In 2011, I was a regular contributor to the American Express OPEN Forum on the topic of innovation. Here is the first one of that year:
Have you ever woken up in a cold sweat in the middle night from a nightmare focused on you throwing a big party that nobody comes to? Or, in real life, have you ever thrown a big launch party for a new product or service, made a lot of noise with advertising, marketing and public relations – only to have the sales returns be anemic at best?
According to a Linton, Matysiak & Wilkes study from 1997 titled Marketing, Witchcraft or Science, the success rate for new product introductions in the food industry is only between 20 and 30 percent. But, there is a key insight inside that data not to be ignored. The results highlight the power of market research and strategic marketing:
- The bottom 20,000 U.S. food companies in the study combined for an 11.6 percent success rate.
- The top 20 U.S. companies in the study enjoy a 76 percent success rate for new product introductions.
Sure, the 1997 data is coming from a single industry that many of you may not be in, but other data I’ve seen from the Product Development Management Association (PDMA) and other sources are similar and reinforce the importance of market research and strategic marketing. Worded another way, success in the market is often: