Have you ever wondered why it is that some companies are able to launch a series of new products in a short span of time, while others struggle to roll out even one or two?
ITC, for example, in the last few years, has invaded the FMCG category by launching the Sunfeast range of biscuits, Yippee noodles and Bingo range of snacks. Similarly, in the mobile phone category, Samsung has managed to launch several models of cell phones rapidly. There is something about these companies that enables them to achieve this speed of introducing new products in the market place.
Speed and technology
Speed, in this context, is defined as the time taken between developing an idea, and actually launching it.
This measure varies across industries and may range from a few months to a few years. The food and drinks categories are the ones with probably least ‘lead’ times, while manufacturing and industrial categories have the highest lead time.
The extent to which technology is used in product innovations also affects the speed with which they are introduced in the market. The higher the technology, the more radical the innovation, and, hence, the greater the lead time. The lower the technology, the more incremental the innovation, and less the lead time. Whatever the case, it is important that the given company tracks the duration between development and launch, as it indicates new product efficiency.
Speed, in most cases, goes against the rigour of the development process itself. It is said that Pringles (one of Procter and Gamble’s snack wafers) was in development and testing for 12 years before it saw the light of day in the market! The company thought it was absolutely important to perform adequate consumer checks and validation before it was launched. And, given the success the brand has seen, it can be safely said that their choice of ‘rigour over speed’ was well justified.
But not all the time
However, there have also been examples to the contrary. Sometimes, you may see new brands on the shelves, but when you visit the store next time, there’s no trace of them. The reason is not that demand has outstripped supply but that the quality of these products is so poor that consumers have rejected them, and manufacturers have withdrawn these products.
These are clear cases where product-testing rigour has been compromised to achieve speed. This situation causes long-term damage to the manufacturers: their credibility suffers, both with the consumers and the retailers. Retailers refuse to stock products the next time around. It requires a fair amount of brand-building to gain back consumers’ trust, once quality has been compromised.
What is a good strategy?
So, which is the best route? To launch products speedily and let consumers decide their fate, or perform sufficient in-house testing and then launch a product, even though there may be delays?
There is no right or wrong answer to this: the answer lies somewhere in between.
It is important to appreciate that developing and launching new products is an extremely expensive affair. According to research, around 46 per cent of resources are wasted on failed new products in the FMCG category. This is a huge number. New products are an increasingly important contributor to business revenues, which is why organisations need to have a stream of products coming out frequently.
How to ensure rapid launches
Here are a few ways in which you can ensure rapid launches of new products:
Multiple idea generating sources : First, there should be several sources from where ideas come. Free-flowing ideas should arise from both internal (employees) and external (customers, competitors, and vendors) sources.
Leading shampoo companies, I am told, have excellent vendor relationships; so much so, that the vendors end up advising companies on the choice of fragrances for their subsequent new products. This kind of multiple-source idea generation will ensure that at no point in time is there a dearth of solutions.
Have regular review meetings : Second, have regular review meetings. These meetings can help track new product activity and build accountability. Senior management will instil a sense of seriousness in the new product timelines; projects falling short can be evaluated separately.
Build database : Third, build up a sufficient database inside the company on its past performance in the area of new product development. That is, if a company can understand that its idea-to-launch conversion has been a certain percentage in the past, then it can use that information to generate adequate number of ideas to achieve its business targets.
To elaborate, as a CEO, if I know that 20 new ideas have brought in a revenue of ₹20 crore, I will ensure that the ratio is maintained while chasing a new revenue milestone in the next few years.
Remember: Speed is no advantage around a vicious circle. And new product activity can become an iterative vicious circle if speed is honoured over product excellence.