OOPS, I DID IT AGAIN

Taking the Gamble Out of New Product Launches

Here are two factoids that will make you either proud or ashamed of being a marketer:

According to New Product News, there were 16,500 new household consumable products introduced through retail stores in 2000. Add in automobiles, electronics, pharmaceuticals and other sectors, and it’s closer to 25,000.

More than 80% of products introduced have a life cycle of less than 24 months, according to a recent survey of CPG senior executives.

Viva Las Vegas

And yet, despite the visibly high stakes, product managers generally have low confidence in making launch goals. It’s not because management blindly dictates unreachable numbers (at least not always); it’s mainly due to a universal inability to accurately predict what consumers are going to do. Focus groups and surveys can report the most positive intentions but are notoriously inaccurate as predictors of actual behavior - the High Say, Low Do phenomenon. Segmentation analyses have only a 20% accuracy rate in spite of their supposed quantitative rigor. Anyone who’s been involved in launching a new product can attest to a polarity of feelings: optimism, excitement, and relief; counterbalanced by nervousness, fear and doubt. Given the sizable investments behind any launch, these conflicted feelings are just like those of a compulsive gambler.

And the cost of developing new products is only increasing. Gillette spent $700 million on R&D alone to create its new Mach III razor. Procter & Gamble spent $200 million to develop and test its Olestra fat alternative and is reportedly investing another $160 million in the plant that will produce it. RJR Nabisco spent $325 million on the Premier smokeless cigarette and another $125 million on an updated design, the Eclipse. In fact, more than a half-billion dollars has been spent on the development and marketing of smokeless cigarettes. So how can companies afford to rely on speculative, imprecise predictions of consumer uptake with so much at stake?

Beating the Odds

Here’s great news for product managers: you can stop worrying about whether your new product will be a boom or a bust. At Gang & Gang, we’ve developed a technology called Resonance ^TM that simultaneously adds breakthrough insights and reduces the risk of failure. Resonance systematically uncovers what truly motivates early adopters; we take these insights and provide marketers with new tools to target and reach them. Our approach is grounded in the recent advances in neuroscience that explains how the brain makes decisions, and how the convergence of thoughts and emotions that manifest themselves in actual behavior. Emotions are not in constant conflict with logic, as is the popular belief; in fact, they continuously integrate with logic in the pre-frontal cortex of the brain - to guide us towards thoughtful decisions. Emotions have a wide range of intensity (passionate negative/positive) that results in motivation when highly positive and inhibition when highly negative. One can find strong parallels between the terms motivation and customer value - both refer to the realized personal benefits of a product or service offering.

A current client (a leading pharmaceutical company) used Resonance to re-launch a new drug that had fallen considerably short of their expectations (and Wall Street’s, too). This failure was startling in light of its superior product attributes and rave previews from primary care physicians and specialists. The marketing team has been completely misled by the responses to the surveys and interviews they conducted; to make matters worse, they couldn’t even diagnose the problem of under-adoption in post-launch interviews.
By allowing doctors to express themselves through their emotions and feelings, Resonance revealed a number of key issues that were "off limits" to traditional research methods, e.g. the role of the doctor as healer and God-like figure, and other elements of self-image that were too intimate and uncomfortable to talk about.

This breakthrough learning was nothing short of an epiphany for our client. They revamped their entire brand positioning, marketing communications, and sales strategy to reflect the new learnings from Resonance. They used a new approach called Motivational Segmentation to identify the doctors who would most likely prescribe the drug, using a short set of qualifying questions posed by the detail rep. By focusing their energy and resources on the projected 25% of motivated MDs, the company was successful in blowing past its original estimates, and will likely be a $1 billion brand in 2001.

It’s not necessary to wait for a failed launch to get the benefits of Resonance. You can derive maximum benefit by understanding motivations at the earliest stages of new product concept development. One high-tech client used Resonance to predict planned customer adoption of a unique video service concept, and to shape their launch strategy. Another e-tailing client used Resonance to decide which geographic markets they should to expand their home-delivery service to, and in what order. In both cases, the clients needed to avoid the "High Say, Low Do" trap that would have been set by traditional research methods.

We Do It Again and Again...

At Gang & Gang we specialize in helping our clients reach maximum success with new product launches. We follow a four-step process - Understand, Segment, Execute, and Track - that uses Motivational Intelligence^TM to achieve superior results. If your recent launches been too many oops and not enough coups, and you’re ready for radically improved results, contact us. We’ll put you on a new winning streak.

This article was written by Tim Guen, Senior Vice President for Gang & Gang, Inc. 

For more on how the Resonance technology instrument works, click Resonance

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