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The success rate of new product launches currently remains limited: around 7 products out of 10 have disappeared from the shop shelves three years after being launched! How can this phenomenon, which isn’t a new one and which manufacturers are struggling to turn around, be explained? In fact there are several reasons for it; let us look more closely at some of them.
Innovations (especially the most disruptive ones) need time to become established, convince consumers and find their ‘audience’ / target, but they do not always have the chance to do so: in an economic world dominated by short terms requirements, innovations that are slow to cut through generate impatience and are rapidly delisted, to be replaced by those whose sales are better initially even though they might only be a flash in the pan.
The result is that manufacturers have started proposing to retailers purely tactical innovations (an umpteenth classic fragrance for example). Although these innovations have the advantage of injecting dynamism into the range in the short term and occupying extra shelf space thereby hampering the competition, they do not generate sufficient incremental sales (no cannibalisation) in the long term. This is because consumers’ real expectations have not been put at the centre of product development in these innovations.
It is also sometimes the case that the innovation is born of a specific know-how that the manufacturer wishes to ‘impose’ as it stands on consumers,without consumers having really expressed the need for it.
To back up these observations,the new concept tests conducted by TNS reveal that 43% of failures are due to a mismatch between the promise of the new product and consumers’ expectations:
Therefore, when it comes to innovation, it seems essential to us to get back to basics by developing an offer that matches demand.This is precisely what the Matrix technique proposes, the main aim of which is to identify growth opportunities for companies.
The first objective of Matrix is to identify consumers’ need states in a given market. In-depth consumer segmentations also enable us to define what clusters of consumers express what types of need.
These need states are then compared with the performances of the existing offer to identify the gaps, which are also innovation opportunitiesfor the company.
But consumers have become more demanding than ever. For example, a few years ago, they were already no longer content with just a mobile telephone that had multiples functions for making & receiving calls. Instead, they wanted their mobile to be a ‘life tool’ in its own right, that would enable them to surf on the internet, listen to music, play video games, take photos & videos, etc…
In short, if an innovation is to be a winning one, it cannot afford to simply fulfil one needstate only; its future success depends on it simultaneously fulfilling a series of needs to appeal to consumers.This is precisely the strength of Matrix: detecting what combination of needs the innovation must meet to fill the gaps in the existing offer.
The final information delivered by Matrix is in the form of growth platforms that describe the main attributes winning innovations need to have.
In other words, Matrix identifies the main routes an innovation needs to take to be a great success. The method therefore avoids marketing teams scattering in different, sometimes random, directions when it comes to innovation. Instead, it focuses their human, financial and industrial means in the right direction.
A quantitative Matrix study is followed by an Insight generation stage (what consumer-tension does my innovation need to overcome?) and Idea generation stage (what precise characteristics does my innovation need to have?) to build the new product / service.