Think the cost of strategic marketing is too high? Consider the alternative. Where the competition is cutthroat--as it is on supermarket shelves--getting your product right the first time is the cheapest way to go.
This was the conclusion of a study by David B. Linton at Linton, Matysiak & Wilkes, a Blacklick, Ohio, marketing and product development consulting firm. Linton compared the success rates of new products introduced by the top 20 new product manufacturers against the track records of everyone else.
The results? The national success rate for new products hovers between 20 percent and 25 percent, but a year after their introductions, at least 76 percent of the products introduced by the top 20 companies were still on supermarket shelves.
What sets winners and losers apart? For starters, the top 20 companies invest in strategic marketing. By doing so, these companies lower the cost of new product launches by reducing their number of failures. Granted, these companies are mostly big businesses with equally big marketing departments, but entrepreneurs can certainly learn a lesson from them.
"For small to medium-sized manufacturers, an estimate for a new product introduction would be $50,000 minimum,' says Linton. "[But] what is the true cost if the mortality rate is [close to] 90 percent?' In this scenario, nine out of every 10 launches is a dud. So the average cost of introducing one viable product could equal nine times $50,000, or $450,000.
No amount of analysis can turn a loser into a winner, but strategic marketing may help make the potential gems shine.