Successful new product launches are those that listen to consumer needs and develop an in-depth understanding of what drives consumer preferences. Whatever brand strategy is chosen for a new product, the business must be prepared to invest a significant amount of money over the long-term to support the product. Often new product launches fall down as the media investment is much lower than required, and solely focus on short-term gains.
New product development (NPD) is the process of bringing a new product to market. This includes conceptualising ideas, designing, developing and eventually launching a new product or service in the market.
1. Premiumisation is the best strategy for new products to fuel category growth
A study of over one thousand successful launches in 38 categories globally found that all benefited the manufacturer with 40-50% of sales won from competition. However, from a total category perspective only 46% delivered category value growth. This is very rarely the result of attracting new buyers to the category. Driving additional category purchase or volume was much more likely but premium pricing was the biggest factor likely to drive category value growth – though it can limit the size of the launch.