Sitting in the Director's Chair for New Product Launches

In 2002, Warner Brothers released the movie The Adventures of Pluto Nash. After spending an estimated $100 million in production and another $20 million in marketing, the movie grossed only $7 million worldwide. Despite movie star Eddie Murphy's feature role and an adventure theme that was expected to reach a broad target audience, the movie played in theaters for just a few short weeks and was a box office bomb.

Similar to new movie releases, new consumer product introductions require heavy investment. The average cost to launch a new product in the U.S. is $20 million to $50 million, according to New Product News. And, just as the movie industry depends on box office sales information to determine if a new film is a success or a bomb, product managers typically rely on syndicated store sales data, store shipment data, and household panel information to monitor sales and evaluate how well a new product is performing.

Fortunately, unlike in the movie industry, the fate of a new consumer product does not depend entirely on consumer reception during the first few weeks of its introduction. Product managers have some lead-time - usually six to twelve months - to remedy unexpectedly soft market performance. Of course, if a new product performs even better than expected, product managers can use their six to twelve month window to determine the factors driving the product's success and leverage them further.

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