Launching a new product is tough and can be a very expensive process. There are a number of different costs to consider, from product and packaging development costs to investment in new lines and capacity, commercial and marketing costs, which is why it’s so crucial to maximise your product’s chances of success.
Research has shown that three quarters of new product launches fail after only one year due to low sales. In this article, we’re going to look at three common mistakes companies make when developing and launching new food and drink products.
Several factors can affect the success of a new product (speed to market, packaging, pricing, promotion, claims, etc.). When it comes to the food industry, research has shown that taste is the main driver of product success or failure. Despite this, companies often spend most of their time thinking about concept, packaging, marketing campaigns and promotions, with less emphasis on product development and taste.
Current trends towards healthy and “free from” products, put a lot of focus on the development of products supporting various claims (organic, gluten-free, dairy-free, sugar-free, meat-free). Product taste and gustatory pleasure, so important for commercial success, are often overlooked.
Many food and drink companies do not have their product’s taste validated by external panels. Most of the time, a launch decision relies on the company’s decision-maker’s opinion, at best influenced by some form of small scale internal or family validation.
Only seldom is the taste of a product evaluated by external consumer or expert panels providing objective, data-driven input on the quality of the products. However, it’s essential to do so for a couple of key reasons:
Reducing your risk
Research by leading data analytics company Nielsen has shown that products that are deemed “not ready” on product-driven dimensions but launch anyway have an >80% failure rate in-market. The difference between a strong and a weak product experience can result in sales difference of more than 30% in year one.
Although external product taste validation has a cost, it is significantly cheaper than that of a failed launch. If carried out during the development phase, it can also provide invaluable information that will help to optimise the product. By making sure the product tastes great, you can create a strong, positive product experience for consumers that will encourage them to keep on buying your product, leading to a high repeat purchase rate and ultimately to a successful product.
Convincing your stakeholders
Once a product is ready, the team often needs to convince multiple stakeholders that the product will be a success (this may include senior management, board, investors, retailers, distributors, etc.).
Having external validation that your product tastes great can help you demonstrate quality and reassure your stakeholders. External validation from a reputable agency is also much more reliable than internal testing, which is often subject to inventor’s bias and is difficult to quantify.
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86% of surveyed stated taste as their primary reason for buying a product. What are the factors that influence consumer choice? While some products are succeeding the majority are failing. And here is good reasoning.
Although the method you choose will depend on what kind of information you are looking for, in this article we’ll review the most common methods and audiences to help you make your decision.
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