New product development

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In business and engineering, new product development (NPD) is the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible (that is, something physical you can touch) or intangible (like a service, experience, or belief). There are two parallel paths involved in the NPD process: one involves the idea generation, product design and detail engineering; the other involves market research and marketing analysis. Companies typically see new product development as the first stage in generating and commercializing new product within the overall strategic process of product life cycle management used to maintain or grow their market share.

The eight stages[edit]

1. Idea Generation is often called the "NPD" of the NPD process.[1]

Ideas for new products can be obtained from basic research using a SWOT analysis (Strengths, Weaknesses, Opportunities & Threats). Market and consumer trends, company's R&D department, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight into new product lines or product features.

Lots of ideas are generated about the new product. Out of these ideas many are implemented. The ideas are generated in many forms. Many reasons are responsible for generation of an idea.

Idea Generation or Brainstorming of new product, service, or store concepts - idea generation techniques can begin when you have done your OPPORTUNITY ANALYSIS to support your ideas in the Idea Screening Phase (shown in the next development step).

2. Idea Screening

The object is to eliminate unsound concepts prior to devoting resources to them. The screeners should ask several questions:

Will the customer in the target market benefit from the product? What is the size and growth forecasts of the market segment / target market? What is the current or expected competitive pressure for the product idea? What are the industry sales and market trends the product idea is based on?

Is it technically feasible to manufacture the product? Will the product be profitable when manufactured and delivered to the customer at the target price?

3. Concept Development and Testing

Develop the marketing and engineering details

Investigate intellectual property issues and search patent databases Who is the target market and who is the decision maker in the purchasing process? What product features must the product incorporate? What benefits will the product provide? How will consumers react to the product? How will the product be produced most cost effectively? Prove feasibility through virtual computer aided rendering and rapid prototyping What will it cost to produce it?

Testing the Concept by asking a number of prospective customers what they think of the idea usually[citation needed] via Choice Modelling.

4. Business Analysis

Estimate likely selling price based upon competition and customer feedback Estimate sales volume based upon size of market and such tools as the Fourt-Woodlock equation Estimate profitability and break-even point

5. Beta Testing and Market Testing

Produce a physical prototype or mock-up Test the product (and its packaging) in typical usage situations Conduct focus group customer interviews or introduce at trade show Make adjustments where necessary Produce an initial run of the product and sell it in a test market area to determine customer acceptance

6. Technical Implementation

New program initiation Finalize Quality management system Resource estimation Requirement publication Publish technical communications such as data sheets Engineering operations planning Department scheduling

Supplier collaboration Logistics plan Resource plan publication Program review and monitoring Contingencies - what-if planning

7. Commercialization (often considered post-NPD)

Launch the product Produce and place advertisements and other promotions Fill the distribution pipeline with product Critical path analysis is most useful at this stage

8. New Product Pricing

Impact of new product on the entire product portfolio Value Analysis (internal & external) Competition and alternative competitive technologies Differing value segments (price, value and need) Product Costs (fixed & variable) Forecast of unit volumes, revenue, and profit

These steps may be iterated as needed. Some steps may be eliminated. To reduce the time that the NPD process takes, many companies are completing several steps at the same time (referred to as concurrent engineering or time to market). Most industry leaders see new product development as a proactive process where resources are allocated to identify market changes and seize upon new product opportunities before they occur (in contrast to a reactive strategy in which nothing is done until problems occur or the competitor introduces an innovation). Many industry leaders see new product development as an ongoing process (referred to as continuous development) in which the entire organization is always looking for opportunities. For the more innovative products indicated on the diagram above, great amounts of uncertainty and change may exist which makes it difficult or impossible to plan the complete project before starting it. In this case, a more flexible approach may be advisable. Because the NPD process typically requires both engineering and marketing expertise, cross-functional teams are a common way of organizing projects. The team is responsible for all aspects of the project, from initial idea generation to final commercialization, and they usually report to senior management (often to a vice president or Program Manager). In those industries where products are technically complex, development research is typically expensive and product life cycles are relatively short, strategic alliances among several organizations helps to spread the costs, provide access to a wider skill set and speeds up the overall process.

Also, notice that because both engineering and marketing expertise are usually critical to the process, choosing an appropriate blend of the two is important. Observe (for example, by looking at the See alsoor References sections below) that this article is slanted more toward the marketing side. For more of an engineering slant, see the Ulrich and Eppinger, Ullman references below.[2][3] People respond to new products in different ways. The adoption of a new technology can be analyzed using a variety of diffusion theories such as the Diffusion of Innovations theory.[citation needed] A new product pricing process is important to reduce risk and increase confidence in the pricing and marketing decisions to be made. Bernstein and Macias describe an integrated process that breaks down the complex task of new product pricing into manageable elements.[4] The Path to Developing Successful New Products[5] points out three key processes that can play critical role in product development: Talk to the customer; Nurture a project culture; Keep it focused.

Fuzzy Front End[edit]

The Fuzzy Front End is the messy "getting ended" period of new product engineering development processes. It is in the front end where the organization formulates a concept of the product to be developed and decides whether or not to invest resources in the further development of an idea. It is the phase between first consideration of an opportunity and when it is judged ready to enter the structured development process (Kim and Wilemon, 2007;[6] Koen et al., 2001).[1] It includes all activities from the search for new opportunities through the formation of a germ of an idea to the development of a precise concept. The Fuzzy Front End ends when an organization approves and begins formal development of the concept. Although the Fuzzy Front End may not be an expensive part of product development, it can consume 50% of development time (see Chapter 3 of the Smith and Reinertsen reference below),[7] and it is where major commitments are typically made involving time, money, and the products nature, thus settin g the course for the entire project and final end product. Consequently, this phase should be considered as an essential part of development rather than something that happens before development, and its cycle time should be included in the total development cycle time. Koen et al. (2001, pp. 4751)[1] distinguish five different front-end elements (not necessarily in a particular order): 1. Opportunity Identification 2. Opportunity Analysis 3. Idea Genesis 4. Idea Selection 5. Concept and Technology Development

The first element is the opportunity identification. In this element, large or incremental business and technological chances are identified in a more or less structured way. Using the guidelines established here, resources will eventually be allocated to new projects.... which then lead to a structured NPPD (New Product & Process Development) strategy. The second element is the opportunity analysis. It is done to translate the identified opportunities into implications for the business and technology specific context of the company. Here extensive efforts may be made to align ideas to target customer groups and do market studies and/or technical trials and research. The third element is the idea genesis, which is described as evolutionary and iterative process progressing from birth to maturation of the opportunity into a tangible idea. The process of the idea genesis can be made internally or come from outside inputs, e.g. a supplier offering a new material/technology or from a customer with an unusual request. The fourth element is the idea selection. Its purpose is to choose whether to pursue an idea by analyzing its potential business value. The fifth element is the concept and technology development. During this part of the front-end, the business case is developed based on estimates of the total available market, customer needs, investment requirements, competition analysis and project uncertainty. Some organizations consider this to be the first stage of the NPPD process (i.e., Stage 0). The Fuzzy Front End is also described in literature as "Front End of Innovation", "Phase 0", "Stage 0" or "PreProject-Activities". A universally acceptable definition for Fuzzy Front End or a dominant framework has not been developed so far.[8] In a glossary of PDMA,[9] it is mentioned that the Fuzzy Front End generally consists of three tasks: strategic planning, concept generation, and, especially, pre-technical evaluation. These activities are often chaotic, unpredictable, and unstructured. In comparison, the subsequent new product development process is typically structured, predictable, and formal. The term Fuzzy Front End was first popularized by Smith and Reinertsen (1991).[10] R.G.Cooper (1988)[11] describes the early stages of NPPD as a four step process in which ideas are generated (I), subjected to a preliminary technical and market assessment (II) and merged to coherent product concepts (III) which are finally judged for their fit with existing product strategies and portfolios (IV). In a more recent paper, Cooper and Edgett (2008)[12] affirm that vital predevelopment activities include: 1. Preliminary market assessment 2. Technical assessment 3. Source-of-supply-assessment: suppliers and partners or alliances 4. Market research: market size and segmentation analysis, VoC (voice of the customer) research

5. Product concept testing 6. Value-to-the customer assessment 7. Product definition 8. Business and financial analysis These activities yield vital information to make a Go/No-Go to Development decision. In one of the most earliest studies using the case study method, Khurana and Rosenthal[13] defined the frontend to include the interrelated activities of:

product strategy formulation and communication opportunity identification and assessment idea generation product definition project planning executive reviews

Economical analysis, benchmarking of competitive products and modeling and prototyping are also important activities during the front-end activities. The outcomes of FFE are the

mission statement customer needs details of the selected concept product definition and specifications economic analysis of the product the development schedule project staffing and the budget a business plan aligned with corporate strategy

In a paper by Husig, Kohn and Huskela (2005)[14] a conceptual model of Front-End Process was proposed which includes early Phases of Innovation Process. This model is structured in three phases and three gates:

Phase 1: Environmental screening or opportunity identification stage in which external changes will be analysed and translated into potential business opportunities.

Phase 2: Preliminary definition of an idea or concept. Phase 3: Detailed product, project or concept definition, and Business planning.

The gates are:

Opportunity screening Idea evaluation Go/No-Go for development

The final gate leads to a dedicated new product development project. Many professionals and academics consider that the general features of Fuzzy Front End (fuzziness, ambiguity, and uncertainty) make it difficult to see the FFE as a structured process,but rather as a set of interdependent activities ( e.g. Kim and Wilemon, 2002).[15] However, Husig et al., 2005 [10] argue that front-end not need to be fuzzy, but can be handled in a structured manner. In fact Carbone [16] showed that when using the front end success factors in an integrated process, product success is increased. Peter Koen[17] argues that in the FFE for incremental, platform and radical projects, three separate strategies and processes are typically involved.[17] The traditional Stage Gate (TM) process was designed for incremental product development, namely for a single product. The FFE for developing a new platform must start out with a strategic vision of where the company wants to develop products and this will lead to a family of products. Projects for breakthrough products start out with a similar strategic vision, but are associated with technologies which require new discoveries. It is worth mentioning what incremental, platform and breakthrough products are.

Incremental products are considered to be cost reductions, improvements to existing product lines, additions to existing platforms and repositioning of existing products introduced in markets.

Breakthrough products are new to the company or new to the world and offer a 5-10 times or greater improvement in performance combined with a 30-50% or greater reduction in costs.

Platform products establish a basic architecture for a next generation product or process and are substantially larger in scope and resources than incremental projects.[17]

2.

Shorter product lifecyclesIncreasing technological capabilitiesIncreasinglycompetitive

MarketsGrow brand loyaltyDiversify into growth areasIncrease MarketshareProduction and Research and Development StrategiesShorter product lifecyclesIncreasing technological capabilitiesIncreasingly competitiveMarketsGrow brand loyaltyDiversify into growth areasIncrease MarketshareProduction and Research and Development StrategiesRequirement of customers, market competion, new ideas , removal of problems with previous proucts , newtechnology advatages and failure of previous products. 3.

6 Reasons Why Products Fail

By Michael Deane on February 26, 2010 A A A

Filed Under: Advertising, Entrepreneur, M&A, Marketing

In the big book of product failures, there are a few examples that stand out as so colossal you have to wonder what the company was thinking. Still, others seem to have just been a case of bad timing, badmarketing and bad luck. Below we'll look at six reasons why products fail, and the products that prove it. 1. Timing In some cases, a luxury product that's been in planning stages for years is set to launch just as a major recession is starting. This was the case with the Ford Edsel. The Edsel has become synonymous with failure, and it is well known as a marketing catastrophe, but the 1958 recession certainly played a large part in its undoing. Sometimes a product is just "ahead of its time," and the market for it just doesn't exist, like the precursor to popular PDA devices, the Apple Newton MessagePad. This kinda-clunky PDA had a few shortcomings - most famously, its inability to live up to the claim of understanding handwriting - but more than that was its release at a time when paying $700US for a PDA seemed absurd. Today, if there was a PDA that came out and revolutionized the industry, $700 would seem like a bargain. (The time will come when you'll be the one explaining these obsolete technologies. Learn more in Technology Your Kids (Or Grandkids) Will Laugh At.) 2. Not Living Up To The Hype There's nothing worse than when the public feels like they're being tricked. This happens when something has hyped-up marketing, but the product is pretty ho-hum. It's another reason why the Edsel failed, as Ford had positioned it as a cutting-edge new automobile, but the public saw it as more of the same for a higher cost. This poor positioning cost

Ford $350 million, a huge sum in 1959. McDonald's also fell prey to this with the release of the Arch Deluxe menu in the '90s. No one was fooled when Mickey-D's claimed to have moved into the fine dining racket just by slapping a tomato on top of a burger. McDonald's reportedly spent $100 million on advertising the failed line. For another example, don't forget the Windows Vista saga. 3. Prohibitively Strong Branding A strong brand can be a blessing and a curse. Consumers trusted Colgate for toothpaste, but it didn't make sense when that name was put on the Colgate Kitchen Entrees. Connecting the taste of food and toothpaste was off-putting for the consumer. With the McDonald's Arch Deluxe fiasco, McDonald's name was too strong as a value burger joint for anyone to take the "dining for adults" line seriously.
More than 50% of retirement age individuals to not have enough savings

4. Fixing What Ain't Broken Companies that are already successful sometimes try to improve themselves but end up scaring off their already loyal consumers. This is best illustrated in what is known as one of the worst product failures in history: "New Coke." In 1985, Coca-Cola was doing fairly well, but was worried about losing more market share to Pepsi. There was a $4 million market research project stating that Coke drinkers would prefer the new taste, but when it came down to it, they still wanted the original. Crystal Pepsi is another good example. Making a clear cola did not entice non-cola drinkers - it just confused Pepsi's branding. 5. Cross Contamination - Mixing Two Successful Products Into One Big Failure It seems counterintuitive that combining two successful products or companies can somehow bring about disaster, but it happens. Just think of the combo of peanut butter and jam in one bottle or Kellogg's disastrous milk-with-cereal packaging campaign Cereal Mates.

Another example is the recently failed merger: AOL Time Warner. Though the AOL Time Warner debacle had a lot to do with management, timing and meshing of company culture, it goes to show that taking two successful things and combining them can lead to unmitigated disaster. 6. Not Making The Right Business Partners Sony's Betamax and Toshiba's HD DVD are perfect examples of this. Betamax was widely regarded as being superior to VHS, but its higher cost meant it wasn't picked up by the big distributors, which led to its downfall. HD DVD was like the VHS of the DVD battle, because it cost less than BluRay and held less information, except that HD DVD lost. Certain studios (Fox, Sony, Walt Disney), Sony's Playstation 3 and retailers like Wal-Mart and Best Buy all sided with Blu-Ray, leaving Toshiba's HD DVD at a disadvantage because it had less available titles and sales outlets. Like Betamax, this caused a chain reaction where fewer films were released for the less-available format, and Toshiba eventually stopped producing HD DVD players in mid-2008. Toshiba's loss from HD DVD is thought to be near $1 billion. (As technology advances, some industries become obsolete. Follow the trends that will affect jobs, investments and your purchases in 4 IndustryChanging Tech Trends.) The Bottom Line Sometimes there's no accounting for the failure of a product. Even if the product is better than competitors, has strong market research and a huge advertising campaign, it can still fail. A look at the above reasons shows that failure has many faces and is often unpredictable.

Why Do Products Fail?

By Scott Sehlhorst | February 8th, 2012

Why do products fail? Trying to organize all of the reasons that your product might fail is a Herculean effort. Understanding how your product did, will, or might fail will help you focus on what you need to do next.

An Exploration of Product Management

A personal goal for me is to become better at product management, so that I can help create better products. As a product manager, the most important thing you should be doing is understanding the problems that your customers face. If you treat improving at product management as the product, you should start with an exploration of the problem space. Im framing that problem space as products that fail. I think it is also fair to also think about products that under-perform. They succeed given the goals by which they are being measured, but they never realize their full potential. Ill keep the not as good as it could be notion in the back of my head, and talk to failed as the larger issue. There are conversations, blogs, books, processes, and frameworks for how to be a (good) product manager. I suspect looking at this from the outside-in (problem first, solution second) may yield some interesting insights. Thanks to Leisa Reichelt for her article onwhy most UX is bad, which inspired me to have the conversation here, approaching the problem as a root cause analysis. As an agile product manager, Im going to approach this iteratively. I hope that you will provide insights and corrections, helping to adapt this as we go. Your contributions will make this better, faster.

Root Cause Analysis of Failed Products

Ishikawa diagrams were originally created to allow engineers to figure out why something broke a visual tool for organizing root cause analyses. Ive been using this powerful decomposition tool for several years to solve problems and organize my thoughts. It may provide the perfect framework for gaining understanding about why products fail. Lets dive right in. Heres my first crack at the very top level of an Ishikawa for product failure.

[larger version] Looks pretty sparse (for now). I will fill it in, as I drill down into each area. If youre like me, youve got some reasons for failure in your head right now maybe from past experience, maybe from watching products in the market today. Do any of those reasons not map into the categories above? Tell us about it in the comments (or tell me privately, if you must) thats the first vector for informing an improved version of this diagram. Here are some prose descriptions of what Im thinking about (for now) for each of those branches on the diagram I expect them to fill out with smaller branches attached to each of the main branches. Product Fails in the Market Business Case is Flawed This is where we would capture things like a product strategy that is not profitable, for example, your model was dependent on exponential growth so even though you had consistently growing market share, it wasnt enough for the product to be considered a success by you. Picked the Wrong Market Maybe this market is about to go away, like buggy whips or audio cassettes. Maybe the competitors in this market are just too good. Maybe entering this market is too divergent from your corporate strategy and dilutes focus and investment in your companys other products. Another example would be if your team does not have the skills and resources needed to win in a particular market. Takes Too Long to Enter Market Whatever it is youre doing to enter the market, it took you too long. Competitors have out-gunned you, your customers needs have changed, etc. This is to capture causes where even if everything else was good, you simply didnt move quickly enough. At first blush, I expect organizational problems (lack of alignment, bureaucracy, insufficient resources) will all land here. Doesnt Solve the Right Problems This is where most product managers focus most of their time making sure were actually solving the right problems (the ones customers are willing to pay to solve). Problems of design where we intended to solve the right problem, but the proposed solution doesnt cut it would not be in this branch they would be in the not good enough branch. Positioning & Sales Approach is Wrong For the first iteration, this is my catch-all for marketing and sales. All of the problems that are your potential customers dont think of your product as a solution to their problems (even though it is). Also the problems of your potential customers decided not to purchase (when they should have) and your potential customers have never heard of your product. This is definitely an area where you can contribute more than I can to the framework. How would you (product marketing managers, Im looking at you) frame this? Product is Not Good Enough Execution is key here. Not solving problems completely (although that might move to the right problems branch) is an example. Bad design is an example both bad user-experience and bad architecture. Poor execution also lands here broken windows,

sloppy implementations, poor quality. For this branch to work, product is not just the product that your development team builds, but also your customer relationships, distribution, services, etc.

Open Questions in This Model

There are definitely some design decisions I made in the approach above that are worth questioning. Here are some that come to mind for me add your own in the comments. Designs that fail to solve the target problems I put this in the the not good enough bucket, because I felt like there was value in grouping the how separate from the why. Many times, an inadequate design is a design that works great for inadequate requirements which means the problem is in the why column. How would you organize bad requirements execution and bad design execution in this model? Pricing and Cost together, they reflect profitability. Not profitable implies a business case problem. Incorrect pricing implies a positioning problem or is a red herring that is masking a sales problem. High cost is reflective of bad design decisions and/or execution problems (both of which are in the not good enough) bucket. Perhaps if you cant create the product at the cost you need to, for your business model to work, when selling at a given price in order to compete, you have picked the wrong market. Where would you put pricing and cost issues? Team Capabilities and Support. Not having (enough of) the right skills on a team limits what solutions you can create. Not having enough support to gain needed skills constrains the solution space as well. When your team does not have what it takes, or have what they need, to create solutions that will succeed in a given market, where would you put this? For now, it is in the picked the wrong market bucket, because trying to compete in that market is infeasible. Theres probably a better way to frame this how would you do it?

A Litmus Test
One experiment to validate this model is to look at the main causes of project failure and see if they map well into this space. In the Chaos Report findings from the Standish Group, the following are the top ten responses from the companies they surveyed, along with my thoughts about how they map into this framework. 1. Lack of User Input In my experience, this manifests both as not solving the right problems and as delivering a product that is not good enough. The mechanisms are different flavors of not listening. 2. Incomplete Requirements & Specifications Ends up causing delays, and possibly not solving the right problems, or having designs that are not good enough (because the requirements that drove the designs were not good enough). 3. Changing Requirements & Specifications I put this squarely in the your mindset is broken bucket. Requirements change, even if your requirements document does not. Depending on how this plays out (for your team, for your process), you either slog on and deliver solutions to the wrong problems, or you take too long to deliver. 4. Lack of Executive Support This can be a takes too long problem. Or it could be that lack of support causes a product to be abandoned (even if it were succeeding), or constrains options for your team to the point that you arent able to succeed within the parameters. This one definitely doesnt fit the model. Should we update the model, or treat this one as out of scope? 5. Technology Incompetence insufficient skill results in not good enough and usually delivery takes too long. If really bad, it results in impossible (for this team) to deliver. For the really bad cases, does it land in picked the wrong market, because that market is infeasible? 6. Lack of Resources Just a subset of lack of executive support. 7. Unrealistic Expectations in the worst cases, it is a problem with the business model. 8. Unclear Objectives lands in not solving the right problem. 9. Unrealistic Time Frames same as unrealistic expectations. 10. New Technology yes, change is hard.

Not surprisingly, the list from the Chaos report uses a project-centric language. Other than the (very valid) failure profile that lack of executive support causes projects to fail, the model seems to hold up reasonably well. Your turn what would you add or change?

3. 7 Reasons Why A Great Product Launch Can Fail and How To Avoid

It
by Juliann Grant, Global Strategy and Analyst Relations, Telesian Technology Inc. Its reported that 70% of all new product launches fail in the first year. The question is, why do some succeed when others fail? Having seen both sides of the product launch picture, here are a few pitfalls to watch out for: 1. The market does not need your offering. Some product launches are steeped in a philosophy called If I build it, they will come. Many startups find themselves building a market solution that is based on one or two customer experiences. The reality iswithout the proper market research, even the best launch plans can fail. To avoid this mistake, adequate research needs to be completed to ensure that your go-to-market plan is based on facts and substance. Its imperative that you validate there is a market out there. Does the market have a business need? Who are your best customers? Are there enough to sustain growth? How does this solution tie into the bigger growth picture for a business? The good news is, if you do not have all the answers, you still have time to get them. It could save your launch millions. 2. Sales training/enablement was ineffective. A key element in a product launch is training and enabling the channel to sell the new product or service. Sales training/enablement means that your company has carefully considered what information will be communicated: (1) to the sales channel so they can effectively sell the new product or service, and (2) to your prospects and customers so they can make an intelligent buying decision. This requires taking a look at the sales cycle and making judgments about what the field will need to know and what they will be able to deliver to a prospect or customer. 3. Message/value proposition did not create urgency. We recently published a series of articles that discussed the success or failure of marketing programs. In this series, we looked at how messages either create an urgency to act toward something whether it is to learn more, request an offer or do the oppositenothing. When looking at messages in the context of a product launch, the same guidelines apply. Your messages must help a prospect or customer understand the following:

What makes your product or service different in the market? Have you highlighted those facts/features in your launch? How does this compare with the competition in terms of pricing, messages, and models? Is your solution/service aligned to help solve a business problem in your market? If not, then your solution becomes a nice to have vs. a must have now. Are messages aligned to who actually purchases this product/service? Look at the functional titles who are you selling to and are you speaking a language they understand?

4. Launch did not plant enough seeds. I often compare the role of marketing to that of planting a garden. The fruits that you enjoy after youve done the work come in the form of new sales. However, we all know that fruit just does not simply appear out of nowhere. It takes months to develop, and only after planting good seeds and frequent watering. Marketing a new product or service requires much the same model. If you are entering a new market with something spectacular and the market doesnt know you or your solution, then you have some serious planting (telling the world what it is you are doing) and watering (creating urgency) ahead. If you are already established in a market and are coming out with something new and exciting, then you may not need as many seeds, but be prepared to plant and water anyway. Setting the stage in your market requires mapping out what a prospect or customer will need to know and understand when making a purchasing decision for your type of product or service. Do not assume that your market will draw the same conclusion you are ticipating. Your launch strategy and execution must reflect a clear understanding and path that helps a prospect or customer make intelligent decisions, create an urgency that they really need what you are selling, and provide guidance on what they should be doing/thinking about next. 5. No BETA customers or references were available. This obstacle tends to surface well into the launch plan. What happens here is this All launch plans are a GO You have seeded the market and they responded in kind. The channel knows what they are selling and are doing a good job of it. Sales cycles are in process. And then BOOMsomeone wants to talk to a reference. Now what? Are you prepared for handling this sales obstacle? Many product launches have overcome this obstacle. Your references dont need to be perfect, but you need a plan to address this stage. The good news is that if youve gotten this far, your launch is probably working. Now, you need to button up this latter stage so you can turn these opportunities into sales. References fall under two categories: (1) the ideal reference who served as a BETA customer during product development and can speak to your vision, the product, and working with your organization, and (2) the not-so-ideal reference who is using a different (or older version) product/service by your company. Both have fantastic validation points and will serve you well. Just know what each reference is offering and explain to the channel how to get the most out of the references you have lined up. Do not leave this to chance or assume the channel knows how to use the reference.

Also beware of reference burnout. Try to spread the wealth and have different references lined up to address specific issues. If, in the end, you do not have a reference prepared, then you may want to offer one of the first, really interested prospects a sweet deal to help you with the rest of the launch. 6. The company did not fully commit to the product. This issue will also come up during the sales cycle because your sales message is not tight. If your company is throwing development dollars at fixing a hole in an older product line, and has not shared a larger vision of where this product is going in the future, you will run into issues. Your channels credibility is on the line, as well as your company as a whole. Make sure you have taken the time to prepare answers to the questions that will come up:

What is the long term plan for this product line? How does it fit in with your other products/services? What is the planned upgrade/release schedule? How frequent? Where was this product developed (be prepared to address off-shore issues and concerns)?

7. The sale of this product/service eroded other revenue generation opportunities. This is an issue that I have seen come up more than once as this side of the launch is often not thought through sufficiently. The issue focuses on the cost of the launch to the usiness and deserves your attention. It is not as much an issue for new sales as it is for your existing customer base that has already made investments with your company. The questions you must answer to avoid surprises include:

How does the sale of this new product impact our other product lines? Do we have a clear upgrade/migration path for current customers? What is their benefit to upgrading systems or migrating to a new platform? What is the cost of conversion for each of these deals to our business? (long term and short term)

If you have successfully uncovered each of these issues, then you have dramatically increased your chances of a successful launch. Being part of a successful launch is one of he most exhilarating and rewarding experiences as a marketer. Always remember to take the time to reflect on how your product launch is performing so you can learn as you go. I recently heard a great phrase, An error only becomes a mistake when you do it more than once. So, heres to your success!

Product and brand failures: a marketing perspective

written by Tim Berry of Palo Alto Software http://www.paloalto.com
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Overview Product and brand failures occur on an ongoing basis to varying degrees within most product-based organizations. This is the negative aspect of the development

and marketing process. In most cases, this failure rate syndrome ends up being a numbers game. There must be some ratio of successful products to each one that ends up being a failure. When this does not happen, the organization is likely to fail, or at least experience financial difficulties that prohibit it from meeting profitability objectives. The primary goal is to learn from product and brand failures so that future product development, design, strategy and implementation will be more successful. Studying product failures allows those in the planning and implementation process to learn from the mistakes of other product and brand failures. Each product failure can be investigated from the perspective of what, if anything, might have been done differently to produce and market a successful product rather than one that failed. The ability to identify key signs in the product development process can be critical. If the product should make it this far, assessing risk before the product is marketed can save an organizations budget, and avoid the intangible costs of exposing their failure to the market. Defining product and brand failures A product is a failure when its presence in the market leads to: The withdrawal of the product from the market for any reason; The inability of a product to realize the required market share to sustain its presence in the market; The inability of a product to achieve the anticipated life cycle as defined by the organization due to any reason; or, The ultimate failure of a product to achieve profitability. Failures are not necessarily the result of substandard engineering, design or marketing. Based on critics definitions, there are hundreds of bad movies that have reached cult status and financial success while many good movies have been box office bombs. Other premier products fail because of competitive actions. Sonys Beta format was a clearly superior product to VHS, but their decision to not enable the format to be standardized negatively impacted distribution and availability, which resulted in a product failure. The Tucker was a superior vehicle compared to what was on the market at the time. This failure was due to General Motors burying the fledgling organization in the courts to eliminate a

future competitor with a well-designed product posing a potential threat to their market share. Apple has experienced a series of product failures, with consistent repetition as they continue to fight for market share. Product failures are not necessarily financial failures, although bankruptcy may be the final result. Many financially successful products were later found to pose health and safety risks. These products were financial and market share successes:

Asbestos-based building materials now recognized as a carcinogenic Insulation, floor tile and popcorn ceiling materials produced by a number of manufacturers. Baby formula that provided insufficient nutrients for infants resulting in retardationNestles. The diet medication cocktail of Pondimin and Redux called Fen Phen that resulted in heart value complicationsAmerican Home Products (http://www.settlementdietdrugs.com/).

What successful products may be next? Frequent and high dosages of Advil are suspected to correlate with liver damage. Extended use of electric blankets are suspected by some to increase the chance of cancer. The over-the-counter availability and high use of Sudafed is feared by some physicians and is currently under review by the U.S. Food and Drug Administration. Product failures and the product life cycle Most products experience some form of the product life cycle where they create that familiaror a variantform of the product life cycle based on time and sales volume or revenue. Most products experience the recognized life cycle stages including: 1. Introduction 2. Growth 3. Maturity (or saturation) 4. Decline In some cases, product categories seem to be continuously in demand, while other products never find their niche. These products lack the recognized product life cycle curve.

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Failure, fad, fashion or style? It is important to distinguish a product failure from a product fad, style or a fashion cycle. The most radical product life cycle is that of a fad. Fads have a naturally short life cycle and in fact, are often predicted to experience rapid gain and rapid loss over a short period of timea few years, months, or even weeks with online fads. One music critic expected The Bay City Rollers to rival the Beatles. Do you know who they are? And the pet rock lasted longer than it should have, making millions for its founders. A fashion is what describes the accepted emulation of trends in several areas, such as clothing and home furnishings. The product life cycle of a style also appears in clothing as well as art, architecture, cars and other esthetic-based products. The end of these product life cycles does not denote failures, but marks the conclusion of an expected cycle that will be replaced and repeated by variations of other products that meet the same needs and perform the same functions. The benefits of studying failures Gaining a better understanding of product failures is important to help prevent future failures. Studying the history of product failures may generate some insight into the reason for those failures and create a list of factors that may increase the opportunity for success, but there are no guarantees. Examples of product failures The following is an abbreviated list of product failures that may provide insight that will help to identify product and brand success factors: Automotive and transportation Cadillac Cimarron Pontiac Fiero Chevrolet Corvair Ford Edsel The DeLorean

Crosley The Tucker The Gremlin, the Javelin and a complete line of other models by American Motors GMs passenger diesel engine Mazdas Wankel rotary engine Firestone 500 tire Goodyear tires used on the Ford Explorer Concordesupersonic airliner Computer industry IBMs PCjrintroduced in March 1985 Apples Newton Apples Lisa Colecos Adam Percons Pocketreaderhand held scanner, now operating under the company name PSC Bumble Bees software version of the book What Color is Your Parachute Entertainment Quadraphonic audio equipment World Football League Womens National Basketball Association World League of American Football United States Football League He and She, Berrengers, every spinoff done by the former cast of Seinfeld, and dozens of other television shows each year. Of Gods and Generals, Heavens Gate, Water World, The Postman and other movieswith a disproportionately high number produced by Kevin Costner. Food and beverage Burger Kings veal parmesan Burger Kings pita salad McRiband still being tested and tried Nestles New Cookerybut a successor, Lean Cuisine, is a big hit Gerbers Singlesdinners in jars, for adultsearly 70s

Chelseababy beer Photographic and video Polaroid instant home movies SX-70 (Polaroid instant camera) RCA Computers (Spectra-70) Video-disc players DIVX variant on DVD U.S. currency Susan B. Anthony Dollar coinniche in San Francisco, Las Vegas Two-dollar bill Twenty-cent piece Other products DuPonts CORFAM synthetic leather Mattels Aquarius Timexs Sinclair Clairols Touch of Yogurt Shampoo (1979) Sparq portable mass storage Rely tampons Relax-a-cizorvibrating chair Louisiana World Expositionand its gondola Common reasons for product failures In addition to a faulty concept or product design, some of the most common reasons for product failures typically fall into one or more of these categories: High level executive push of an idea that does not fit the targeted market. Overestimated market size. Incorrectly positioned product. Ineffective promotion, including packaging message, which may have used misleading or confusing marketing message about the product, its features, or its use. Not understanding the target market segment and the branding process that would provide the most value for that segment. Incorrectly pricedtoo high and too low. Excessive research and/or product development costs.

Underestimating or not correctly understanding competitive activity or retaliatory response. Poor timing of distribution. Misleading market research that did not accurately reflect the actual consumers behavior for the targeted segment. Conducted marketing research and ignored those findings. Key channel partners were not involved, informed, or both. Lower than anticipated margins.

Using these potential causes of a product or brand failure may help to avoid committing those same errors. Learning from these lessons can be beneficial to avoid some of these pitfalls and increase the chance for success when you launch that next product or brand.