Industry leaders continually invest in refining and evolving their current product/service assortment through new product development. They do this to remain competitive as well as to generate measurable new top-line revenue for their organizations. Yet, the failure rate for new product introductions remains frighteningly high. Ask anyone what percentage of new products fail. The usual answer is somewhere between 70-90 percent.

Market Research can help reduce the failure rate considerably when applied relevantly and conducted correctly. But, there are five pitfalls that need to be avoided;

 

 

 

 

 

1. Test What You Intend to Launch

The features, benefits, and attributes that you use to describe and evaluate the product in research MUST match the product that you will bring to the market as closely as possible. Testing attributes that aren’t possible or too expensive may lead to unrealistic demand forecasts. For example, in testing a new online video game service, the research described the product as including hundreds of games from the top game publishers and a seamless interface and game-playing experience. Target consumer response to this concept was highly positive. However, when it was time to launch the product, many of the top game publishers were not included and the product required advanced drivers and high-powered PCs with very large RAM capacity to perform optimally. As a result, consumer expectations were never reached, and the product ultimately failed.

2. Don’t Depend on Qualitative Research Alone

Qualitative Research (focus groups, depth interviews, ethnography) utilize small, non-projectable samples. Qualitative research is very effective in providing guidance, hypotheses development, and disaster prevention. However, because the samples are small and not representative of the entire target market, the detailed findings developed solely on the insights from qualitative research may be wildly different from the reality of the marketplace. Always follow up with quantitative, projectable research to confirm hypotheses!

3. Respondents Will Often Overstate Their Intentions

Overstatement of intent bias is always an issue when measuring constructs such as “likelihood to buy” or “overall interest”. Respondents just can’t predict exactly what they intend to buy, especially if it’s a highly innovative product. There are a few ways to handle overstatement. First, when using scales, it helps that all of the data points are labeled or anchored so that there is no ambiguity of how to answer the question.  Second, you may also want to consider using a down weighting scheme using historical empirical data to verify actual product take rates to survey results.Or, third, you may consider a hybrid approach, and instead of directly asking people for their own likelihood to buy, you ask them to project their forecast of what others would likely buy. In this way, you can overcome their personal… Click To TweetBut one of the best ways to overcome overstatement is to measure the likelihood to buy using a trade-off technique such as Discrete Choice or Conjoint Testing or MaxDiff. These techniques “force” respondents to make trade-offs and distinct choices of one product over the other, thus mitigating bias of direct questioning.

4. Evaluate Features, Benefits, and Attributes of the New Product In Bundles, Rather Than In Isolation

The most famous case illustrating this caveat is the Edsel. When developing the Ford Edsel, researchers tested various components of the car in isolation. They identified the preferred bumper, the preferred grill, the preferred dashboard configuration, and so on. When all the research was completed, they combined the top tested components together. But the car that resulted did not look or operate optimally. Utilizing one or more trade-off testing approaches such as Discrete Choice, Conjoint, or Max-Diff mentioned above will help to avoid this problem.

5.Remain Objective! You May Have to Declare that the “Baby” Is Ugly.

As a researcher, it is your duty to remain objective, to base conclusions and insights only on the data. The person or team developing the new project has a special interest in the success of the new product. But, for the good of the organization, if the research identifies flaws or inconsistencies, or simply disinterest, then it is important to clearly communicate this to the product team so that either adjustment can be made to improve the product or that the launch can be canceled. I once conducted a pricing test for a new product that indicated that the target price that consumers were willing to pay was about $100. However, the cost to make and sell the product was about $200. Unfortunately, despite the obvious discrepancy, the client decided to launch the product at a price of $285. Suffice it to say, the product was a flop. So, not only do you need to tell the client bad news, they need to believe you and act accordingly.

Following these guidelines will greatly increase your odds of success. But remember, ask the right questions, of the right people, at the right time.

 

Carl Fusco is an accomplished Marketing Research Consultant who helps businesses more effectively solve problems by applying research techniques and data-based insights.  For more information email him at carl_fusco@yahoo.com or phone him at 770-364-7160.