Market study results released: new product introduction success, failure rates analyzed.
Linton Matysiak & Wilkes, a market research and new product development firm for the perishable foods industry, reviewed 1,935 new products introduced by the top 20 U.S. food companies to determine overall product mortality, new item mortality, line extension mortality, line extension to new item ratios, regional breakdowns and national introductions. LM&W examined where these new products were being introduced, how many of those products were new and innovative items, and how many were product line extensions.
Study findings include:
* The failure rate for new product introduction in the retail grocery industry is 70-80 percent.
* The U.S. Top 20 enjoy a 76 percent success rate for new product introductions.
* The "Bottom 20,000" U.S. food companies have an 11.6 percent success rate for new product introductions.
* A major difference between Top 20 new product introductions and Bottom 20,000 introductions is the apparent lack of research and strategic marketing done by the Bottom 20,000.
* The new product introduction cost for retail grocery stores averages $270 per product, per store. (Approximately 5,000 new products are introduced into a supermarket annually).
* Each year, retail grocery stores spend an average $956,800 per store to introduce new products that will fail.
* Market research and strategic marketing can increase new product success rate and save money for manufacturers and retail stores, based upon the Cost of No Cost model.
"We found that big companies that practice marketing as an integral part of daily business management are extremely successful," said David B. Linton, partner of LM&W and the study's principal investigator. "What is shocking is how successful in contrast to the total pool of manufacturers. We wanted to know, 'Who is enjoying the success and why?," he said.
LM&W used statistics from the U.S. Commerce Department (Annual Survey of Manufacturers M3 Report, 1994), Fortune's Top 100 U.S. Companies listing, the 1994 Deloitte & Touche study of costs for new product introductions and promotions in the grocery industry, Supermarket News reports and New Product News reports. The survey was conducted in September 1996 for products introduced between January and December 1995.
The complete study analysis is available in "Marketing, Witchcraft or Science." For a complimentary copy, call 614-855-8191. Contact: Theresa E. Brown, Brown Communications, Inc., 614-431-1460.
|Printer friendly Cite/link Email Feedback|
|Publication:||Frozen Food Digest|
|Date:||Jul 1, 1997|
|Previous Article:||Superior Dairy gives back to communities for 75th anniversary.|
|Next Article:||Mexico trade, three years after NAFTA.|
|Monetary Regime Transformations.|
|Building an effective outcome study in behavioral health settings.|
|Nanosys: matrix-free MALDI.|