5 Steps to Winning with Product Innovation

Product Innovation

Guest Blog: Tanya Pyshnov

Winning Product Innovation

Successful “product” innovation is a continuous challenge to product managers. Only 60% of new Consumer Packaged Goods launches are successful in market. Only 90% of new digital products and services are successful and their lifespan can be as short as 6 months. Two key reasons contribute to such low rates of success – a strong competitive environment and a lack of clear understanding of the target audience.

The competitive environment in almost every category is here to stay. Yet, getting better consumer understanding is in every product manager’s control. It is just a matter of asking the right questions, in the right way, at the right time of the innovation process. To help, I share 5 steps for successful product innovation which can significantly increase the success rate of your new introductions.

1 – Find Unmet Consumer Needs
Only 60 Percent of CPG Product Launches are Successful

Although this might sound trivial, very few new products and services truly meet an unmet consumer need. Often innovation is driven by “it can be done” versus “this is what consumers need and want and there is no such product on the market” attitude. Often companies introduce new technology because they can do it. New product patents are developed, new software are created, but these new offerings are not always developed with the purpose of meeting a previously unmet consumer need.

So the first step is to identify an unmet consumer need. This information can come from various sources, such as online data, knowledge of the category, qualitative marketing research, and social media. An unmet consumer need can be a large gap or a small adjustment/ improvement in an existing product or service. But there definitely must be a need. Sometimes it is a matter of repositioning an existing product or service to make the consumer see it in a different light to become interested in it.

Once a real need is identified, the product manager can be laser-focused on how to meet this need. This knowledge will also help in designing communication about the new offering.

2 – Identify Right Target for your Offering

Often a new product / service fails or does not reach its full potential in market because it is not targeted to the right audience. In order for the new offering to be successful, its target consumer needs to find out about it. Ideally it should happen at the right place, at the right time and communicated in a resonating way for this consumer. The offering may be great, but if your target audience is not going to hear about it, it is not going to sell.

How do you identify your target audience, a persona, for your offering? Marketing research usually is the tool to answer this question reliably. Again, the information can come from various sources, like available online data, social media, information shared at conferences, but most effectively, proprietary research directed to answer your particular business question. This research can be qualitative in nature such as focus groups and online discussions, or a quantitative survey, or ideally both. An additional benefit of identifying the target audience is that now the “size of prize” can also be estimated, even roughly, because the size of the target will be estimated. This will bring realism into profit estimates for the new offering.

Market Value - Product Concept3 – Develop a Resonating Concept 

How are you going to describe your new product/service in the in-market communication to attract your target consumers? The consumer reaction and the first purchase are motivated by the advertising or the product / service description. This description is often called a concept. Consequent advertising or communication about the new product should be based on this concept.

There is a structured approach to writing a strong concept; it is not just a description. This approach was developed and proven to work well for new Consumer Packaged Goods and was adopted by other industries.

The concept consists three parts; an Accepted Consumer Belief (ACB) or an insight, the benefit and the Reason to Believe (RTB).  An ACB is a consumer truth, an insight, something your target consumer feels strongly about. An ACB is often based on the unmet consumers’ need articulated in their own words. The benefit, as the name implies, is the benefit your new product/service will provide to this consumer. An RTB is the support for the benefit; why the consumer should believe the benefit you are promising.  This can be rational or emotional information that comes from the product creator.  When constructed in such a manner, the result is a resonating, relevant and motivating concept which will entice trial.

Another important use for a concept is when a Brand needs revitalization. When a Brand needs repositioning as a result of a competitive threat or just to revive the image of the brand and strengthen its brand equity in consumers’ minds, a new concept for a brand is developed.

4 – Validate the Value Proposition

Now that you know who the right target market for your brand is and how to position it well via a concept, it is important to confirm that the value of the new proposition is right. As an example, is the price you will demand for the benefits the consumer will be getting, justified? A good approach to this is to a run a quantitative consumer test among the right target. Various techniques exist to do this depending on the situation. A DIY (Do It Yourself) approach can also be used when an experienced marketing researcher designs the test and interprets the results. Involving an experienced marketing researcher ensures that the research will be done correctly and the results will be reliable and actionable.

5 – Preseed your Launch.

Communicating about your new product/service before the launch is a very effective way to build audience excitement and anticipation.  Since you know your target audience, you know where you can reach them most effectively.  And you have a message that works (concept).  Preseeding the launch has proven to be very effective for any product/service, no matter how big or small it is.

These five steps are not the only steps that need to happen to ensure a successful new product/service launch.  Yet, this methodical but not complex approach can dramatically increase your overall success.

 

About the author:

Tanya PyshnovTanya Pyshnov is the Principal of Clearly Research, an independent Marketing Research consultancy (www.clearlyresearch.ca).  She has 25 years of experience in the CPG industry in new product development and marketing research.  She is also the lead Marketing Research Certificate developer and instructor at UofT SCS. She can be reached at t.pyshnov@clearlyresearch.ca

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