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New-Product Introduction

In: Decision Making in Marketing and Finance

Author

Listed:
  • Paul Sergius Koku

Abstract

Why should a firm introduce a new product/service, particularly in view of the abysmal failure rate of new products in the market? Regarding the grim picture of failure rates, consider the following: some reports state that the failure rate of new products is between 80% and 90% (Crawford, 1987). However, different studies, depending on the methodology and analytical technique used, report rates between 24% and 98%. According to a report by Cooper and Edgett (2010), top-performing organizations experience a higher commercial success rate for their new products. The average success rate for this group is approximately 62% compared to bottom performers’ average success rate of 45%. Now, what do you think could account for this disparity in success rates? Of course, there could be numerous factors. The authors of the study offer two: (1) top performers have well-structured and applied innovation processes, and (2) they also have better gatekeeping and governance protocols. We can add a few more for this disparity in success rates, such as possibly flawed processes for market research of the need for the products/services, a rush to beat top performers, and/or be the first in the market.

Suggested Citation

  • Paul Sergius Koku, 2014. "New-Product Introduction," Palgrave Macmillan Books, in: Decision Making in Marketing and Finance, chapter 0, pages 69-81, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-137-44477-6_5
    DOI: 10.1057/9781137444776_5
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