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Understanding the market and building strategic relationships mitigates the risk associated with innovation Testing the market with a new product is instrumental prior to a full commitment Near real time tracking during the implementation phase facilitates successful management of the product forecast Availability of category specific benchmarks, to identify, track and forecast new product trends can guide the launch implementation process. Identifying targets to aim for, provides a diagnostic for assessing a products true potential, within weeks of launch. Fast identification of issues with in store availability at key times in addition to promotional and merchandising compliance enables the deployment of mitigation actions
New products are the lifeblood of business so risks should be kept to a minimum Developing strategic relationships for NPD will lay foundations for end to end success Granular data and expert analytical insight provides a clear direction for developing new product campaigns. It is vital to understand previous launches to reduce the chance of implementation mistakes
Full launch of a new product across markets is expensive and getting the product, shopper communication and in store implementation right is fundamental for success Store level data and analysis using test versus control methodology provides a detailed assessment. A pilot can be properly reviewed and used to finalise a full go to market strategy
Using key measures derived from weekly sales data in addition to observed promotional information, the effectiveness of new product launches can be tracked and evaluated.
Category specific benchmarks, to identify, track and forecast new product trends, provides guidance through the launch of product innovation and can support the process to improve long term performance prognosis.
Use granular store level information to accurately quantify the effectiveness of new in-store marketing projects and identify opportunities to improve the program and mitigate costly risks associated with a national launch.
Kelloggs plans to achieve 25% more sales from innovation launched in 2011 than it did in 2009 as part of a strategic move from renovation to innovation for existing brands. As part of this strategy, the group is placing increased focus on consumer need states and differentiation based on the emotional benefits of each product.
www.igd.com, 9th June 2011
Using retailers daily sales data and in store observation, track and optimise on shelf availability both on and off promotion, and merchandising commitments to ensure new products are launched with the best retail environment to promote success.
To discuss this report in more detail arrange a meeting with SymphonyIRI. Contact your account representative, call the new business team on 01344 747 856 or email SnapshotReports@SymphonyIRI.com
The data in this report was extracted from 175 continuously reported FMCG categories in 2010 & 2011. The categories have been amalgamated into industry groups for ease of interpretation. New products have been drawn from the database at a variety of levels dependent upon recent characteristics of NPD within the category. All data used is from the multiples sector and excludes NPD from retailer own brand ranges. The minimum distribution requirement for inclusion in these results was 15%.
Has the tide turned on the decline of new products being launched?
worse for new products since so many of them struggle to maintain their position and try to use lower prices to bolster sales. Most new products do not succeed Success can be measured in many ways but in this study the key criteria is a relative sales rate measure, known as the Sales Rate Index (SRI). Compared with the average value sales for existing items in their category sector, when normalised for distribution differences, new products overall come up short. Against the existing item average Sales Rate Index of 80, new products as a
with a well positioned fact-based representation to the retailers. It is clear early on if a new product launch will succeed Within 8 to 10 weeks of a new full launch (inclusive of all intended supporting marketing activity) the retail argument for increasing distribution can be clearly made based on sales rate. This is an important window of opportunity and if action is taken then these new products would benefit from a stark statistic, that absolute sales from new products achieving distribution above 50% sell 4 times more than those that dont.
To grow sales its critical for new products to sell faster than the average of existing products.
Selling faster than average gives good cause to extend distribution. It only takes 6 months for the worse performers to start being delisted. Only 1 in 5 new products sell faster than the sector average.