costly and likely unsuccessful for us to try. Trying to be “all things to all customers” can be a quagmire that is easy to step into and difficult to navigate through. Better to have a plan and the discipline to follow it.
Not Really New, Not Really Different
What is the product user doing today? Is what we are bringing to market really new and different from what they are already doing?
For example, when we brought our Ultra-Bright tape measures to the market, we did NOT expect every user of tape measures to abandon the products and the brands that they have been using. So, we tempered our expectations, our forecasts, and our offering to lean into the lengths, units of measure and tape style we thought would be most successful. We did not bring in dozens of models, but rather eight to start. We still have six.
After all, these tapes measure the same distances as their Non-Ultra-Bright cousins. They last about the same amount of time. They are great tapes, but they are “not really new or really different” from the tapes that are in the market from us and from our competition.
No Real Benefit To Customer Or Consumer
Is the new product better in a way that is demonstrable, obvious, provable, measurable and significant? Or, is it just different?
This is an area where there are many surprises in my experience. I might consider the Ultra-Bright tape a “nice to have” offering, but I run into people who LOVE them. They will “never buy another style of tape” again. When I ask why, the specific answers vary, but in general it’s because they are easier to see. So, for some there is an absolute benefit that I might never have seen. For others it is so obvious they are continually asking, “how can you not see how good this is?!” I wholly admit the Ultra-Bright blade is easier to see, but I never would have guessed that this level of passion.
I hope that these two articles have shed a little light on what to consider when selecting which products to pursue. It is not a simple process. The implications for a business can be profound. There is a struggle between keeping a focus on what is essential (important and time sensitive) and charting a path to the future.
We have found it best to have a process and systems to bring products to market. We have had to impose some discipline to keep ourselves “in our lane” and we have set standards so that we can meet the levels of success we define. We run through some simple checklists to address common reasons why products fail. We also need to have the humility to realize that even when we run our system and check our lists, there is no guarantee that we will succeed. Luck, too, plays a part.