How To Reduce New Product Launch Failure

The following final thesis defines the effective process of launching a new product. This project report exhibits the overall processes of launching a new product and also reports the points to reduce new product launch failure.

Since 80 – 95 % of all new products fail1, depending on the definition of failure, we find it interesting to investigate how to minimize the risk of failure. Extensive research has been carried out, both on a corporate and an academic level, in purpose of reducing new-product failure rates.

Despite this fact the failure rates of new products in general have not decreased. However, companies such as Procter & Gamble, IBM, and Hewlett Packard have improved their new-product failure rates through disciplined marketing processes, and succeeded over and over again. The common element among these companies is according to Berggren that they have a formal “stage-gate” process for new product development.

Product life cycle is a very informative and important tool to figure out the level of success of new product in the market.

Figure 1 shows a typical product life cycle

3. Methodology

This chapter aim to describe our methodological choices during the writing process of our thesis. In the end of this chapter we will discuss validity, reliability, and the ability to generalize our conclusions. The work has been developed through the following process.

Abstract

Title: Processes and Activities to Reduce New Product Failure

Authors: Marcus Behrens, Jakob Waldemarsson

Tutor: Wayne Strong

Problem: New product development is an imperative for a company’s survival. Depending on the definition of failure 80-95 % of all new products fail. Extensive research has been carried out in purpose of reducing new product failure rates, but in general the failure rates have not decreased.
This thesis is focusing on the new product development process, and which activities companies should undertake to reduce their new product failure rates.

Purpose: We intend to compare product development methods and theories with the practice at companies, and investigate whether formal product development processes and failure rates are connected.

Methodology: We have chosen to carry out case studies at Findus and C Technologies. The empirical data was gathered through interviews with key staff.

Conclusions: From our empirical data we cannot find a direct connection between usage of formal new product development processes and reduced failure rates. However we believe that without a formal new product development process the failure rates would be even higher.
Our empirical data gives support for the conclusion that the market should direct product development. We have caught a glimpse of some problems not related to the new product development process itself. These problems include competition and personal commitment.

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