Learning from our failures

We often hear the quote that ninety per cent of new product launches fail, but how often do we stop to think about what this really means?

If you are in the ten per cent of successful launches you are hitting or exceeding targets and well on the road to success. Congratulations. Sit back and enjoy the glory, you have earned it.

The other ninety per cent of the time you will be scratching your head and asking, “What did we miss?”  You will probably be asked to answer that question at the next regular management meeting too.

A new product launch failure can be horrendously expensive. There are R&D, creative, production and media costs and potentially the cost of writing off any outdated stock. Not to mention the opportunity cost of what else you might have been working on and the potential impact on corporate reputation.

In his recent book, ‘Adapt’, Tim Harford argues that there are clear lessons to be learned from evolution. To achieve success two critical factors must exist. The first of these is variation – i.e. that different solutions should be tried. According to Mintel there have been over six thousand FMCG new product launches in the UK in last eighteen months. So, there is plenty of variation. 

The second factor is selection – i.e. that you have a mechanism in place which allows you to sort the winners from the losers. Consumers and retailers are very good at this, which unfortunately often leaves the brand owner playing catch up.

“Getting early feedback on the drivers of success of the launch is critical, but often we just don’t have the full story from the data”.

In our experience new product launch failures often occur due to a critical failure in one area of the mix, which is then amplified into other areas. For example, communications based on a poorly articulated concept, which fail to deliver the key benefit to consumers. Or a product which fails to deliver to the expectations set by the concept, or a price-value relationship that does not work for consumers. These overlaps can mean that it is difficult to identify the key post launch issues.

For the marketing or research manager trying to diagnose a launch success there is a well stocked armoury of tools - ex-factory shipment data, household panel data, retail audit data, brand and advertising tracking, pre-launch market research, feedback from trade or customer facing staff, and so on.

Unfortunately these tools sometimes fail to give the clear feedback you need early enough during the launch and at other times they may only give you part of the puzzle.

It takes considerable time, skill and effort to knit those sources together quickly enough for you to get the full picture and explain why. Clients often lack the time and resources to be able to do this. Market research agencies often lack the breadth of expertise. So it requires a collaborative approach.

At Ipsos Marketing we have a great team of people and a great approach that allows the business to benefit for the future and even rescue the launch under investigation. With those learnings captured, you might even get back into that successful ten per cent.

Doug Findlay is a Research Director at Ipsos Marketing and wrote this blog for Brand Republic.