Why new product launches are so difficult
Businesses are faced with a number of hurdles when introducing new products to the market. These hurdles include:
- Limited resources. Anyone can come up with ideas for new products—many of those ideas will be excellent. No organization has unlimited resources, however, and businesses must choose the products that align with their current financial, technical, and other resources. Sometimes, predicting how those resources will shift during the new product development (NPD) and new product introduction (NPI) processes can be difficult.
- Market uncertainty. Predicting how the market will react to a new product can be difficult. When you’re the first company to launch a product, you might receive unexpected feedback that forces you to redesign your product. Your competitors may also launch their product around the same time—or wait for you to launch yours so they can avoid any mistakes you make.
- Lack of experience. You are, by definition, moving into uncharted waters when introducing a new product. However, NPD and NPI processes can be improved with experience. When you’ve rarely or never introduced new products, the lack of organizational experience can lead to unexpected delays and costs that can torpedo your product long before its launch date.
- The risk of failure. With all the resources a business has to expend to develop and introduce new products, this is among the biggest hurdles of all. Should the product fail, the business may not be able to recoup its costs. This risk can dissuade companies from NPD and NPI altogether.
Those are just a few of the hurdles that make new product launches challenging. Then there are the actual NPD and NPI processes. There are hundreds of moving parts, from market research to manufacturing. Information silos present a particularly pernicious challenge—when teams aren’t communicating properly, vital information might not be shared.
With all of these hurdles and challenges, it’s a wonder companies ever release new products at all! We’re being a bit tongue-in-cheek, of course; there’s no end to the number of good reasons to be first-to-market with a new product. They include:
- Cornering the market. Introduce an innovative new product well before your competitors, and you’ll establish brand loyalty that may be insurmountable.
- Growing your customer base. Have you identified a segment of the market that isn’t being catered to? You can capture new customers by creating products tailored to their needs.
- Increasing the total spend of your current customers. Your existing customers may be clamoring for an accessory, or a product that works synergistically with your existing product line. Provide it to them, and you can increase how much they spend.
These are just a few reasons companies are constantly clamoring to introduce new products. In short, by introducing new products, you can significantly increase your revenue year over year—and once the initial cost of creating a new product is out of the way, you can reap the benefits with few additional costs.
One of the keys to a successful new product launch is to have a process in place. Let’s explore NPI processes that can help you address the hurdles and challenges we’ve just discussed.
What is the new product introduction process?
The new product introduction (NPI) process encompasses all of the steps that it takes to get your new product to market, from conceptualization to manufacturing. This process isn’t linear, but it generally goes through six steps:
- Conceptualization/ideation (coming up with the product idea)
- Product definition/feasibility (in which you narrow down what the product is and whether or not it’s feasible)
- Detailed final design
We recommend onboarding all relevant parties in the conceptualization or product definition phase. This may include engineering, marketing, finance, manufacturing, and anyone else who is relevant to your new product. By doing this, you’ll be able to quickly assess whether or not the product is actually viable.
Everyone has a role to play in the NPI process:
- Marketing will introduce the voice of the customer (VOC) early in the process. With VOC present from the starting point, you’ll be able to adjust your design according to feedback before launching your product, seriously cutting back on the need for redesign
- Engineering will help you determine the feasibility of the product, along with tolerances for each of its potential parts. They’ll be able to create a number of different prototypes for manufacturing to test, and give feedback on suggestions brought forth by marketing.
- Manufacturing will help you assess the potential costs of a new product, using their experience in materials converting, prototyping, manufacturing to scale, and product design. They’ll work closely with engineering.
These are just a few examples of why it’s absolutely vital to bring everyone into the NPI process as early as possible. These teams should be communicating regularly—schedule meetings both during certain timeframes (e.g., once a week) and once milestones are met (e.g., you’ve moved to the design and prototyping phase).
Setting milestones is, indeed, a crucial part of the NPI process. Any number of different project management frameworks (Scrum, Kanban, etc). Individual teams can choose their own project management methods, but the milestones for these teams should be coordinated so that everyone can move to the next step of the NPI process together.
Why these are best practices for new product introduction
Let’s examine each step more closely to understand its importance in the NPI process:
- Conceptualization/ideation: The idea phase. Without this step, you have no product to introduce. The goal of this step is not only to come up with an idea for a new product, but to gain buy-in from every team needed to move the product forward. By the end of this step, you should be able to answer these questions:
- What is the product?
- Who is the product for?
- What needs does the product meet?
- How does the product fall in line with the overarching goals and mission of your business?
- Product definition/feasibility: In this essential phase, you’ll determine whether or not you have the resources to build the product, and whether or not the ROI will be worth it. You’ll also establish whether or not the product can actually be built; in the next step, prototyping, you’ll learn if the product can be scaled to market. This phase ends when you have a solid business case for your product, and you can move to prototyping.
- Design/prototyping: One of the reasons it’s important to have your contract manufacturer on board from the first phase is that they’ll be conceptualizing possible prototypes long before you make it to this page. A great manufacturer will also be able to produce a number of quick-turn prototypes, so if you have multiple designs, or need to tweak your designs, the process will go smoothly. This step ends once you have a solid working prototype you can move to production.
- Detailed final design: By now, you’ll have found a prototype that you like. That prototype will still need to be refined for it to be viable for mass production. At this phase, you’ll create a final design in conjunction with your contract manufacturer. This final design will include materials and cost and should be approved by all relevant stakeholders.
- Pre-production: This is the validation phase, in which a trial run of your product is produced. In some cases, these pre-production models will be released to test markets to get customer feedback before the first run. The manufacturer will ensure that the costs and speed of the pre-production run are such that they can be scaled to full production.
- Manufacturing. Your product is on the shelves! Continue to pay attention to feedback from customers and other stakeholders.
Keep in mind that these steps aren’t linear—you may find yourself cycling between product feasibility and prototyping repeatedly or even moving back to prototyping if your final design is too expensive or difficult to produce.
An experienced NPI partner like General Label can help you streamline your NPI process and reduce the number of times you need to move through these steps. Get in touch with us to see the difference an experienced contract manufacturer like General Label can make!