Monday, May 14, 2012

Update or Innovate?

In a survey conducted by Grocery Manufacturers of America (GMA) and Accenture, only 36% of consumer package goods (CPG) companies believed they have a holistic, effective approach to new product development and introduction (from innovation to end of life). Yet these executives know the future of their companies will be tied to their ability to innovate to grow segments and steal share from competitors.  One frustration is lack of new product success even with a large investment in innovation.    

The Nielsen Company / BASES, a leader in tracking and predicting new product success concluded that there are 12 Key Factors that determine consumer adoption and success.  A low (or below average) score on any single factor will be the weak link that leads to market failure.     



Nielsen argues that by understanding and addressing each of the 12 steps, companies have a much higher likelihood of success in the market.  Certainly true, but for most companies, this type of optimization will be difficult.  

While big, new, innovative ideas certainly disrupt a category, updating and extending an existing brand has a much greater chance of success since many consumer adoption factors are already in place -- awareness, positioning, find-ability, etc.  The higher chance of success makes updating a more profitable approach.  

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