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 NEW YORK, May 10 /PRNewswire/ -- American businessmen are shooting from the hip when it comes to bringing a new product to market, according to a new American Marketing survey.
 They have a lot less trust and dependence on test marketing programs in their rush to the marketplace. In fact, three quarters of the 200 businessmen surveyed indicated they would rather risk failure but be first in the marketplace with a new product. The 85 respondents represent senior executive at consumer package goods manufacturers and business to business organizations.
 They also feel it is no longer profitable to develop their own products, but rather acquire new ones. They also indicate that two- thirds of products introduced annually are useless.
 The full survey findings will be released on Thursday, May 13 at AMA's 25th annual New Products Conference at the New York Hilton Hotel beginning at 8 a.m. The all-day New Products Conference is open to the public and to AMA members. Cost for AMA members if $265 and for non- members $295. For information call AMA at 212-687-3280.
 With most businessmen agreeing that new products approaches and procedures are not in sync with the current changes in the marketplace, speakers representing a full range of product development disciplines will focus on a current dilemma in the marketplace.
 The dilemma: increased need for new products, new brands, and line extensions versus existing systems and procedures developed for a previous era and market climate.
 The study was directed by Larry Chiagouris, conference co-chairman and executive vice president at Backer Spielvogel Bates, Inc. and the field work was conducted by The Heller Research Group. Highlights of the survey include:
 -- The "rush the market" mentality still dominates in light of increasing domestic/foreign competition, especially in the consumer marketplace.
 -- 75 percent of the businessmen agree that the "first new product to hit the market has a better chance of success than the second."
 -- this need to move quickly is fostering less trust, dependence on test marketing research programs, especially among consumer goods manufacturers.
 -- a new wave of acquisitions is predicted following the skittishness from the 80's merger/acquisition frenzy.
 -- 27 percent say it is more profitable to own and develop their own product rather than acquire a new product, down from 48 percent last year.
 -- 46 percent say it is better to focus on line extensions than new products and feel the product has a better chance of success if sourced from a well established brand name.
 -- Computers are the most important new product entries over the last five years.
 Among new product entries in the food category is ConAgra's "Health Choice" foods. Charles "Mike" Harper, chairman of the board of ConAgra will speak at the luncheon beginning at 12:45.
 "Despite this rush to new products, most businesses surveyed have a pessimistic view in terms of new product payout," says Larry Chiagouris, executive vice president at Backer Spielvogel Bates, Inc., and conference co-chairman. "Executives see less and less utility, longevity and profitability from their collective, new product ventures.
 "Many see an over saturation and risk of diffusing the brand's value. This problem is especially acute among consumer goods manufacturers. They're looking for immediate profitability despite the risk to brand franchise."
 When asked what percentage of all new products and services introduced in the past year do you believe provide consumers with new/improved benefits, 56 percent surveyed said less than 30 percent of the products provide these benefits. Eighty percent believe only 30 percent of the new products will be around in five years. And 72 percent believe less than 30 percent will eventually meet their business objectives.
 "Many executives may internalize this," Chiagouris says. "Through this survey I believe they can be comforted in knowing that other executive feel the same way.
 "Recognizing how pessimistic business executive are towards their new products ventures, they really need help to insure that number is no longer 30 percent in terms of paying out.
 "Consumers and trade voices will have a big impact on new products. Businesses are increasingly relying on these non-traditional sources to boost their new product success rates."
 The survey reveals a 25 percent gain in trade feedback, 21 percent increase in consumer letters and 18 percent gain in outside consultants in 1993 over 1992.
 "Advertising agencies are waking up and getting more proactive in client's new product development," Chiagouris notes. "Clients are recognizing their efforts. For many year ad agencies were getting bashed for not doing enough, not providing enough client service or new product consultation. The survey shows the tide is turning."
 In 1992, 56 percent of all businesses said agencies don't give new product development enough attention. For 1993 that number has dropped to 44 percent. Among consumer manufacturers and large companies there has been 21 and 17 percent improvements, respectively.
 "There's a growing need to provide more full service agency support, not less, as in the past 10 years," Chiagouris says. "Clients want more help from agencies. They want services that feed the new product planning process."
 When asked what the most important agency contributions are for new product success, 97 percent said defining unmet consumer needs; 84 percent said having the ability to uniquely position the product versus existing brands; 80 percent cited effective advertising; 61 percent said developing strong brands that support line extensions; and 58 percent said selling management on need to better support new product marketing efforts.
 "It's a real marketing new product conundrum," Chiagouris notes. "On the one hand business executives want to be first in the marketplace with a new product. On the other hand, marketing research which takes time, when judiciously applied is gaining favor as a helpful new product resource."
 The survey reveals that 91 percent of all businesses feel qualitative research and large scale quantitative research are helpful, a 10 percent improvement over 1993.
 In other findings, technology products (computers and laptop) are the hands-down winner as the most important new product entries during the last five years, followed by communication products (cellular phones and fax), automotive products (air bags), food products ("Healthy Choice"), and pharmaceuticals products (ethical to OTC).
 -0- 5/10/93
 /CONTACT: Larry Chiagouris, executive vice president of Backer Spielvogel Bates, Inc., and conference co-chairman., 212-297-7094/

CO: American Marketing Association ST: New York IN: SU:

LD-AH -- NY024 -- 6362 05/10/93 09:56 EDT
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Date:May 10, 1993

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