ABSTRACT
It is easy to identify successful new products after they have succeeded. It is considerably harder to do so before they hit the market. Nonetheless, several factors can help predict success or failure.
The idea itself
Generally speaking, ideas derived from providing solutions to problems customers have (active wants) have a better chance to succeed as do those from observing an (often crude) solution to a problem someone has developed/cobbled together. On the other hand, “mental inventions” dreamed up by individuals removed from contact with actual customers and attempts to follow trends which have already “left the station” are likely to fail (i.e., the tenth version is not “cool”).
The new benefit the innovator offers
(It is the product, stupid) Innovations which provide a clear (and easy to observe) advantage on a relevant aspect (a better mouse-trap) have a better chance to succeed. By contrast, innovations which ask customers to change (are not compatible with) their current behavior patterns or to take on risks (operating, social, psychological, or financial) are met with resistance.
The right amount of different
New ideas that are not very new (“lemon-scented” new products) have limited potential. On the other hand, major innovations are 77difficult for customers to categorize and can be “too new” which means at a minimum it would take a long time and substantial effort to get people to buy them.
Whether the company’s reputation (brand) has “permission” to sell products
Many failures (BenGay aspirin, Levi’s suites) involve extensions to categories that do not match a company’s image or perceived competence even if the products are good ones. Establishing a broad brand image or convincing customers a new product fits the current image is an important step toward success.
Catchiness
In an increasing socially connected world, the influence of other customers often swamps marketing effort. This makes the behavior of key individuals (variously known as influential, opinion leaders, and hubs) and their willingness to advocate the innovation to others important. It also means that successful innovations tend to create dense geographic or social network adoption patterns. This makes the ability to encourage contagion quite important (interestingly the mathematical models of new product adoption are the same ones used by the Centers for Disease Control to model the spread of diseases). Pragmatically, grabbing a substantial (20%) share of the eventual market early is important for long-term success.
Stickiness
Customers tend to resist giving up products they value. They also purchase add-ons (e.g., for a car, extended warrantees, rust proofing, and numerous dealer installed options)
Breathing space
Competition rarely allows an innovation to be in a market by itself for long. Its absence, or at least delay in it responding, is a major advantage.
The support behind it
Effort is required to generate awareness and interest. Information is typically needed to allow potential customers to evaluate new products, and means offered to have easy access to the product (e.g. via channels customers use). Put differently, “standard” marketing matters and firms need to be able to produce, finance, market and manage a new product to make it successful.
None of these eight factors alone—or in combination—guarantee success but they all improve the odds for it.