put product development ahead of advertising
For many years the words ‘marketing’ and ‘advertising’ have been seen as virtually interchangeable. This reflects a very narrow view of marketing and highlights the aggressive salesmanship of advertising agencies. This is the first of five thoughts addressing the tools other than advertising, or communication, that marketers can and should prioritise.
One study in the United States found that 85% of new products fail. Another study found that 95% of new products fail.
These numbers highlight just how difficult it is to identify the products that people want to buy. It also suggests that a great deal of money is lost launching and advertising a new product. If the product fails, there is a reasonable chance that the expenditure on communication is wasted.
Another study in the United States found that 63% of customers are interested in new product launches, while yet another found that 83% of consumers are prepared to pay a premium for an innovative product that better addresses their requirements.
These findings suggest that new product development is important and has the potential to drive sales.
This observation is further supported by the following findings:
- 43% of executives view innovation as a competitive necessity
- 93 percent of executives believe that organic growth through innovation will drive the greater proportion of their revenue growth
All of these statistics serve to highlight the importance of product development and getting it right. If the consumer is the starting point of any great strategy (which it is) then the product is the second step. Get the product right and sales will be maximised while the cost of communication will be minimised. It costs more to drive sales of a less than optimal product – while an optimal product (one reflecting the needs, wants and aspirations of the customer) will almost sell itself.
Get the product right first. Then continue to monitor market expectations and the alternatives using the data to develop and evolve the product. Zara, the fifth largest fashion chain in the world has no advertising budget. Its success is driven by a culture of staying close to the market and exceeding the expectations of that market, especially in terms of the product on offer.
In 2018, put product development ahead of advertising
Every year – put the facts ahead of intuition and guesswork.
Sources of core statistics – Vision Critical, Kissmetrics, Blog, Smithers Pira, Brain Tracy, ClosedWon and HubSpot