How to avoid the pitfalls of new product failure

It’s no surprise that the more important an issue is to a person, the more he or she will scrutinise it - all the moreso if the issue is somewhat difficult to evaluate. As a result, new concept research or pre-launch product research is one of the areas in which market research most frequently comes under fire. Whether the clients are creative entrepreneurs or hard-nosed accountants, both groups will be quick to criticise research that has the potential to ‘green-light’ a product that’s doomed to fail, or otherwise bury a concept that would have succeeded if given the chance. From the researchers’ perspective, there are also countless examples of research results that go unheeded, thus questioning the purpose of the research to begin with.

For marketers facing the quandary of researching new products, especially the ground-breaking ones with few precedents, the instances outlined above can hardly be reassuring. There are four key factors that must be borne in mind whenever research is being commissioned for such work.

The first factor to account for harks back to the scientist Heisenberg, whose famous uncertainty principle was that the very act of studying something can change it. In other words, the very act of researching consumers can change their behaviours and thoughts. When this is understood, it places yet more uncertainty around the fact that when we’re studying people, we’re studying the world’s most complex, irrational and unpredictable things. Just because a new product or service should be accepted and used, doesn’t mean it will be. This very fact alone supports the use of researchers who are trained to understand people, not just markets and marketing.

The second factor to account for is the business environment that the research is going to be used within, and the context in which the research is going to be used. For early stage exploratory brainstorming, qualitative research such as focus groups are often appropriate. But for winning over a sceptical board or venture capitalist, then the security of a large survey will be required. Misreading this situation can lead to research findings being wholly discounted, no matter how worthwhile they may be.

The third factor to bear in mind is that research cannot wholly predict the success of a new product or service, because there are so many uncontrollable factors at work. From the time of the research to the launch, competitors may come and go, distribution networks may be altered, marketing plans bungled and social trends may be changed.

Therefore it is very important that research into new products and services keeps a close eye on the core needs of the target market. By focusing on the needs of the consumer, and how well they may or may not be currently serviced, the research will gain a better understanding of the consumers’ likelihood of using the new offering in question. But of course it is well known that consumers over-estimate their likelihood of using new products and services, and so a simple analysis of what consumers say they want is crude at best and usually results in over-optimistic estimates of consumer uptake - the classic problem of overclaim.

The fourth key factor in researching new products or services is this very need to account for overclaim, and it is best done so by measuring all the environmental factors that come to bear on peoples’ psychological decision-making processes. Factors that must be considered include:

• the attraction of the proposed new service or product itself;
• the consumers’ satisfaction with their current, comparable services or products;
• the importance placed on the decision itself; and
• the level of consumers’ ambivalence felt towards the category or decision in question.

Understanding all these issues, and most important, their algorithmic interplay, allows good researchers to identify and understand such situations as…

• when consumers express strong interest in the proposed new service or product, yet in truth are unlikely to actually buy;
• where consumers are dissatisfied with their current options, yet remain unlikely to switch to the proposed alternative being researched;
• where consumers are dissatisfied with their current options, yet are highly likely to switch to the proposed alternative being researched;
• where consumers are unlikely to switch, despite their claims of the opposite.

Only when researchers can account for these factors, and explain them, can research for new products or services ever hope to survive the illogical maze that is the mind of the consumer.

Jonathan Dodd