Why Product Launches Fail

We\’re finally through the planning season (yes, it is April and distributors now have less than 9 months to achieve supplier objectives!) and some of manufacturers discussed their new product launch plans (and maybe a distributor shared their approach to new product introductions.)

During the planning process some manufacturers communicate to their distributors about their upcoming product launches.  Why do we say \”some\”? Because many are skeptical to commit timing, even to the quarter, do to engineering, UL, production, etc concerns that affect timeliness.

And then there are other manufacturers / product categories that are known for new products (Arlington, the LED product category, devices) and some who have a couple of major releases (sometimes driven by NEC changes).

The challenge with many, however, is the launch process … how to market the product to drive demand so that the \”guaranteed sale doesn\’t turn into the guaranteed return after 6 or 12 months\”.  Manufacturers invest a significant amount of money in new products and then, for some reason, historically miss the launch due to lack of marketing support.

Distributors can also differentiate themselves as \”the new product driver\” in a marketplace by creatively strategizing to launch new products, present plans for funding to the manufacturer and then tracking new product sales to show they can generate results.

To gain more insight into new product launches we invited Al Schoneman.  Al is an experienced industry marketing professional with a passion for lead gen and lead management driven by relevant content who has worked on the manufacturer side as well as the distributor side of the business.

\"PioneeringIf you look at the history of product launches and do the research on success/failure rates it’s a scary looking scenario. One that would might make you think twice about launching a new product. One resource suggests that as many as 80% of all product launches fail (and the definition of \”fail\” presumes that there were defined, measurable expectations.

The reasons that products fail are numerous. Corporate attentiveness – the amount of time and resource given to a new product – is a big problem. Many companies are focused on tomorrow’s results, or the latest acquisition, or a major project. An old but still relevant book written by a former boss, Pioneering New Products, makes that point well. Product launches tend to get less focus, insufficient resources and a lack of understanding of what it takes to succeed. A few of the root causes are.

  • Companies tend to give all launches the same support: a web page, a press release, and an email blast. A very formulaic approach. Not that those things are wrong. Often, those activities are the baseline that is needed to get a new product to market.
  • Related to the one-size-fits-all approach are resources available. Data is hard to come by, but a typical launch will get tenths of a percent of an available budget. (In electrical products that number, for manufacturers, is probably .5% of sales for all marketing costs.)
    Some launches are not particularly important. They may be cost reductions masquerading as news. Often they are driven by cost increases that mean more to the manufacturer than to you.
  • Companies rely too much on the sales channel to carry the burden. As channel partners you know this too well. The manufacturer’s rep shows up with a catalog and a message concerning new products this quarter. You know something is new but do you know why this product is being brought to market? What position it fills? And are any tools provide, that are customizable, that you can use to market the product to your customers? (or is it “let’s have a lunch ‘n learn, give the flyer to the salespeople and figure out whom we can call on?”)
  • Related to this is a failure to communicate what need a product fills. A cost reduction might be important if the pricing makes the product more competitive. A line extension might enable you to penetrate more markets.
  • For channel partners(distributors and reps), it’s incumbent to answer what need this product satisfies, its intended outcome and why is it different than its competitors. In other words, why are you launching this product? Product launches should fit into one of the following categories.
  • Line extension or gap filler. These should be included in the latest email blast, sales collateral and communicated clearly to the channel, i.e. “This product will enable us to gain more business in areas where our line was incomplete…” Cost reductions might fit here, although if the cost reduction changes the product platform it falls into the next category.
  • Platform change. Launches that fall under this heading are next-gen products designed to replace an aging product, or to add features that the market desires. Occasionally, a platform change is a big deal and should be communicated as such. Be sure to ask – what role does this product play in the market? Why the change, what will we be able to do?
  • Game changer. Products that fit this definition are few and far between and should be given the appropriate amount of fanfare. Examples in this category include solid state hard drives and embedded IP chips. Typically, game changers will get a lot of media attention. It is still appropriate to ask how this product changes the game.

There is little we can do about a manufacturer’s attentiveness to launch activities. As channel partners, the opportunity to understand why the product is being brought to market and what need it fills rest with you. Manufacturers with a solid understanding of product launch process will have answers for those questions, which will help you know where to assign resources. And those are the ones whose launches will be successful and will drive business for a distributor.

Recognizing that there are many suppliers who feel that they do a good job and a wide array of distributor perspectives on this, I asked Al which manufacturer / product, did he think does / did a good job with a launch.  His answer:

In recent history I would cite Hubbell Wiring as doing a good job of outbound (email campaigns) and good inbound (web pages align with the outbound). They have a robust distributor/dealer library (called Distributor Corner) of images and other digital assets. The Hubbell reps seem well equipped, knowledgeable.

As far as a specific product, I don\’t have manufacturer data but from my perspective, their recent launch of the USB Charging Receptacles was well done. http://www.hubbell-wiring.com/productinformation/LandingPage/landing.aspx?Page=WiringCommercial

Note the use of a landing page with all the associated sales tools, install instructions and images.

Hubbell also has a strong eCatalog and they have technically adept field personnel who can conduct \’safety inspections\’ in plants that may be at risk of code misses or, unsafe working conditions.

If you have questions for Al, click here to email him.
We\’d like to thank Al for his insights.

 It then begs some questions:

  • Whom do you, as a distributor, think consistently does a good job with product launches (and why?)
  • Manufacturers, who supports your product launches well with defined plans?
  • What is needed to make a product launch effective?
  • Given that this has been a historical challenge, what are best practices that you\’d like to see or a \”process\” for your organization?, and
  • Should it be defined as a new product launch if there is not enough marketing support and strategy to effectively introduce the product / generate demand? Could this be an indicator of the manufacturer\’s commitment to the importance of the launch?

Rather than awards for best products, perhaps there should be awards for best product launches … and let them be voted on by distributors. (and then manufacturers could have award programs for best product launch support!)

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1 thought on “Why Product Launches Fail”

  1. Great article and food for thought. In today’s competitive environment, new products are even more critical to distributors and manufacturers as a means to stay relevant and grow their business. Thanks for sharing, David!

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